If you’re reading this, you’re probably missing out on $500,000.
No, seriously – check this out:
A recent study done by Salary.com showed that failing to negotiate salary causes people miss out on half a million dollars over the course of their career. That’s $16,000 per year for the average professional!
Easier said than done though, right? Trust me, I get it.
My Experience Negotiating Salary
When I graduated from college I didn’t do any salary negotiation for my first two jobs. I was terrified to even bring up the subject, there were too many doubts swirling in my head:
- What if they took my offer back?
- What if I got a reputation as the person who always asks for more money?
- I wasn’t even 100% qualified for these jobs, they would probably laugh in my face.
These concerns held me back for the first two years of my career. I had a starting salary of $35,000 for my first job out of college. My second offered me a small raise, but the number was still far from what I was hoping to make.
When the opportunity to land my third job rolled around, I did my research, had the money conversation, and everything changed:
My journey from entry level salary to increasing my earnings 500% over 2 years
I was able to negotiate a 40% raise on top of my current salary. Then, a year later, I landed a job that increased my salary 200% (a 500% increase over what I was making out of college).
The bottom line?
If you’re not negotiating your salary properly, you’re leaving tons of money on the table. Money you could use to pay off debt, buy a house, send your kids to school, or take a trip to Bora Bora.
In this post I’m going to share all of the strategies, tips, and the exact scripts I used to help you effectively negotiate your salary and get paid what you’re worth.
In order to do that, I’ve broken down this post into three parts:
- Why you always need to negotiate your salary and benefits
- How to talk salary during the interview process (and answer the dreaded question of “Can you tell me how much you’re currently making?”)
- How to effectively negotiate your salary and benefits at the end of the interview process to ensure that you’re being paid what you’re worth
Let’s dive in!
Part 1: Why You Always Need To Negotiate Your Salary & Benefits
When you walk into an interview, is negotiating salary an absolute must for you? It should be for everyone (I’ll show you why in a second) but in reality, it’s rarely brought up.
That same Salary.com survey showed that 62% of people never negotiate their salary, or only negotiate it “occasionally.”
That seems crazy now that you know you’re leaving $500k on the table, right? Turns out, money isn’t the biggest motivator — fear is. The fear of being rejected, blackballed, and removed from the process without an offer outweighs our desire for a few extra bucks.
If you’re the type of person who would rather jump in the Atlantic in February than talk about money, you’re not alone. Close to half of the people surveyed mentioned being anxious or apprehensive about having the conversation for the following reasons:
- 43% of respondents said they’re scared of being rejected
- 15% didn’t think they had the negotiation skills to successfully get what they wanted (and worried about looking “dumb”)
- 15% feared they’d be removed from the process if they asked for more money
- 13% were wary of other kinds of lingering retribution if a request for more money went south
While finding the courage to speak up about your salary and negotiating what you’re worth can be tough, it’s an absolute must. If the extra $16k a year didn’t sell you, here are a few more reasons why:
- People who negotiate receive an average of 25% more than they expected
- Only 15% of people who negotiate get absolutely nothing out of it
- After spending a few hours looking, I didn’t find one case where a person lost their job offer when asking for a reasonable increase in salary and made a case for it
The fears we feel when it comes to talking about money are mostly in our head. Next, I’ll show you how to prepare your case and give you the exact scripts you can use to take the nerves out of the conversation and get paid what you’re worth.
Part 2: Salary Negotiation Starts Early In The Interview Process
We’ve all had to do it. Whether it was the first thing out of a recruiter’s mouth or the last thing you’re asked in the interview process, we inevitably have to deal with the dreaded question about our salary.
It can come in many (heavily sugar coated) forms:
“May I ask how much you make at your current company? We’re trying to gauge if we’re in the right range.”
“And what is your desired salary for this role? We ask all of our candidates, I’m sure you understand.”
“Why don’t you go ahead and tell me what you’d like to be paid for this role and we’ll see what we can do?”
