Practical Tips on Salary Negotiation Tactics
Perhaps it’s because I loved my negotiations class in business school, but I firmly believe, no matter what the circumstance is for your initial job offer, you should negotiate for more… as long as you do it right!
It doesn’t matter whether the economy is booming or not. Once you get a job offer, negotiate. Previously, a friend of mine received a 20% increase in his contractor rate after he negotiated. In this case, his client low-balled him, as many do during a recession, because it’s an employer’s market. Many people are so thankful they were offered anything that they forget to ask for fair compensation. It’s still smart and okay to negotiate even in a tough market.
Here are four salary negotiation tactics that have worked for me and my clients repeatedly. There are also two tips on what NOT to do during salary negotiation. Being tactful is key.
Four salary negotiation tactics
- Be creative with what you negotiate. Your compensation is much more than just salary. There’s also signing bonus, performance bonus, moving expenses, car stipend (if you have to drive far for work), 401K matching, job title, vacation time, or pay grade. For example, even if the company can’t pay you a good salary now because of caps set in place due to the economy, negotiate to have a higher pay grade setting so that your future salary and increase can be higher.
- Be specific and reasonable. Tell the company what you actually want (a 10% increase, a guaranteed 5% bonus based on performance, a VP title, etc…) and make sure it’s not ridiculous. I was hiring someone who actually asked for 30% more in her salary when I knew she was already getting a 15% increase from her last salary. We almost rescinded her offer.
- Tell them at least one and preferably two plausible reasons on why you’re negotiating for more. It’s no good and can even be construed as offensive if you just said you want more money and can’t say why. Some good reasons are: 1. You have a better offer (whether you want to bluff about this is up to you. Like Poker, there’s a chance that they won’t call you on it); 2. Your market rate is higher (meaning the average pay rate right now for this level is X% higher than your offer); 3. Your current offer is a big step down from past compensation; 4. Sometimes the sympathy card could even work and say, “I have a new baby and I’m just trying to make sure I can get by and 10% more could really help!” You’ll be surprised at what you can leave on the table if you don’t ask.
- Express your enthusiasm to work for the company when negotiating. No employer wants to give you more unless they know that you’re almost certain to take it if they agreed. Also, it doesn’t hurt to convey that you have very good reasons (other than compensation) why you want to work for the company.
Two things to avoid during salary negotiation
- Don’t ever give an ultimatum – or anything that could be construed as an ultimatum. Salary negotiation is an art form and takes practice. Don’t ever back yourself into a corner because you most likely still want to take the job if they said no.
- Don’t be arrogant or an A__ when negotiating. Remember: the person you are negotiating with is most likely your future boss or someone who can influence your future boss’ opinion of you. This salary negotiation should be a good experience for both sides.
More people have been surprised at what they can get when they use the right salary negotiation tactics. It doesn’t hurt to ask if you do it right. With this said, there’s no guarantee anything will change with your offer. If the company declines your proposal, be sure to thank them for their consideration and make your decision on whether to join based on the existing offer. Either way, you’ll have gained more experience on how to approach negotiation in the future. We’ll change jobs many times in our careers. The experience you gain in mastering these salary negotiation tactics will pay off again and again in the future.