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Expert Advice: Salary Negotiation

Posted by Kirsten Agnello-Dean on Jun 19, 2018 12:00:00 PM
Kirsten Agnello-Dean

How to Negotiate Salary

Hoping to get a big raise at your year-end review? Want to negotiate a bigger package at your new job? "Salary negotiations can be anxiety-filled on both sides but they shouldn't be," Thomas Neubauer, a managing partner with The Gap Partnership (a firm providing negotiation training), told Entrepreneur Magazine. So turn that frown upside down and learn how to negotiate with the best of them.

The Basics: The Three Rules of Negotiation

The Rules of Negotiation

First things first: let's talk about how to negotiate in general. Don't think you can? Think again. 
 
We negotiate every day, from sales calls to bedtime with toddlers, Hubspot says.
 
In a Master Class on Negotiation with Hubspot, sales pro Barrett King suggests six important rules to remember in negotiation. The first two are fairly common knowledge, but here's a refresher:
 
Rule Number 1: Negotiate in person, or at least on the phone.
larry
Our New Business Development Pro Lawrence Newquist II always says, "When opportunity calls, don't send it to voicemail."
 
Conversely, King says to never negotiate via email, text, WhatsApp, or any other form of written communication. Negotiation should be a one-on-one conversation in order to help diminish the various voices, loud noises, and extra opinions involved. Narrow it down to one person — the decision maker.
 
Don't work in sales or hate talking on the phone? Practice makes perfect. Make a conscious effort to get more comfortable calling and talking on the phone. Call Grandma — she'd love to chat with you and help.
 
Rule Number 2: The first person to give a number loses.
This old adage is one of controversy, but King believes it. "That's where you are stuck. You can go up; you can't go down." Don't start with a fixed number, he says.
 
What if you're pressed for one? A budget range is okay to give, but it's important to be ultimately transparent about the range. Commit to solving the problem but don't give them one number — that drops your anchor. Don't be afraid to give a range. "I'm thinking between $X and $Y," then ask if that range fits with their thinking suggests King.
 
Rule Number 3: Don't leave it open-ended.
When your call is over and you haven't closed the deal, don't leave the situation open-ended. Get a definitive next step. Try asking:
  • What is keeping you from saying yes?
  • When will you be ready to get started?
A trick to get an answer: Embrace the power of silence. Ask a question and then stop. Hit mute on your phone if you have to. Allow for the uncomfortableness to develop. Silence is your friend! King calls this constructive tension:
Allow your prospects to have that silence and let them digest. Once you get them to speak and "drop their anchor" first, let your prospect know what will be coming up in your next conversation. Set expectations and let them know where you'll be going. This gets you a "yes" to start!

The Basics: Five Ws of Negotiation

networking

Now that we've moved on from the rules, let's talk strategy. In negotiation, it's important to bring all the Ws together. King emphasizes, "Negotiation is a true conversation." These five Ws apply to sales, but you can easily fit them to asking for a raise or negotiating salary. 
 
Find out:
  • Who is the decision maker? Who is in charge?
  • What are their objections? What are they trying to buy?
  • Where are they making the decision from? Are there other people involved (VP, partners, colleagues)? Invite everyone into the party. Ask, "Who else can benefit from this information?"
  • When can we get started? What is their timeline? Tomorrow? Next month?
  • Why are you looking for XYZ? (To make a change in your role, change your strategy or provider, etc.) Take the number/budget they gave you and put it in context. Frame your pitch with your why.
The bottom line? Transparency and honesty is of the utmost importance. There's no need to play good cop/bad cop — ask for what you want in a polite and professional manner.
 
When it comes to salary negotiation, think long and hard before the conversation about what you're asking for and why. You don't need to negotiate for the sake of negotiation, but don't be afraid to ask for the money you want and the money you deserve.

Artisan CEO Bejan Douraghy spoke on a General Assembly panel about salary negotiation strategies and offered this bit of wisdom: 

bejan"Negotiations are not just about the billion-dollar deals, boardroom strategies, or company takeovers; it’s a process we use daily. Whether you're preparing for an interview, asking for a pay raise, renegotiating a contract, or slicing your company share, knowing how to effectively negotiate is necessary for every profession."

The key takeaway? Every negotiation is different. The first step for translating this advice to a salary chat? Doing your research and determining your worth.

Here are some places to start:

Salary Comparison Resources

How to Ask for a Raise

If you're asking for a raise or a rate increase, do your research. Find out what other professionals in your industry are making. Here are some good places to compare salaries:
  • Glassdoor
  • Talent Zoo
  • LinkedIn
  • Alumni associations
  • Talent agencies
  • Recruiters
  • Business associates

Don't forget to select similarly sized companies when comparing rates. You won't be able to ask for as much at a start-up as you'll be able to at an established worldwide agency. Consider the total package when looking at salary as well. "It's not just about the dollar amount at the end of the day," Douraghy says. Weigh in benefits like health insurance and paid vacation days. Maybe the company can't give you extra money, but they could give you more PTO.

