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How to Negotiate Salary: 10 Salary Negotiation Tips

The Scotwork Team
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Salary negotiation is one of the most important and difficult conversations you are going to have in your career. Here, we will explore what makes salary negotiations so challenging – or even intimidating – and then equip you with ten tips on how to negotiate salary.

What is salary negotiation, and why is it important?

Salary negotiation is a process where an individual and an employer (or potential employer) discuss and come to an agreement on the amount of compensation the individual will receive for their work. This compensation can include not only the base salary but also benefits, bonuses, stock options, and other forms of remuneration.

Salary negotiations can occur at multiple points throughout your career, e.g. when a job offer is made, when a job promotion is given, or during performance reviews. It involves presenting a case for a desired salary level based on your professional qualifications, experience, the value you bring to the company, and market rates for similar positions. Effective salary negotiation requires research, preparation, and a clear understanding of both your worth and the employer's compensation policies.

As we mentioned earlier, it is one of the most important and difficult conversations you are bound to encounter in your career; here's why.

Firstly, it directly impacts your financial well-being. The outcome of a salary negotiation can significantly affect your income, which influences your ability to meet personal and family needs, save for the future, and maintain a desired lifestyle, to name a few.

Salary negotiations are not just about the immediate financial gains. They also set a baseline for future salary increments, promotions, and even negotiations with future employers. The initial offer agreed upon can have a compounding effect over the course of your career, influencing your earning potential in the long run.

As you negotiate salary, it requires a delicate balance between assertiveness and diplomacy. You must advocate for yourself and communicate your value without coming across as unreasonable or entitled. This requires a deep understanding of your worth in the job market, the ability to articulate your contributions and potential impact, and the negotiation skills to navigate the conversation effectively.

What's more, the negotiation process is also fraught with emotional and psychological challenges. Fear of rejection, the desire to be liked, and the discomfort of discussing money openly can hinder anyone's ability to negotiate effectively.

It is not getting easier, as the process tends to involve navigating organisational norms, understanding market rates, and sometimes dealing with opaque corporate pay policies. The lack of transparency about salaries within industries and organisations can make it difficult to benchmark expectations or know what is fair and achievable.

Finally, cultural and gender norms can also influence how individuals approach salary negotiations, with some groups facing societal expectations that discourage assertive negotiation, potentially leading to disparities in pay. In fact, research* shows men are more likely than women to say they were satisfied with the pay they were initially offered (42% vs. 36%), while women are more likely than men to say they didn't feel comfortable asking for higher pay (42% vs. 33%).

10 salary negotiation tips

1. Think timing

It is hard for your boss to increase your compensation, particularly if you spring your demand on them. Plan your campaign well in advance of making the pitch and plan for other benefits you can ask for to bring to the discussion.

The timing of your request can also significantly impact its success. If your company has just announced record profits, it might be an opportune time to discuss your salary. On the other hand, if the company is undergoing layoffs or budget cuts, it might not be the best time.

You may also plan your approach around the company's fiscal calendar, aiming for a period just before budget planning for the next fiscal year can be strategic. Plus, consider your personal achievements and milestones within the company as part of your timing strategy. If you have just completed a major project successfully, it can be a good time to highlight your value to the company.

2. Aim high, but be realistic

Many researchers have found a strong correlation between people's aspirations and the results they achieve in negotiation. At the same time, you want to suggest ideas to which your boss can realistically say yes.

Research what professionals with your experience and in your position typically earn in your industry and geographic area. Websites like Glassdoor, PayScale, and LinkedIn Salary can provide valuable benchmarks.

However, remember that demanding an excessively high salary without the experience or achievements to back it up can come off as naive or arrogant. Setting your sights high sets the stage for negotiation, but your expectations need to be anchored in reality.

3. Start off with the right tone

You want to let your boss or manager know you will listen and try to understand their views. At the same time, you expect them to do the same for you so you can work together to address this issue.

Approach the conversation with a collaborative mindset, expressing your appreciation for your current role and your desire to contribute even more effectively. Emphasise that your request is about finding a mutually beneficial solution rather than making demands. This approach encourages a constructive dialogue and increases the likelihood of a positive outcome.

