You just got done with an interview and you nailed it. You ride out that high until the following day when someone from HR calls and asks the dreaded question, "What are your salary requirements?". And you pause...
You don't want to ask for too much, and you certainly don't want to ask for too little. So, how do you find the sweet spot to negotiate appropriately? Don't worry. In this article, we will cover five tips you can use to negotiate with confidence.
1. Advocate for yourself
Let's start by thinking about who has the negotiating power: the employer or the candidate? Well, in 90% of the cases, it's the employer, and they will not hesitate to yield this power.
Companies with a modern culture are typically more transparent in their negotiations (and focus more on pay equality).
On the flip side, it's your responsibility to advocate that you are the right candidate for the job. If you can strongly advocate for yourself, you take a little bit of the power away from the employer.
To advocate for yourself, think about what makes you special? What do you have to offer that other candidates do not have?
Here are some areas to think about for yourself:
Do you meet all of the role requirements (believe it or not, this rarely happens)?
Do you have a strong set of skills that aren't required for the role but would be desirable (strong leadership skills, speak a different language, etc.)?
Did you have good results at a previous company that you can talk about?
Are you coming from a top university of a well-respected company?
Do you have side projects that show your proficiency and passion?
Spend some time thinking about what makes you unique. You'll want to leverage any advantage you have over other qualified candidates.
2. Do your research
The reason negotiating can be so intimidating is that the burden typically falls to you to make the first move. There's the old cliche, "never make the first offer", but it's hard to avoid during this process. Regardless, the key is to be prepared.
Prepare yourself by doing your research and having a solid understanding of what your relative value is.
Employers typically have the power in negotiations, but doing your research will help empower you.
This first crucial step begins (ideally) before any actual interview takes place. Many people lack confidence in negotiating because they can't articulate their value effectively. By doing sufficient research, you can remove emotion and make it a matter of fact conversation.
The secret to negotiating is making it a fact-based conversation and not an emotional one.
Here are a few things to consider when doing your research
Cost of living in your area
Position and company (there might be several companies you apply for)
Years of experience
Level of role
I would suggest spending a few hours researching salary ranges (and other benefits) for the position that you're applying for in combination with those other factors. Here are a few websites to start with.
3. Talk to People You Trust
While doing your research, one additional source you may not have considered is the people around you. Do you have friends, family, or coworkers that you are comfortable enough to talk to? Here are a few ways they might be able to help.
Regardless of how much preparation you do, negotiating is tough. Don't let the phone call with the employer be the first time you talk out loud about negotiating. Just like any other skill, you need to practice. Find a friend that can practice the conversation with you beforehand.
You can rehearse negotiations just like you would for an interview, speech, etc.
Good and trusted friends are ones that can give positive AND constructive feedback. Share the research you've done, and see how they respond. With the right person, they will be honest about whether or not they agree with your findings. As with anything else, it never hurts to get different opinions.
In special cases, you might even ask close and trusted friends about their compensation. This can be a very sensitive subject, so make sure it's the right person.
One of the things I appreciated most about one of my mentors was his openness in sharing his compensation package (we'll talk more about this in the next section). This helped me have a better understanding of what to expect for myself based on my relative experience.
Ask What Others Think
If you have an offer in hand, talk to your trusted network about it and see what they think. Would they ask for more money? Would they ask for other aspects of compensation (again, more below)? How would they approach this situation?
4. Consider Negotiables Other Than Salary
Salary is what we typically look at first when considering an offer, but don't forget there are other items to factor in when looking at overall compensation. Here are a few:
Benefits (healthcare, 401k match, etc.)
There is much more to consider with overall compensation than just salary.
Let's consider two different hypothetical scenarios:
Young, Single, and Renting
People in this situation might be more open to a 'high risk, high reward' compensation package. Maybe this means less guaranteed salary, but a higher potential bonus percentage or more stock options or grants.
Married with Kids and a Mortgage
If you have a mortgage, spouse, kids or other similar responsibilities, you're probably less likely to gamble on higher bonuses and stock. Don't get me wrong, those things still factor in, but the guaranteed salary might become the most important piece.
Additionally, time off is probably extremely important. You want to make sure you have plenty of opportunities to see your kid's recitals or sporting events and take those family vacations.
Figure out which aspects of compensation you value most.
All in all, don't let these two specific hypothetical scenarios define how you respond. This is a very personal decision, so spend time figuring out which are the most important based on your situation. Know that you have the power to negotiate any combination of these items.
5. Prepare Yourself for Different Types of Offers
With all of the research you've done and the conversations you've had with friends and family, now it's time to put it all together. Again, the goal is to take emotion out of the equation. You've decided on your salary requirements, you've considered what the most important factors are in overall compensation, and you've talked to your friends and family for advice.
You should have a general idea of how you would respond to different types of offers. Here are a few scripted answers that you might find useful:
If the offer is too low, you can share your research to say that, on average, others in similar positions are making more.
Based on the research I've done, the average salary for this position is $X. Because of that, I would like to ask for $Y.
If the offer is on par with average, use your research and specific skill set to advocate that you are worth more than the average person.
This number seems to be on par with the average salary I found in my research. However, with my years of experience and my specific skill set, I would like to ask for $Y. I can bring X, Y, and Z skills to your company that others cannot.
If the offer is high, well... go celebrate! But take some time to consider it before giving an official response.
Don't ever say "Yes" on the spot. Always take a day or two at least to consider it. Don't make a hasty decision.
Here's how I would respond to this:
"Thank you for the offer. I'm incredibly excited about this. Would you mind if I take a couple of days to think it over?"
You might be tempted to negotiate regardless of the offer being higher than expected. Personally, I don't feel the need to do so. If an employer exceeds my expectations, then I think they have treated me fairly and I will do the same in return. Again, this is just my personal take, but keep in mind, sometimes you simply don't need to negotiate.
6. Bonus - Take Notes
As you execute the five tips we've discussed, take notes! Don't expect to be able to regurgitate your strengths or salary requirements on the spot. It's easy to get flustered during a conversation, so write down everything you want to communicate.
Negotiating can certainly be a tough thing to do, especially for those of us that feel uncomfortable in doing so. Just know that it is your responsibility to advocate for yourself because most companies won't do it for you.
Remember: Do your research, practice, and come prepared!