They can spin it any way they want but when companies ask you this question, they have one goal in mind: To get you to reveal a number. When it comes to negotiating salary, there is a single golden rule:
The #1 Rule Of Salary Negotiation:
The First Person To Give Up A Number Usually Loses
As soon as you’ve put the cards on the table, your potential employer gains a massive amount of leverage.
What if you were easily the most qualified (and best) candidate they interviewed, but you told them you made $50k while the other candidates dodged the question? The company may have been prepared to offer $100k for the role but now they think they can get you for $65k. Not good!
In a perfect world, we could totally avoid this question or we could clam up and refuse to answer until we had an offer in our lap. Unfortunately, the world isn’t perfect and we’re not going to get what we want unless we know how to ask for it.
The good news is that there is a way to appropriately deal with this question in all of its forms to ensure that you are in the best position possible to negotiate a salary you deserve. Next, we’ll walk through the 3 most common instances of this question:
- What to do when you are asked to divulge your salary early on in the interview process
- What to do if your potential employer will not move forward unless you give them an answer
- How to deal with employers who ask you to “name your price”
Scenario #1: What To Do When Your Recruiter/Interviewer Asks For Your Salary Early On
In my experience, this is the most common scenario that applicants deal with. It’s also the most harmful in terms of your ability to negotiate salary.
When it comes to the interview process, the farther you go, the more leverage you have. You probably already know this, but I want to reiterate it here. When a company calls you in for a phone screen or a first round interview, you are most likely competing against dozens of other candidates. The company is actually looking for ways to disqualify people at this stage (which is why you may get dinged for only having 7 of the 8 “required skills”).
If you give away your salary now, by the time you make it to the final round you may get an offer but it will probably be anywhere from 30-60% lower than what you might have been able to get. You don’t deserve that. You deserve to be paid what you’re worth.
So how do you handle the question? Here is a word-for-word script you can use:
Recruiter: “May I ask how much you make at your current company? We’re trying to gauge if you’re in the right range.”
You: “I am very open to negotiation, but my top priority is finding the right fit. Once that is established, I am more than happy to talk salary.”
Boom! You didn’t violate the golden rule and you bought yourself some time to gain additional leverage. All good things.
Unfortunately, many companies tend to get a little upset when they don’t get what they want. They may not let you get out of there with your cute little attempt to dodge their bullet. The follow up typically looks like this:
Recruiter: “I completely understand that you want to find a good fit – so do we! However, we don’t move forward with candidates unless we know what range they fit in.”
This leads us into our next scenario.
Scenario #2: What To Say When The Employer Will Not Move Forward Without A Salary
This can feel like you’re stuck between a rock and a hard place. If we don’t violate the golden rule we may be packing our bags, but if we cave and give a number then we may be losing out on a massive chunk of potential salary.
In this case we’re going to give a number, but we’re going to do it with a twist. Before you go on any job interview, you need to do a little bit of market research on salaries. The best tools for this are:
For this example, let’s say you want to be a Product Manager at Facebook.
Your next step is to head over to Glassdoor and look for the salaries page. Search for “Product Manager” in the job titles filter. You should see a salary range pop up based on people who have submitted information about the role:
We’re aiming for the top 80% – 100% of that range. That’s what we’re going to bring with us into the interview. In the case of our Product Manager at Facebook, it would be $168,000 – $210,000.
You’re also going to want to pick a singular figure that you can spit out as well. I recommend something that’s right at the 85% mark, $178,500 in our example here.
Pro Tip: Don’t use round numbers when giving a specific figure in your negotiation. Instead of saying you want $90,000, tell them you’ve done the math and you’d be comfortable with $91,650. Research at Columbia shows that candidates using precise numbers land higher salaries vs. those who used round numbers.
Now when a recruiter asks you for a number, you’re able to give them that 80% – 100% range or the specific 85% figure (depending on the context of the question).
This strategy will also be your approach to answering if a company forces you into naming your price.