Want a quick cheat sheet to all those salary guides you see on the internet? Check out ours.

Salary Guide Chicago

Download The Salary Guide

 

Do's and Don'ts Specific to Salary Negotiation

Salary Negotiation Tactics

You've gotten the courage to schedule that meeting. Here's how to go in prepared. Take these do's and don'ts from Glassdoor to heart when it comes to your negotiation.
 
1. Do Ask for Advice
“Advice-seeking is a powerful way to have influence without authority,” says Wharton School of Business Professor Adam Grant. Ask veterans at the company about their experiences, and you could gain some valuable advice about who to approach and how to make your case, as well as some possible history on precedents for negotiating in your role, Grant points out.
 
2. Do Be Honest
If you are deciding between two companies and offers, be honest. “All you need to do is share the terms of the competing offer, and say, ‘I’d rather come here. Is there anything you can do to make this an easier decision for me?’ More often than not, the answer is yes," says Grant. Always remember to be tactful if you're planning to play one job offer against another. Give them your "walk away" number and honor your word. Say, "If you give me this amount, I'll start tomorrow," and then follow through.
 
3. Do Take Notes
“Notes will help all parties recall what has already been discussed or decided. Be sure to get all offers in writing," advises the LDS Employment Resource Services. 
 
4. Do Follow Up
Everyone likes to be thanked. In addition to being a polite acknowledgment of those who met with you, a thank you note gives you one more opportunity to remind them what a stellar employee they have in you, says Career Expert and Writer Eileen Meyer. Not sure how to start? Read this.
 
5. Don't Lie...
...or hold back information. Employers can find out how much you were paid at your last job in many states, so embellishing will only make you look untrustworthy.
 
6. Don't Rush
Glassdoor suggests responding to an offer by restating the offer, sitting quietly, and silently counting to 10. Similar to embracing the silence, "this technique may also prompt the employer to justify the offer, which could continue the negotiation process, or it could lead to a better offer,” advises LDS ERS. 
 
7. Don't Be Stubborn

Be confident, but don't forget that a negotiation is just that — a negotiation. It's a conversation, not a dictation. "Listen to what the other side has to say and take it into consideration when offering up numbers,” says Hiring Manager Heather Huhman. “Money is a sensitive subject for most people, but you should never let a company have full control over your worth."

8. Don't Apologize 

Over-apologizing can be a major turnoff and make you appear anxious and fearful. When expressing an opinion, don’t say "sorry." Don't act unprofessionally, but realize that asking to be paid what you are worth does not warrant an apology.

9. Don't Be Underprepared

On that note, know your worth and come armed with details. At some point, almost every employer will ask what salary range you’re looking for, whether you're a new employee or asking for a raise. "You want to be prepared for this in advance, because if you’re caught off-guard, you risk low-balling yourself or otherwise saying something that will harm you in negotiations later. Be sure to do your homework ahead of time so that you’re ready with an answer when the question comes up," says Alison Green, author of How to Get a Job: Secrets of a Hiring Manager.

Asking for a Raise: Our Two Best Tips

Asking for a Raise

Head spinning with all that advice? Don't worry. Here are the most important things to remember:

Douraghy says "whoever mentions money first loses" is completely not true. While you don't want to bring it up as the first question of the first interview, you don't want to leave money on the table.

Feel free to bring up the numbers when it feels appropriate, but keep the following in mind:

Aim High
Offer your first number above where you want to settle to leave room for negotiation. You can always negotiate down, but it's incredibly hard to negotiate up if they accept your first offer.

Know When to Walk
Pick the absolute lowest amount you will settle for. Know what it is and be prepared to walk away if you don't get it.

How to Start the "I Need a Raise" Conversation

Douraghy also pointed out to the General Assembly audience that there is a KPI (key performance indicator) for every job. Before asking for a raise, make sure you know what the KPIs are for your job and that you are meeting them. Unsure? Just ask your boss.

Once you feel confident with your performance markers, make sure you are also:

  • Getting to work on time
  • Willing to take risks
  • Continually learning new skills
  • In alignment with the company values
  • In alignment with the CEO's values
  • Able to quantify how you add value to the company

Once you've identified all of these things, just do it. There doesn't need to be fear in negotiating. The worst thing that can happen is they say no.

Go Forth and Negotiate

How to Negotiate

Now that you're armed with some basic tools, you'll be ready to negotiate away. Need a job to practice your skills on? Check out our open positions here.

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