According to Business Insider, avoiding salary negotiation throughout your career means losing out on roughly one million dollars over the course of your life.
That’s an incredible amount of money to leave on the table.
So how does one negotiate from a position of strength? Well, strength comes from confidence. Confidence comes from being prepared (doing your homework), having the right timing, and knowing what you want out of the negotiation. Let’s explore.
PREPARATION –Understand Your Value
You can increase your chances of getting a raise by coming to the discussion with a concrete percentage increase in mind, one based on facts, not feelings. There are two key areas in which you need to research and relay value.
First, your position value in the marketplace. That is, the going rate for your role in your geographic region. Estimate your market value based on your skills and experience in your industry, says Josh Doody, author of “Fearless Salary Negotiation.”Use sites such as Glassdoor and PayScale to get a general sense of your market value. Then, tailor those numbers to your specific job market (local competition, cost of living, etc.).
Second, assess your own individual value in terms of what you add to the company bottom line. Document how you’ve added value to the company, citing prior performance reviews and referencing key accomplishments in the last year (ex. meeting tight deadlines, managing more projects, increasing sales.
TIMING –Identify the Right Time
Timing is important, as is the mood of your (future) manager.
In negotiating an initial salary for a job, you (the job seeker) do not want to be the one to bring it up in an interview. Let the hiring manager be the first to discuss salary. Don’t bring up money until the interviewer brings up money if you can help it. If you name a number first, you could be offering a figure below the range the company is prepared to offer—losing money in the process. You could also take yourself out of contention if what you’re asking for is higher than what the company can offer.
When seeking a raise, there are certain times of the year when it’s best to request a salary review. This may vary by company, but—in general—it’s a good idea to time your request to coincide with when annual budgets are developed and/or just before when annual performance reviews are conducted. Don’t wait for your review to approach the issue of a raise; often it will have been decided by the time the performance evaluation is conducted. Prepare your raise request 4-6 weeks before the appraisal period.
EXECUTION –Establish Clear Objectives
Here’s the part some of us struggle most with: You now have to ASK. For the pitch, you may want to practice with a friend or coach first, to make sure you know your key talking points. When ready, ask for a one-on-one meeting with your manager.
Ideally, your raise is granted. If not, request that specific goals and a timeline be set for earning the raise you requested. After your meeting, follow-up with an email that summarizes your case, providing your boss with something to circulate with other managers for consideration.
Remember, negotiations don’t always have to be about money. We tend to focus on asking for a higher salary or a bonus and may miss asking for other perks (ex. telecommuting, vacation time, etc) that can be helpful in our career and life. These asks have tangible benefits to you and sometimes to your company. And, as a bonus, it can be easier for managers to give them than money.
A study by Payscale found that three-quarters of people who asked for a raise saw their paychecks go up: 44% received the amount they asked for; 31% got less than what they asked for, but still received a bump in salary. Assess your value and determine the best time for you to step forward with confidence and courage. Your paycheck will thank you for it.