If you can’t find the salaries for a position at that exact company, do a bit of research and figure out what the average salary is for similar roles at other companies. Then calculate the range based on that.
Part 3: A Step-By-Step Guide To Negotiating A Salary & Benefits Package You Deserve
It’s just after 6pm and you’re on your way home currently debating whether tonight is going to be sushi and Netflix on the couch or bar food and beer with your crew. Then it happens.
The phone rings.
The call you’ve been waiting for all week.
You pick up and the answer on the other end confirms it. They offered you the job! Amazing.
In your head you’re jumping up and down and planning on putting in your 2 weeks tomorrow — until they tell you your salary. It’s not quite what you expected.
Many of us have found ourselves in similar situations. We made it through the entire interview process, we know our skill set is there and we’ve done our market research. But when the company’s offer doesn’t reflect what you’re worth, here’s how you fight back:
Step 1: Always Negotiate Your Salary
The worst thing you can do in this situation is accept the offer. The second worst would be to walk away. Remember, people who negotiate earn up to $16,000 more on an annual basis.
Always, always negotiate your offer unless your contact specifically states that it is non-negotiable.
Start off the conversation like this…
“[Name], thank you very much for your consideration – I am incredibly thrilled to have this opportunity and I really appreciate all of the time and effort you all have put into this process. I have done some comprehensive research during my process and have found that the average salary for this position is around $XXX,XXX*. Is there any way we can make up the difference there?”
*This number should be that 85% figure that you came up with earlier, not the average salary for the position
Now you’ve expressed your interest in the offer but also stood firm on what you’re worth. Companies make millions and millions of dollars each year, paying someone an additional $10-$30k is not going to break the bank. If they turn you down because you’re aiming to negotiate a bit, there are other problems there.
Step 2: Push or Stay
Now the employer is either going to do one of two things:
- Offer to make up the gap, but then come in slightly below the average
- Say that they have been given “a number” for this position that they can’t exceed
If you find yourself in the first scenario, consider the offer. Is the new number a substantial raise based on your current salary? If so, feel free to take it. No need to push any further than we have to.
If you find yourself in the second scenario, you’ll need a bit of a trump card. The best route is to present the data you’ve found in a respectful fashion and ask them to reconsider one last time.
First, round up all the data you can find on the salaries using Glassdoor and Paysa:
- How low is the smallest salary submitted?
- How many salaries are in the 0-25% range vs. the 50%+ range?
You want to build a case around the fact that the salary they offered is low and that it appears to be an outlier when compared to the other salaries they’ve offered for the same position.
Next, you want to have a copy of your proposed solutions that you drafted up at the beginning of the interview process. If you’re not familiar, I break down exactly what that is and why it’s helpful (for avoiding online application portals, for crushing the interview process and for negotiation) in my post How To Get A Job Anywhere With No Connections.
Then you want to present your case. Here is an example:
“[Name], thanks so much for the information around the position. I really appreciate it! I mentioned that I did some research and I wanted to share what I found. From ~25 submissions, the average salary for this position appears to be $XXX,XXX. Additionally, the lowest salary in the range is $YYY,YYY however almost 70% of the salaries are at least $30,000 higher. I am curious as to why this salary is much lower than the average that you are paying other people for this position.
I don’t mean to come off as aggressive or pushy, I would just like to have all of my bases covered before I make a decision. I am extremely excited about the opportunity to work for [Company] and I am ready to say yes pending this one detail.
Lastly, I’ve put together a proposal that includes several solutions to some of the largest challenges the team is current facing. I’ve attached it here but it should help the team overcome some of the obstacles they have been facing and help boost [performance metric].
Please let me know if it would be possible for you all to take another look given the information above.
Now, a little voice in the back of your head may be saying “but what if they take my offer away!”
This is all part of the negotiation process. If you don’t ask for it, nobody will give it to you. I have never, ever heard of anyone being rejected from a job because they tried to negotiate their salary.
The worst case scenario is that they come back and tell you that they absolutely cannot budge. In that case, the decision becomes fairly black and white.