SALARIES / OCT. 21, 2016
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Salaries: The Complete Guide to Negotiating Your Worth

salaries negotiating

Even though some people genuinely like their jobs; most of us are working for one reason: to make money. Whether it is increasing our wealth or just trying to cover basic expenses, we all share the same belief: more money is better.

Negotiating your salary is one of the most difficult tasks an employee will ever go through, and what makes it exceptionally difficult is the lack of transparency with which many employers approach it. Sometimes the process can feel like a poker game instead of a professional discussion; you could walk out of a negotiation still wondering whether you are being treated fairly. But this is not a good outcome for you or your employer!

Finding Your True Value

salary value

Having a salary that represents your value and knowing your worth is so important that according to PayScale's Compensation Best Practices Report 2016, pursuing a higher salary elsewhere was the top reason most employees decided to quit their job. The study also found that most employees aren’t aware of the current market wage trends or whether they’re being paid a fair wage.

Most people don’t realise just how important it's to negotiate your salary. A recent survey by Salary found that only 37% of candidates negotiate their salaries and 18% never do. What’s even worse, a whopping 44% didn’t even bring up the subject of a pay rise during their performance reviews. And what was the reason they never asked for more? It was fear.

We understand: it can be very hard and scary. But not doing it at all is even scarier. The true challenge to negotiation is overcoming the fear that holds you back from asking for what you deserve. But if you understand why it is necessary, then you are much more likely to take action and eventually achieve your goals.

Even though we have already discussed how money is a strong motivating factor - nearly everyone needs more money - it is not enough to convince people to let go of their fears and negotiate. While a £5,000 annual raise may sound awesome, when you break it down into monthly salary and factor in income tax (amongst other taxes) it is only £250 a month - and depending on your needs, this may not be enough. So, you must think bigger and not focus on a single paycheck. Using the previous example of a £5,000 annual raise, if you look at the bigger picture, in 20 years, you could earn £100,000 more.

You can pay for your child’s university fees or take a sabbatical and travel the world. So, if you focus on the lifetime earning of this raise, there will be more chances to negotiate with your employer.

But, a salary negotiation should be about more than just money. Think outside the box: when you are negotiating for the salary you deserve, you are showing the employer that you’ve done your research and you know you're worth. You are standing up for yourself and everybody else you work with - make it easier for everyone to earn the what they deserve.

Before you start negotiating or arrange a meeting, it is important to know why you want to negotiate. And as soon as you find out your reason, you should arrange a meeting to get what you deserve.

The Gender Pay Gap

gender pay gap

Most people have been asked what their current salary is during a job interview. This question is often asked to base your new job offer on what your current company thinks you’re worth and not what your actual worth is based on your skills, expertise and knowledge.

 

Women, according to the Institute for Fiscal Studies (IFS), earn 18% less than men on average as a result of the gender pay gap. Generally, British women earn £353,257 less over the course of their working life. Just think about it; that amount of money would easily erase student debts, pay for a dream home or even specialised health care. And unfortunately, this massive pay gap remains despite the fact that the number of women in the workforce is growing and now more women have advanced degrees than men.

Some people argue that the gender pay gap partially exists because women are less likely to negotiate a job offer or a potential raise. But, recent research shows that women do ask for more, they are just unlikely to get it.

Women are programmed to think and act a certain way since they are young. Even in the playground, little boys are seen as “leaders” whereas little girls acting the same way will be seen as “bossy”. Amanda Augustine, career expert at TopResume, says on Business News Daily that “Many women are scared to negotiate because they’re afraid of being considered too pushy. There is a fear that if they demand more money, the job offer will be revoked. They’re overly concerned about being polite, often to the detriment of their paychecks."

Also, according to a Glassdoor survey, American men have three times more chances of getting a raise after taking the initiative than women. The study also found that out of the 2,015 adults in the U.S only 4% of women managed to get a raise, compared to 15% of men.

They often feel the need to prove their value before they ask for a raise whereas, men, on the other hand, start these conversations confidently and expect to get a better job offer or a raise. I know, you are expecting me to offer you some quick salary negotiation tips for women, however, they do not differ if you are a woman or a man. All you need to do is focus on your current and future value, do your market research, and be a strong negotiator in general; these do not apply to a specific gender.

What is important here is that if you don’t ask for it, there is no chance you will ever get it; you have to negotiate.

Open Salaries

open salaries

I have a question for you: how would you feel if your colleagues knew how much you earned? Would you be afraid you’re getting overpaid? Ashamed because you think you make too little?

Several companies are opening up companywide salary information to all their employees, and though most of them do not disclose it to the public, one company posts all their employees’ salaries on their website; this company is Buffer. The company says that the concept was introduced to get any performance and play problems out of the way and initiate better performance among its employees.

