How to Negotiate Salary in 2021
By Mike Simpson
Most professionals understanding that knowing how to negotiate salary is crucial. If you can negotiate successfully, you aren’t just boosting your pay today; you’re increasing your overall earnings potential for the rest of your life.
Even knowing how powerful talking about pay during the job search process can be, only 39 percent of professionals actually try to negotiate. And not going for more money usually means losing out on about $7,528 per year.
But what if you don’t know how to negotiate salary? Are you just out of luck? Hardly. By learning how to do it today, you can position yourself for greater success tomorrow. When you’ve got a new job offer in-hand or want to secure a raise at your current job, here are some salary negotiation tips that can make a huge difference.
What Are Salary Negotiations?
Alright, before we dig deep into how to negotiate salary, let’s take a step back and talk about what salary negotiations even are.
In the simplest sense, a salary negotiation is a back-and-forth conversation. While it doesn’t have to happen in real-time, the process involves two parties – an employee or candidate and a company representative, like a manager – discussing how much a worker or prospective new hire should be making.
Usually, for candidates who are top contenders for a job, the process begins when they receive a formal offer. In that offer, there are traditionally details about compensation, including the starting salary and an outline of any benefits they’ll also receive.
Now, some professionals assume that the amount of money in the job offer is top dollar. In reality, it typically isn’t.
Think about it; companies want to make money, not spend it. If they can get a great candidate for less, of course, they are going to do it. As a result, most aren’t going to put the highest amount they are willing to pay in the offer. Instead, they’re more likely to aim below that mark, sometimes significantly.
With salary negotiations, you’re creating an opportunity to up that offer. You’re openly stating that you think you’re worth more, an uncomfortable but, at times, necessary position.
But you don’t just say, “I want more money.” No sirree. Instead, you provide a counter offer. That’s a specific salary that you think is more appropriate based on your skills and the nature of the role.
After that, the company can accept. However, what’s more likely is that it’ll counter your counteroffer. This is the start of a new round of back-and-forth, where you can either accept or counter that counter counteroffer.
The negotiation continues until one of two things happens. One, either party can decide that the second party’s last offer was on target and accept it. Two, one party can decide that getting on the same page isn’t possible, and then decline the offer if it’s the candidate or withdrawal the job offer it’s the company.
MIKE’S TIP: Yes, you read that right; the company can withdraw the offer if they don’t want to meet your salary requirements. Now, does that mean you shouldn’t negotiate? Of course not! Getting paid what you’re worth is important. So, if your choices are to accept a job that pays less than you’re worth or risk not landing a low-paying job, go with the latter.
But what if you’re going for a raise? Well, the process is similar. It’s the same style back-and-forth, except it’s between you and your manager (or decision-maker). You’ll still present a case showing why you’re worth some extra cash, and the manager may counter or decline your request. The main difference is not being on the same page doesn’t usually end in a job loss, that is, unless you decide to quit if they say no.
In the end, a salary negotiation is just a specific kind of conversation. You have a particular goal – to get paid appropriately for your skills, your experience, and the job requirements – so that’s what the dialog focuses on.
NOTE: Check out our other in depth article on how to handle the salary issue in your job interview.
Determining Your Worth
When you’re trying to figure out how to negotiate a salary offer, one of the biggest steps you need to take is determining your worth. After all, your request won’t have much clout if you aim for a number that isn’t reasonable for your position. And, on the other side, if you underestimate your worth, you’ll shoot too low, leaving money on the table.
So, how do you figure out your worth? With research, of course.
Thanks to the glorious invention that is the internet, salary research is pretty easy. Sites like Salary.com, Payscale, and Glassdoor all have information available. You can also head to the Bureau of Labor Statistics for salary data on a whole slew of positions.
Even job ads from other companies can be helpful. See what local competitors are paying employees who are working in that role, and use that to build your case more.
Keep track of the information you find. That way, when you start a salary negotiation email or phone conversation, you can cite real data that backs up your request. By relying on cold, hard facts, your odds of getting a pay bump go up significantly.
Common Salary Negotiation Mistakes
Sometimes, a single mistake during a salary negotiation can completely derail your case. Luckily, by learning about common errors, you can avoid them.
When you enter a salary negotiation, you want to come across as confident. However, if you cross into aggressive or condescending, you’ve made a big misstep. Bullying your way into more pay isn’t going to work. Instead, it just makes you seem like a miserable person to deal with and will likely cause the company to rescind their offer entirely.
Another big mistake is apologizing for asking for more money. If you say that you’re “sorry” at any point, you come across as uncertain or like you think you’re out of line. So, strike the word “sorry” from your vocabulary when you’re negotiating.
Similarly, you should avoid saying “no” during the conversations. Negative words can seem combative, harming the overall dialog. It can also make it look like you’re done talking or aren’t open to the company’s perspective.
Ideally, use a more cooperative approach. For example, don’t say, “No, that number won’t work for me.” Instead, try, “While I appreciate that offer, I’d be more comfortable with a salary of…”
Finally, make sure you take the value of the total compensation package into account. Usually, the salary number is only part of the equation; the benefits matter, too. Consider how much their worth, both financially and to your life.
For example, examine the premium prices and out-of-pocket medical expenses that come with the company’s healthcare plan. Look at the retirement benefits, including if there’s a company match and how big that is. That way, if the value of the benefits makes a higher or lower salary more appropriate, you’ve factored them into the equation.