If you are not ready to walk away, it is wise to avoid ultimatums, threats, and other coercive behaviour.

4. Clarify your interests

Your compensation should satisfy a range of needs, not just salary. Make sure you have thought about other points of value to you as well, such as profit sharing, stock options, a sign-on or signing bonus if you are a new employer, a quicker promotion schedule, increased vacation or flexible hours.

Think about the whole compensation package. Perhaps you would value the opportunity to work from anywhere a few weeks per year, or you might appreciate additional support for professional development through courses or conferences. By considering what is most important to you beyond just the salary, you open the door to a broader and potentially more fruitful negotiation.

5. Anticipate your boss's interests

Just like you, your boss has needs and concerns. To have a chance of them saying yes, your ideas will have to address those things that are important to them.

For example, if your boss is focused on reducing turnover, you can highlight how an increased, higher salary will enhance your long-term commitment to the company. Or, if your team is under pressure to complete projects, you might negotiate for resources that would help improve your productivity.

6. Create several options

Brainstorming is the most effective way to find ideas that satisfy everyone's interests. It works best when you separate it from commitment – first, create possible solutions, and then decide among them.

When you approach the negotiation table with multiple options, you increase the chances of finding a solution that satisfies both parties. As an example, if a direct salary increase is not feasible, perhaps a performance-based bonus or additional stock options could be.

7. Generate objective criteria

It is far easier to convince someone to agree with your proposal if they see how that proposal is firmly grounded on objective criteria, such as what similar firms pay people of similar experience or what others in the company make.

For example, if you present data showing that the average salary for your position in the industry is higher than what you are currently earning, it grounds your request in fact rather than personal opinion. This approach can help move the conversation from subjective judgments about your value to a more objective discussion about fair compensation.

8. Think through your alternatives

If you cannot persuade your boss to say yes, you need to have a backup plan. Part of preparation is creating a specific action plan, so you know what you'll do if you have to walk away from the table.

Knowing your BATNA, or Best Alternative To a Negotiated Agreement, gives you a clearer sense of what you are willing to accept and when it might be time to walk away. If you are prepared to start looking for another job if your negotiation does not pan out, that knowledge can inform how you approach the discussion. However, it is crucial to keep this as a private contingency plan rather than a threat during negotiations.

9. Prepare thoughtfully to achieve your goals

Effective negotiation requires thorough preparation, and this is the only aspect of your negotiations you can completely control.

This means not just knowing your worth and having clear goals but also anticipating potential counterarguments and questions. Practising your pitch, perhaps with a mentor or friend, can help refine your arguments and boost your confidence.

10. Review and learn

The only way you can really improve your ability to negotiate is to explicitly learn from your experiences. After you finish negotiations, reflect on what you did that worked well and what you might want to do differently next time.

What not to do when negotiating salary

As we have covered how to negotiate salary above, it is equally important to look at how not to do so as well. Here are some Don'ts to keep in mind.

  • Don't start with your lowest acceptable salary: If you start negotiations with your bottom line, you have no room to manoeuvre. Many employers will often try to negotiate down, so start higher to give yourself some wiggle room.

  • Don't be the first to mention a number: If possible, let the employer make the first offer. This can give you a better starting point for negotiations. If pressed, you can try redirecting by asking about the budgeted salary range for the position.

  • Don't make ultimatums unless you are ready to walk away: Making a "take it or leave it" demand can backfire unless you are truly prepared to walk away from the opportunity. Instead, express your enthusiasm for the role while being clear about your value.

  • Don't rush the process: Negotiations might take time, especially if multiple rounds are involved. Plus, those with whom you are in negotiation conversation might not be able to give an immediate answer. Rushing to accept an offer might lead you to settle for less than you could have obtained with a bit more patience.

  • Don't forget to get it in writing: Once you have reached an agreement, make sure the terms are documented in an offer letter or contract. This ensures there is no confusion about what was agreed upon.

We hope this helps give you a clearer picture on how to negotiate salary! Our negotiation experts can transform the way you negotiate. Whatever your negotiation needs, we can help. Get in touch

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