Negotiating Your Salary: How To Make $1000 A Minute by Jack Chapman | Book Review
If you’re like most people, when you look for a job, you usually want the highest salary you can get. But when it comes to negotiating salary, you may be nervous, unprepared, and end up just accepting whatever salary is offered. I know that straight out of college, I took an offer from the first company that would hire me out of sheer desperation!
Fortunately, since then I’ve learned a few things about salary negotiation. And while I’m no expert at it, I was able to use some of the techniques in this book to get a higher salary in my current position than what was originally budgeted. So if you’re not an expert either, learning some of these techniques may help you too.
Five Rules Of Salary Negotiation
Rule #1 – When To Discuss It
The best moment to talk about salary with your employer is when they decide they want you. So postpone salary negotiations until you’ve been offered the job. When you’re asked what salary you’re looking for, say something like this:
I’m sure we can come to a good salary agreement if I’m the right person for the job, so let’s first agree on whether I am.
I understand that you want to be sure you can afford me, and I won’t require a salary out of line with the job. But it’s a principle of mine not to discuss salary yet, because it can throw us off track. What’s really important is whether I’m right for the job and what I can produce for you.
Rule #2 – Let Them Go First
Once you’ve been offered the job, let them state the salary first. Here’s why:
If you go first and your figure is too high and out of their budget, you’ll lose the job.
If your number is too low, you may also lose the job. Since salary is related to your level of responsibility, they may think you’re underqualified. Or if your number is within their budgeted range, you may get the job but lose out on a few thousand dollars. (If you state that you require $32,000 per year, and they budgeted $35,000, you’d lose $3,000 per year!)
To influence them to go first, say something like:
I’m sure you have something budgeted for this position. What range did you have in mind?
I have some idea of the market, but for a moment let’s start with your range.
Rule #3 – Your First Response
Once you hear their exact figure or range, repeat that figure or the top of the range, then be quiet. Have a contemplative tone in your voice when you speak, then count to 30 in your head and think. This forces them to reconsider your quality and the return you’d make on their investment.
While thinking, compare their number with your research of what the job should pay (which you do before the interview). Two websites that can help you determine your market value are jobstar.org and salary.com.
Rule #4 – Counter Their Offer With Your Researched Response
Your mindset should be to get your top figure in a way that the employer thinks is fair. If the offer is too low, say something like this:
Thirty thousand dollars. I appreciate your offer, Mr. Employer. And, I’d love to work here. And I’m sure you want to pay me a compensation that is fair and will keep me committed and productive, right? Well, from my research, I estimate that positions like this for someone with my qualifications are paying in the range of X to Y thousand dollars. What can you do in that range?
Now you’re ready to continue an honest discussion to reach a common ground. Even if negotiating leads nowhere, you still have the original job offer that you can take or turn down.
Rule #5 – Cinch The Deal, Then Deal Some More
After coming to an agreement on salary, you can now move on to negotiating benefits and other perks. The first thing to explore is a salary review. To do this, you should say something like:
While my starting salary is important, I’m also very interested in the future, since I expect to work here for quite some time. In six months, when we review my performance, will it be on my demonstrated worth, or just a mechanical procedure?
If you are in sales, an important item to consider is your commission rate. If your work involves new-account generation, you should negotiate a residual commission on those accounts. The rationale behind this is that the reward for selling the account belongs to you. If you leave the company and the account is maintained, part of the income should still be yours for awhile. Don’t get cheated out of your commissions when you leave. A common misfortune in negotiating sales commissions is not being clear about what happens when you leave the company.
Even if you’re not in sales, negotiating a performance bonus is a win-win way of earning more money. You can pose an open-ended question to your employer, such as:
Let’s consider setting up a special bonus to encourage excellent performance. Can you think of a workable one?
And last but not least, if you can’t increase your salary, try to reduce the time. Negotiate vacation, personal days, or hours worked per week. To do this, first ask what the company’s policies are. Then frame your request in a way to help you be more productive on the job. You can say:
I usually throw myself so entirely into my work that I need a few breaks during the year to recharge. I’d like X weeks of vacation.
To keep this post relatively short, I’ve only covered the basics of salary negotiation. But this is a great book that covers many other situations that come up when discussing salary, such as how to handle applications that require your salary history, and negotiating stock options. Not only does it describe some of those common situations we go through, but it also shows specific examples of how to respond in a way that is in your favor.
Did you negotiate salary in your current position? Are there other techniques not mentioned here that helped you get a higher salary? Share them below.