Negotiating Salary – Practice Makes Perfect

Back in November 2012, we posted our “Guide for Negotiating a Higher Salary” which was focused on background, salary data resources, and a tactical overview of how to approach negotiation. This month, we expand on the topic giving you more specifics on what and how to practice that critical part of securing any new career: negotiating your starting salary.


Let’s start by figuring out why negotiating a salary is so difficult for most people. We negotiate things every day often without even realizing it. We negotiate what movie to watch with our significant others; we negotiate where to eat lunch with our colleagues; some of us end up negotiating bedtimes with our children. So why do we freeze up when negotiating what we are paid?


Salary isn’t something we deal with all the time.  We might discuss salary at the start of the new job and perhaps once a year after that (many of us take a “cost of living increase” in salary each year and don’t discuss it at all). So, there is an element of unknown that instills fear in many people.   Other people fall victim to “politeness”, somehow believing it’s rude or inappropriate to talk openly with your boss about compensation for your efforts, or to the misconception that salary negotiation isn’t an employee’s responsibility.  Nothing could be further from the truth. You just need to develop the skills to negotiate effectively and confidently.


First though, let’s look at the impact of a good salary negotiation over the course of your career.  Say you’ve done your research and found average market salary for a job you are interviewing for is $45,000/year. Remember, that’s the average.  Assuming a reasonable range for the position is $40-50K, let’s look at how much difference it makes to negotiate your starting salary at the top end of the range versus the bottom end of the range.


The chart below shows the difference in how starting salaries of $40K and $50K respectively grow over a 40 year career. Most companies give raises as a percent of your current compensation, so the growth compounds each year (notice the lines aren’t straight).  Without getting too deep in the math, if you only got a 3% raise each year to keep up with cost of living increases over your career, that original $10,000 difference in starting salary would be $32,000 per year.


That’s the difference between making $126,000 per year and $158,000.  But that’s not the big difference.  During that 40 year career, the TOTAL difference in the money you’d earn would be more than a whopping $750,000.  That’s over three-quarters of a MILLION dollars you’re leaving on the table by poorly negotiating your starting salary.  And that’s assuming you never get a raise more than 3%!!!




Now that you can see the impact of starting salary, let’s talk about how to nail that negotiation and set yourself up for long term prosperity.  Your first step is to decide you’re going to take responsibility for your salary negotiation. Your employer’s responsibility, and your boss’s job, is to make sure the company is profitable and setup for future success. Only you are responsible for looking out for your career and compensation interests.


Next, we need to build a little confidence.  We do that by practicing.  Remember how easily you negotiated that movie choice with your significant other?  Well, that’s a lot less important, so practice negotiating salary until it’s second nature.  Practice with your friends; practice with your spouse; practice during interviews for jobs you don’t really care if you get (if you get good at it quickly, you might find you want that job after all – because it will pay you more).  We want to practice with people who are soft spoken as well as people who drive a hard bargain or are completely inflexible, so we can practice different approaches.  Ultimately, we want to be confident so we are not bullied into settling for a salary that’s less than our contributions should command.


Okay genius…what do I need to practice?  Good question. Assuming you’ve done your research (see “Guide for Negotiating a Higher Salary”) here are some ground rules for every salary negotiation:


He Who Speaks First Loses

When negotiating your salary, you’re bound to be asked “so what are your salary requirements?”  Don’t answer that.  If you blurt out a number that’s too high or out of the budget range for the position, you put yourself out of the running.  If you offer a number that’s far below what has been budgeted for the position, you leave money on the table and the interviewer gets a screaming deal.  Either way, you lose. Instead, divert the conversation to a discussion about what has been budgeted for the position, or what factors determine the salary for the role, or even put off the discussion entirely by saying something like “I don’t have a fixed requirement. I’m sure your company pays a fair salary for quality talent, so I’d rather determine if this is a great fit before we talk numbers.” (see more examples below)


Don’t Discuss What You “Need”

Your personal financial needs have nothing to do with what a company should pay you. They should pay you for the value you create.  If your needs change – say you win a small cash prize – should the company pay you less because you don’t need as much? Of course not. So don’t expect them to pay you more either.


Focus on Responsibility and Value

If you make a compelling case for the value you can bring to the company, your salary will be set higher because they don’t want to risk you rejecting the offer or going to work for a competitor.  If you feel like the position you are interviewing for has a low budgeted salary, focus on the level of responsibility you are looking for and the kinds of compensation warranted by that higher responsibility level.  There’s no reason a company can’t modify the position you’re interviewing for in order to get more value out of one hire!


Sweat the Details

When you practice negotiating, pay attention to your posture.  Sit up straight.  Maintain good eye contact. Speak clearly at an appropriate volume to sound confident, and don’t get caught trying to fill silence for the sake of filling it.  It is 100% acceptable to stop and think about what you are going to say before you say it.


Build a Library of Practiced Responses

Remember, he who speaks first loses.  You should think of all the ways employers try to negotiate the best deal for themselves and develop responses you can practice.  You want to be genuine in delivering language you’ve prepared ahead of time, but knowing rebuttals to common salary requirements questions during a negotiation can take a lot of the fear out of having the conversation.  Here are some of our favorite examples.  Feel free to use these and develop more of your own:


What are your salary requirements?


“I don’t have a fixed requirement. I’m sure your company pays a fair salary for quality talent, so I’d rather determine if this is a great fit before we talk numbers.”


“I’d like to develop a better understanding of the role you are trying to fill and my specific skills that match up, so I can determine my value to your company”


“I realize I need to create more value than I cost, so let’s talk about what is the best fit for me here at …”


“What is budgeted for the position? I’m sure if I’m the right person for the job, we can work within that range.”


If pressured to give a number, our favorite response to ease the pressure is:


“Well, I don’t have a specific requirement for salary, but rest assured…I don’t have an upper limit”


If the employer speaks first and the salary is too low:


“Well, it’s possible I haven’t done a good job clearly communicating my objectives.  I’m looking to fill a role with a responsibility level corresponding to a salary closer to $______. If I’ve misunderstood the responsibilities for this position, can we talk a little bit about how we might augment this position into such a role?”


“I know I can bring a lot of value to your company by ___________. I wonder if we might look for other unmet needs I could fill for your company/department/team/group that would get us closer to $_____.”


“I’ve done some research on salaries in this market, and I know positions like this one average about $ ____.  I’m confident my skillset puts me above the average.  Could I get you to consider a starting salary of $ ____ to have someone like me on your team?”


“I am looking for a role with a higher total compensation and I’m willing to work hard to earn it.  However, I’m also willing to consider other forms of compensation like (extra vacation, good benefits, bonuses or incentive pay, etc)”



Hopefully these arm you with some useful tools for your next salary negotiation.  Happy hunting!



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