Are you negotiating a job offer or a raise in pay in your current role? If so, a lot depends on what you do right now, before you even begin salary negotiations. Do your homework, and you could wind up with more money in your pocket and maybe some life-changing perks and benefits, too.
How Much Are You Worth?
Especially if you’re negotiating with a prospective employer, you need to find out how much your skills and experience are worth in today’s job market. Take the time to research salaries long before you even begin discussing pay. That way you will be prepared to make your case and land a job offer that's realistic and reasonable.
What Are Salary Negotiations?
Salary negotiations involve discussing a job offer with a potential employer to settle on a salary and benefits package that’s in line with the market (and hopefully, that meets or exceeds your needs).
The most productive salary negotiations occur between people who realize that they have a common goal: to get the employee paid appropriately for their skills and experience.
Negotiations needn’t be adversarial, and no one has to get aggressive. If you’re a reluctant negotiator, it might help to keep in mind that you’re on the same side.
Negotiations can include all aspects of compensation, including salary, bonuses, stock options, benefits, perks, vacation time, and more.
How to Calculate Your Take-Home Pay
When you're considering a job offer, it's important to know the bottom line. How much will you be bringing home after taxes, FICA deductions for Social Security and Medicare, and contributions to health insurance and retirement benefits? That number is your net pay.
You can use free salary and paycheck calculators to estimate your net pay and figure out roughly how much you'll bring home in your paycheck. It’s important to get a ballpark figure before you negotiate or compare job offers.
Salary Negotiation Tips
- Wait for the Appropriate Time: Once you know what you should be earning, how do you go about getting it? Start by being patient. When interviewing for a new position, do your best not to bring up compensation until the employer makes you an offer.
- Resist Throwing out the First Number: If you're asked what your salary requirements are, say that they are open based upon the position and the overall compensation package. Or tell the employer you'd like to know more about the responsibilities and the challenges of the job prior to discussing salary.
- Base Your Salary Request on Data: If you’re forced to give a number, provide a salary range based upon the research you've done up front. Use this research to inform your negotiating technique. Talk about what’s appropriate for the role, based on your experience and what you have to offer. Resist the temptation to talk about your personal financial needs.
- Take Your Time: Once you've received the offer, you don't need to accept (or reject) it right away. A simple "I need to think it over" can get you an increase in the original offer.
- Consider Saying No: If you're ambivalent about the position, a "no" can bring you a better offer. Just be careful not to decline a job you really want. There’s always a risk that the employer may accept your answer and move on to the next candidate.
- Negotiate Benefits: Consider whether there are employee benefits and perks that might be negotiable, even if the salary isn't. For example, the employer might be willing to offer you telecommuting privileges once a week, or an alternate schedule. Depending on your preferences and situation, arrangements like that might be worth accepting a slightly lower paycheck.
Negotiating a Raise
- Prepare: If you are currently employed and want a raise, start by being prepared. Gather your salary research, average raise data, recent performance appraisals that document your achievements, and any other relevant information. Be aware of company policy regarding compensation. Some employers are limited by budget constraints and can only give raises at certain times of the year, regardless of the circumstances.
- Have a Clear Idea of What You Want: Determine the salary range you're looking for and the justification for the increase and have both ready to review with your supervisor.
- Be Flexible: Would you consider an extra couple of weeks of vacation instead of a raise? I know someone who has regularly taken time-off instead of money and now has six vacation weeks a year.
- Request a Meeting With Your Supervisor to Discuss Salary: Present your request, supported by documentation, calmly and rationally. Don't ask for an immediate answer.
Your boss is most likely going to have to discuss it with Human Resources and/or other company managers.
What to Do If the Employer Won’t Budge
Despite your best efforts, there may simply not be enough money in the budget to increase your salary or compensation package offer. The company may also not want to create inequities by paying one person more than others in a similar position.
In that case, you can at least know you tried. Plus, if this is a job you really think that you're going to love, consider whether the company culture, the benefits, and the job itself are worth it – regardless of the salary.