Imagine you got through your dream interview and the offer letter has been extended to you. However, the salary offered is way below your expectations. What would you do? Let go of the job or accept what has been offered? There is a third alternative also which most forgets. Negotiate for better compensation. Here is how you can do it.
Do you know how disastrous not negotiating your first salary could be? A study conducted by George Mason University and Temple University researchers, and published in the Journal of Organizational Behavior has found that new hires who negotiated their starting salaries gained $5,000 on average, which was worth over $600,000 throughout a 40-year career.
Amazingly, a CareerBuilder survey found that a whopping 49% of employees do not negotiate salary before taking on a new job.
Are you missing out on a negotiation too?
For those who don’t negotiate, this means a colossal loss of hundreds of thousands of dollars in their income. Even if you are not much of a “facts and figures” person, remind yourself that the purpose of any interview is to sell your skills and knowledge.
If you don’t think you are worth the price that you have quoted, chances are slim that the employer will believe it either.
A recruiter will typically give you some time after extending the offer letter to think about it. This salary negotiation window is to be utilized to its full effect by the employee.
Tips for salary negotiation before accepting a new job offer
Do not speak too soon
Only discuss compensation in any detail after the employer has made you an offer. In cases where the employer asks you about your expectations before he has made an offer try delaying as long as you can.
The usual disadvantages of talking too soon about salary are that either the employer screens you out, or you get shortlisted but lowballed. In the initial stages of the interview, you still do not what the job is worth, and therefore, chances are that you might agree to a smaller salary than the job is worth.
Wait until you feel the employer is serious about you, and that happens only when they have made you an offer. You will require a tactful statement to postpone the answer without turning off the interviewer.
What if you have made a salary disclosure?
If you have already told the interviewer how much you make doesn’t mean you can’t negotiate for a fair deal. However, it does make your task a bit difficult. Now you should do your research well. Conduct some market research about the fair market value for someone with your skills and experience and present those facts to substantiate your salary expectations.
However, as explained in the first point, there is no need to address the salary again until there’s an offer. Do not be happy with just a raise over your previous salary. Let the employer know that you are looking for a salary that is motivating, fair-value based salary that can leave both the employee and the employer both satisfied.
Let the employer make the first offer
The simplest and quickest way to shortlist candidates when faced with many applications is to use their salary expectations or previous salaries as a parameter. This is the primary reason why the employer will want you to “go first” in the discussion about salary, asking you to reveal the expectations and salary history.
By going first you run the risk of scaring the employer off as, either it might be too high, or too low. Instead, wait until you know that the employer is serious about hiring you and then you can proceed to negotiate from that place of security.
Do not agree to the first offer made to you
The employer has made you the offer and he expects a reply from you. So what should be the ideal reply? According to experts, saying “OK” to the first offer made to you can throw away the potential chance to earn thousands of dollars.
You might cite your inexperience in dealing with salary negotiations or just blame your anxious heart for the same. Either way, saying OK is leaving a lot of money on the table. Instead of saying OK all you need to do is replace it with a more powerful four-letter word, Hmmm.
Known as The Flinch, the move works wonders in salary negotiations, flea market sales, and everything business. This gives you enough time to ponder it and the other person to improve his offer.
Know your worth
When you decide to be paid at a fair market value you should know what your market value is. You can easily find out the job’s salary range by finding typical job salaries for people having the same experience and skills in your industry.
You can utilize the internet to its full potential to give you data about the prevalent competitive rate.
Sites like Payscale.com, Salary.com, or Glassdoor.com can help shape the opinion. Your fair-market price is not a single number but a range and with an hour of research on this site, you can easily get through to it.
For instance, if finance is what your job is all about, then it’s expected that you know what kind of income finance managers are attracting. Once you know the ballpark figure, look for a posting offering similar pay. You also can negotiate before accepting the offer.
Negotiate for more perks and benefits
Many salary packages can be substantially increased by the inclusion of benefits and perks such as medical and dental coverage, wellness days, paid vacations, certification reimbursements, gym or health club membership, and others.
Some companies can agree to provide extra value through stock options, stock grants, and profit-sharing methods. Then various relocation benefits can alone supercharge your final offer.
Don’t play it cool all the time
Some people will advise you to play it cool in a job search or not appear too eager. Who would want to look “desperate”? This could be one of the most popular misconceptions that appear quite logical as well. However, in job search, people hire enthusiasm over cool.
The fact that the employer knows that you are eager to fill in the position can also make him increase the offer instead of attracting and retaining such enthusiastic candidates.
Emotions often play an understated part in getting hired and getting paid well. If you are naturally enthusiastic about something then there is no harm in showing it.
Stop worrying about the economy
A lot of people rest their case of salary negotiations keeping in mind the slow economic conditions. Unemployed job seekers are especially worried about turning off the employer with salary negotiation talks as they think that the employer is doing an obligation by giving them a job in this slow economy.
However, you need not think so. You’re not responsible for the economy and neither are you negotiating with the economy. At the interview, table is sitting an employer who needs you and who thinks that you can add value to his company.
The playing field might have changed as employers become more cautious and the job market more competitive but that doesn’t mean you should meekly accept whatever is offered. It’s probably logical that in lean times you won’t always get everything you ask for. But bad times or good; one thing that you should be sure of is, you won’t get it until you ask for it.
Following these tips will keep you from making a bad career mistake. Whichever strategy you chose, the result should be a job offer that keeps you at par with the industry, your peers, and the changing economic times.