I remember what it felt like to receive my first job offer just out of college. The starting salary they offered made me feel like a millionaire. It took me a year or two to realize there was a rather large gap between $29,000 and a million dollars, and if I wanted more, I was going to have to work for it…and ask for it. Being in the marketing and advertising industry, it didn't take too long before I realized that negotiating a higher salary simply means learning how to market myself to advantage.
This doesn't mean I mastered the skill so quickly, however. Whole books are written and courses taught on negotiating a higher salary. When you are downsized (this has happened to me, too) it is one of the first things you learn when you access your job placement services. Ultimately, no matter how much you know about negotiating your salary, there is always something new and useful to learn!
The cost of not negotiating
According to Salary.com, the cost of failing to ask for more money can add up over the course of your career, costing you $1 million or more. CareerBuilder.com surveys indicate approximately 40% of American employees do not even try to negotiate the salary they are offered (at first jobs and subsequent jobs). So long as you are courteous, professional, factual and friendly, statistics indicate the worst outcome of asking for a higher salary is simply hearing "no." The best case is…you guessed it—earning more money for doing the same job!
The payoff of asking for more money
A study published by the Journal of Organizational Behavior indicates that choosing to negotiate a salary offer results in an additional $5,000 of income–across industries. What would you do if you were earning $5,000 more than you earn right now?
Each of these tips is, of course, subject to your own best judgment. You know your workplace culture, your boss's personality and your own value better than anyone else, so pick and choose from these tips to find the ones that will serve you best.
1. Think outside the wallet
Sometimes, there’s "wiggle room" in the financial budget to increase your salary. Sometimes, there just isn't…at least not right at that moment. But negotiating for more money can incorporate more than just straight dollars and cents.
Here are some other "soft earnings" negotiating points:
- Increased number of vacation days
- A better benefits package (company car, paid cell phone, expense account, etc.)
- The option to telecommute one or more days per week (saves you time, gas, tolls, etc.)
- A new title
- New responsibilities (You may not want these, but then again, maybe they will make you shine and strengthen your negotiating power!)
- Use of an administrative support person (or better yet, your own assistant!)
- Flexible work hours or every other Friday off
- Your turn to brainstorm—what do you want?
2. Make your first ask a virtual one
Experts recommend saving an in-person meeting for fine-tuning the details of your "ask" (this is what many experts call asking for a higher salary). Start out in a medium where the playing field feels more even and less potentially confrontational—such as via email.
3. Set yourself up for success in person
Experts offer a number of recommendations for the most successful outcome of in-person salary negotiation meetings. Some recommendations you might expect—some you may not.
In-person success tactics:
- Drink some caffeine just prior to your meeting: Oddly, according to a study by the European Journal of Social Psychology, caffeine can actually help strengthen your resolve by decreasing your vulnerability to persuasion (such as your boss’s attempts to convince you that your current salary is just fine).
- Be direct and make the initial offer: Yup—here, experts recommend you open the negotiation and ask for the salary you want. You appear strong and confident, and your boss is responding to your lead rather than the other way around.
- Sell yourself towards the future: Future potential is what you’re asking your boss to "buy" by increasing your salary now—so be clear about what your potential is and why you will earn every penny of what you are asking for.
- Be friendly and smile: Research makes it abundantly clear that friendly, smiling people who laugh easily get what they want more often. Be the person your boss wants to continue working with, and you likely will be!
4. Be as quantitative as possible with your "whys"
In the world of research, there are two basic types of studies: "qualitative" and "quantitative." The first deals with data that cannot be measured (basic observations, feelings, sensations, the "quality of" something). The second deals with data that can be measured (numbers, statistics, the "quantity of" something). In salary negotiations, you are aiming for more of the latter.
Here are some points to ponder:
- Have you saved the company money?: When, where, how much?
- Have you cut expenses in your division/department?: When, where, how much?
- Have you generated new income/business?: When, where, how much?
- How much more money are you asking for?: How will the company's investment pay for itself—with interest?
5. Ask for a very precise salary increase
Finally, experts at Columbia Business School caution graduates against opening salary negotiations with a lot of zeroes. Rather, ask for a precise number.
- Good: Rather than asking for $5,000 more (even if studies indicate that is likely what you’ll receive if all goes well), ask for $5,500 more.
- Better: Rather than asking for $5,500 more, ask for $5,550.
- Best: Rather than asking for $5,550 more, ask for $5,575.
Note: You could either frame your "ask" in the form of an increase, or state it as the sum of your current salary + increase. Here, using the "Best" scenario from our example, if your current salary is $50,000 and you are asking for $5,575 more, you would simply ask for a salary of "$55,575.”