Top 10 Salary Negotiation Tips
Here’s a look at ten salary negotiation tips that can make a huge difference.
1. Don’t Throw Out the First Number
Sometimes, negotiating a salary offer doesn’t actually start with a formal offer. Instead, it begins much more casually.
For example, the hiring manager might ask you, “What are your salary expectations?” during your interview. That’s a subtle way for them to figure out how much you want. And they’ll use that information when it comes time to extend an offer.
If you’re faced with that question, sidestep it. You can say that you’re looking for a fair total compensation package, so your salary expectations may vary depending on the benefits you’ll receive. You can also assert that you need to learn more about the role before discussing salary if you don’t feel you have enough information to settle on a number.
Along the same lines, don’t be the person to bring up salary. If the hiring manager doesn’t broach the topic, leave it alone. Instead, wait for an offer.
2. Rely on Data
As we mentioned above, you need to do some research to know your worth. But you also want to reference that research when you’re negotiating a salary offer.
Citing your sources makes your request more credible. Plus, it removes emotion from the equation, and that can work in your favor.
3. Know What You Bring to the Table
Along with knowing your value, being able to talk about why you’re the bee’s knees is important. If you’re asking for a raise, sharing details about recent high-value achievements makes your case stronger. If you’re negotiating a job offer, showcasing your accomplishments lets you highlight why you’re a great candidate who’s worth more than the initial amount.
This is just one more way to justify your request. After all, the manager needs to see you as an amazing current or prospective employee. That way, saying yes seems like the right move for them and not just for you.
4. Don’t Rush
Whether you’re getting ready to respond to a salary negotiation email or in a conversation, don’t rush. If you have an offer in hand and need a moment before you present a counteroffer, say that you need to think the offer over.
You can ask for a specific amount of time – say, 24 to 48 hours – or leave it a bit vague initially. Just understand that you don’t have forever to reply.
5. Aim Near the Top
During a salary negotiation, you might think that the first salary you toss out should be higher than the minimum amount you’re willing to accept. Why? Because the odds are high that the company is going to counter.
If you aim too close to the middle of the fair salary range for the job, there’s a good chance the company is going to try and push the number down. By aiming near the top of that salary range, you’re creating room for that, making it more likely that you’ll actually end up with the number you want.
6. Be Precise
Usually, people round off their salary requests to the nearest thousand-dollar mark. But not rounding off can actually work in your favor. It makes it look like you’ve done your research – and really know you’re worth – because the number is precise.
So, instead of asking for $75,000 a year, go for $74,850. If you do, you might increase your odds of getting closer to what you want.
7. Make Sure It’s the Right Moment
If you’re trying to score a raise, you need to time it right. Have you been excelling in your role recently, exceeding expectations at every turn? Have you been adding new responsibilities to your plate? Was your last raise (or hire date) more than one year ago? Is the company in good shape, with rising or stable profits?
If you answered yes to all of those, then now might be the right moment. But if you answered no, you might want to wait until you can say yes to all of those. That way, you increase your odds of getting what you’re after.
8. Practice and Hone
As with all things, practice makes perfect when you’re negotiating salary offers. If you’re speaking with the hiring manager or your boss about pay, rehearse what you’re going to say in advance. That way, you’ll get comfortable with your talking points, increasing the odds that you can share them confidently.
If you’re sending a salary negotiation email instead, really hone it. Start with a first draft. Then, ruthlessly edit it. Scour it for mistakes. Tweak the language to make it powerful. Quantify the details. Cite your sources.
Ultimately, a little bit of time spent now can make a world of difference. So, perfect your skills and presentation as much as you can before you engage in the conversation.
9. Be Open-Minded
In some cases, companies can’t offer you much more in the way of money. But that doesn’t mean they can’t sweeten the deal.
Maybe, instead of cash, they’d be open to more paid vacation days or to a hire retirement contribution match. Possibly, they could add a tuition assistance program or student loan repayment benefit into the mix.
If more money really isn’t an option, see if there’s anything else they can do to bring up the value of your total compensation package. That may be a way to get everyone on the same page without having to bump up your paycheck directly.
10. Have a “Walk Away” Point
Even if you employ every salary negotiation tip and strategy in the book, there’s no guarantee you’ll get close to what you want. Maybe the company isn’t willing or able to offer fair market value for your skills; it happens.
While it’s okay if there is a couple of rounds of back-and-forth, if it’s clear that you’re not on the same page and aren’t going to see eye-to-eye no matter what you say, walk away. Sure, saying no to a job offer isn’t easy but, if it’s not right, it’s not right.
Don’t say yes out of a misguided sense of obligation. Instead, cut your losses and refocus on your job search. After all, the next time an offer comes around, it might be just what you’re after. But you won’t know that if you don’t walk away when an offer isn’t going to work.
Putting It All Together
Ultimately, knowing how to negotiate a salary is a must. With the tips above, you can enter your next salary negotiation fully prepared. In the end, that can increase your odds of getting a fair number dramatically, allowing you to boost your earnings potential today and well into the future.
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Co-Founder and CEO of TheInterviewGuys.com. Mike is a job interview and career expert and the head writer at TheInterviewGuys.com.
His advice and insights have been shared and featured by publications such as Forbes, Entrepreneur, CNBC and more as well as educational institutions such as the University of Michigan, Penn State, Northeastern and others.
Learn more about The Interview Guys on our About Us page.