Negotiating your salary is one of the most powerful financial skills you can have in your arsenal.
If you manage to negotiate a few thousand dollars at a job, that will pay off for the rest of your working lifetime.
Because all of your raises are essentially based on your base income, making sure that starting base income is as high as possible is the key to earning the most money that you can.
Here is a step by step of what you need to know, say, and do in order to successfully negotiate your salary.
1. Know the business, the industry, and what others are getting paid
It’s super uncomfortable to talk about money and people don’t share their salaries enough, but definitely connect with coworkers or friends and ask what they make.
If they don’t feel comfortable giving you an exact number, see if they’ll give you a range.
Another way you can figure out the average salaries at a company is to check a website like Glassdoor or PayScale, and these will give you a range or the actual amount that they pay someone with your education, level of experience, and the position you’re in.
It’s really important to know what people are being paid before you try to negotiate your salary because if you ask too much money they’re not going to give it to you and if you ask too low they might take that and you’ll miss out on tens of thousands of dollars that you could be earning.
2. Be able to show your work.
This is so important. You can’t negotiate a higher wage if you don’t have proof of why you deserve it.
In my past jobs, one of the things I did was I always carried around a black notebook with me and in it, I wrote down daily what I worked on that day, major projects I had, as well as huge successes.
This was so important because it made it really easy for me to refer back to when it came to negotiating my salary at my 6 months or my 1-year reviews.
This is also a great place to take notes of people that you’ve worked with that you can ask for a referral form.
If you’ve had a major success with a client, write down their name and email and circle or highlight it so you can go back and ask them for a positive, glowing review when you go to a next job.
If you haven’t had a job in your career yet what you want to use is your accomplishments in school.
Or if you were part of any extracurricular activities, in any student clubs or groups, or if you received any awards or scholarships for academic standing these are the things that are going to make you stand out compared to other candidates and will justify a higher wage.
When it comes to the actual job interview or your job review, you want to have a list of your accomplishments so when you say I want more money you can say here’s why.
3. Know when to ask.
In my opinion, there’s essentially no real bad time to ask for a raise but there are sometimes that are better than others. The best time to negotiate a higher salary is when you’re first hired for a job.
That is the easiest because they have nothing to go on and you’re starting from scratch.
The second best time to negotiate a salary increase is at any kind of review, so your 6 months or your 1 year or if you’re changing positions within a company.
Another good time to ask for a salary increase is 2 to 4 weeks after you’ve completed a major project that has been hugely successful.
Once you’ve demonstrated how valuable you are to a company, that’s when you can approach your supervisor and say, “hey I would love to discuss increasing my wage because I was so successful at this.”
It’s not great to have the salary negotiation conversation when your company is doing layoffs or facing financial hardship, though I have seen people pull it off during those times just proceed with caution.
4. Remember the rule that “he who speaks first, loses.”
What this refers to is the first person to throw out the number is the that’s not going to get the best deal.
So what you want to do is make sure that your employer or potential employer gives you a figure before you do.
This is really difficult to do and this is easily the most uncomfortable part of a job interview or a review.
When they ask you what are your salary expectations, they’re trying to get a number from you and you have to try to stall and avoid it.
When someone asks you what are your salary expectations, you want to respond with based on my experience and education, I know your company will provide a competitive offer.
I will feel more comfortable discussing compensation once a formal offer is put forward. They’re probably going to dodge the question and ask you again so you have to play it off once more.
If they ask again to make it uncomfortable for everyone and just say I’m not comfortable discussing a number until a formal offer is put forward. Are you making a formal offer?
More likely than not they’ll give you a figure or range or present a formal offer in a few days.
If they’re really needling you and you feel backed into a corner, go ahead and give them a range, just make sure it’s about 10 to 15 % higher than you actually expect to be paid for the position.
Again, this is why step 1 is so important. You have to know what people are currently being paid in that role in your industry.
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5. Listen to their offer and provide immediate but undetailed feedback.
No matter what figure they throw out, say thank you, and express gratitude.
Tell them it’s a good offer if it’s a bad offer. Tell them it’s a generous offer if it is a generous offer.
You don’t want to act overly emotional whether positively or negatively even if the number isn’t what you expected.
If it’s really low, you can be honest and say I expected it to be more because of the amount of work travel or the workload associated with this position.
This gives them time to either justify why they’re giving you such a low number or to come back with a higher offer for you.
6. Tell them you want 24 to 48 hours to think about it.
Now, this is so hard for people to do because they’re really afraid that the employer is going to rescind the job offer. They won’t. Finding someone to hire is really time-consuming and expensive for a company.
If they’ve decided on you as a candidate, they want you and you’re now holding the cards and it is not unreasonable to take a day or two to think about the offer before you decide.
This 24 to 48-hour window gives you time to think about what you like and what you want more of from their job offer and it also gives them time to sweat a little and think that you might not take it.
This will make them more receptive to the negotiations that you make when you come back.
Furthermore, if you’re entertaining a lot of different jobs in your job hunt, this will give you time to get multiple offers from different companies and decide on all of them instead of feeling rushed into a decision.
7. Ask for 10 to 15 % more than they offered, as well as additional perks.
Now you might feel a little greedy doing this but this is the whole point of salary negotiation and you have to remember that your employer or potential employer expects you to negotiate their offer.
They expect you to come back asking for more, so come back asking for more.
So go ahead and ask for 10 % more or 15 % more in pay.
I’ve seen people negotiate as much as 20 or 30 % more but that can come off a little wrong so be very very sure that they are really low-balled you before you attempt that tactic.
In addition to asking for more pay, you also want to ask for additional benefits particularly if they say we can’t afford to pay you more right now.
Not only will this give you some added benefits, it also gives them something else to offer you if they can’t afford to meet your salary demands.
This is where you should ask for anything and everything that you would like this job.
This can be anything from more vacation days, retirement matching, extra health benefits, even an office with a window.
8. One of the most important things you can ask for is to review your salary in 3 to 6 months.
This is important because it will give you a chance to have this conversation again and they’re going to know you’ll be asking for more money on your salary.
After 3 or 6 months, you’ll have had the chance to demonstrate how well you’re doing in the job and that will make them more receptive to paying you more at that time especially if they’re going into the conversation knowing you’re going to be asking for it.
You want to negotiate your salary at and every opportunity that comes along.
I know that it’s an uncomfortable conversation but it’s totally worth being uncomfortable for 20 or 30 minutes if it’s going to give you thousands of dollars in extra pay every year, which will add up to tens of thousands of dollars, even hundreds of thousands of dollars, over your working lifetime.