This is the seventh post in a series of posts about the most common and damaging mistakes jobseekers make. Read the full series here.
7th deadly sin: not negotiating salary
You read our blog posts about the first six deadly sins of job searching and pulled off a top notch search. You reap your reward and have an offer for a great job on the table. They offer you what seems like a fair compensation package. Now don’t commit the 7th deadly sin of job searching and accept the package without negotiating!
Why you should always try to negotiate
Higher salaries compound over your lifetime. Let’s look at a theoretical example: If you start working at 21 and retire at 65 at a starting salary of $20,000 and you receive 5% yearly raises, this makes for lifetime earnings of $3 million. If you had negotiated 6% yearly increases instead, your lifetime earnings would be $4 million. In this example, negotiating translated into a $1 million difference (you can find this example and others in Jim Hopkinson’s very good book Salary Tutor).
Surveys of hiring managers show that 84% of employers expect applicants to negotiate!
Some ground rules
Timing – Salary negotiation is the last step of the interviewing process. It should only take place at the very end of the hiring process when you have been offered the job! If a potential employer or their HR representative asks you for salary requirements early on in the interviewing process, they only want to see if your requirements broadly fit with theirs. This is not the time for negotiation.
Preparation – Never ever go into a salary negotiation unprepared! Lots of variables go into the compensation equation, so do your research.
- First of all, you need to be aware of your own requirements. Establish: 1) the minimum you need and are willing to work for, 2) a realistic salary for the desired position, and 3) your “slam dunk” number.
- Your numbers have to be grounded in good information: Employer variables are: level and seniority of the position, size of company (large companies often pay better than small), industry (an investment bank will pay its administrative assistant more than a hospital or university), location (a job in Louisiana will pay less than the same job in California) Your variables are: education, length and relevance of experience, special certifications or skills.
- The following websites will help you in your research of realistic salary ranges: www.glassdoor.com, www.salary.com, www.payscale.com . As always, your best source of information is from a contact that already works for your desired employer.
Compensation is more than just salary
So, what if you scored your dream job offer, but the money is not what you would like it to be? You are negotiating, but the company is maxed out on salary and can’t go any higher than what it already offered you. In this case, it’s time to get creative. There are other benefits that can be negotiated. You could ask about any of the following if applicable: sign-on bonus, yearly bonus, performance and salary review after 6 months instead of 12, guaranteed minimum number of hours, health benefits, car allowance, tech allowance (phone, tablet, laptop), vacation days, tuition reimbursement, training, stock options, payment of professional association dues, paid conference participation and so on.
“My industry doesn’t negotiate compensation”
That’s unlikely. You can try to negotiate in any industry. We have seen clients successfully negotiate salary or other benefits with government employers and hourly retail positions, both not known for their flexibility or generosity. Of course, there is no guarantee for success, but you owe it to yourself to try.
Salary negotiation is difficult and uncomfortable for most people but there are a lot of resources that can help. Some of our favorites are:
- Stanford University professor Margaret Neale, her negotiating advice is great overall but especially for women who still face special hurdles in this arena. Look her up on Youtube.
- Jim Hopkinson’s book Salary Tutor is excellent, especially in explaining negotiation techniques.
- Last but not least, any book in the GetFive (formerly 5 o’clock club) series is good, including Kate Wendleton’s Mastering the Job Interview and Winning the Money Game.
- Of course you can always schedule an appointment at the Career Center and we will help you one-on-one with your salary negotiation strategy. Call us at 225-231-3733.
Written by Anne Nowak