For example, making salary information public can be a great conversation starter for employees who want to improve their salaries. They can do that by improving their performance or making an appointment with HR and ask for guidelines to increase their overall performance at work.

Job Offer Vs. Raise/Promotion

job offer vs pay rise

A salary negotiation can occur in two major instances. The first one is during the initial job offer stage, when interviewing for a new job; the second one is at your current workplace and is related to a raise or promotion.

Let’s take a look at these instances separately:

Job Offer Negotiation Methods

Remember that the purpose of a job interview is to sell yourself to the employer. If you don’t believe that you are worth the salary you are asking for, no-one is going to believe it.

If you focus on the value you are going to bring to the company and attach time and money to your accomplishments, enthusiasm and work ethic; you will have some strong points that allow you to negotiate your worth.

Here are two very specific salary negotiation methods.

Noel Smith Wenkle Method

Noel Smith Wenkle was a recruitment agent during the 1980s who developed the following method to get more money for his clients during any salary negotiations. One of the first rules is to never tell the organisation how much you want and instead let them make the first offer.

These are the four steps:

#1 On the application, if it asks you to put a number on it, don’t; just leave it blank.

#2 If the company asks you verbally what your salary requirements are, you say “I am more interested in working as a marketing executive here at GlobalRecords than on the size of your initial offer”. This answer would be sufficient 40 per cent of the time.

#3 If the company insists and asks again, just say “I will consider any reasonable offer”. This stalling tactic is a polite way to avoid saying a number and would be sufficient 30 per cent of the time.

#4 For the 30 per cent of you who reach this final point, you also have to refuse giving a clear number. You must say something like “you are in a better position to know how much I am worth to you”. Show them that this is your final answer and no matter how much they push you to say something first, you won’t.

Even though this may sound a bit risky, the purpose of the Noel Smith-Wenkle negotiation method is to allow the company be the one to set the first number. As soon as the company says a number you have two options: if the offer is above your minimum, accept it. If it's way below your minimum tell them it is in fact too low - but don’t say how much you would want. Let them lead the negotiation process.

Jack Chapman Method

Another interesting method of negotiating your salary is offered by career coach Jack Chapman. Here are the five rules to his method:

#1 Do not talk about salaries until you get a job offer by your potential employer. As soon as the employer decides you are the right candidate you should start talking about money. The same goes for raises- postpone talking about a salary increase until you have your performance review.

#2 Similar to the Smith-Wenkle Method, you should let the company make the first offer, not you.

#3 As soon as they tell you the offer, repeat the number and then stop talking. This is “the flinch”. This technique buys you some time to think as well as putting pressure on the organization to offer you a higher number.

#4 Make a counter offer that is carefully chosen based on the market, your skills and the company research you have done.

#5 Your last step is to clinch the offer and negotiate additional benefits like extra vacation days. This is a great way to be better compensated in the long run.

Raise or Promotion

Now that we have already talked about salary negotiation methods during a job offer, let’s look at the other instance of getting a well-deserved raise.

If you are reading this article, it probably means you feel like you are underpaid and undervalued at work. Or, maybe you have a performance review coming up, and this could be your chance to get paid what you’re worth. Now is your time to succeed; but to do this, you need to have a game plan.

Get in the Right Mindset

Nobody can just flip a switch and start making all the positive changes they want in their life. For example, if someone wants to have a healthier lifestyle they won’t just immediately start going to the gym and eating healthy meals. They will instead drop a few pounds at a slower pace. All you need to do is get in the right mindset, understand how important it is and that you have to take control of the process.

Research What You Deserve

If you have been at the same position for quite some time, it is easy to fall into a routine and not think about your salary. But, at least once a year, you should research and find out what your skills are worth in the current market. Make sure not to focus on what your company will be willing to pay you and focus instead on how much you want to get from a pay rise.

Think about your skills and current responsibilities and whether they match your current title and compensation. If the market says that you’re not being paid what you deserve, then it would be wise to make a plan and talk to your company about a promotion and a raise.

Build a Strong Case

When you are being interviewed for a job, a hiring manager is trying to predict whether you’ll be a good fit for the company whereas when asking for a raise, you’ve probably been working with your managers for a year or more so they know what your strengths and weaknesses are.

Present your accomplishments, what you have brought to the company - new clients, additional income, or a unique skill that no-one else has in your company. These things illustrate your value and are a great reason to ask for an increase in your salary.

Time it Right

If you think that getting a raise is as simple as just storming into your boss’ office tomorrow and demanding a raise, well sorry to break it to you but it’s far from that.

A great time to ask for a raise is after a major accomplishment or after someone else gave notice; it is all about the right timing. Even the day of the week can be important so make sure that you don’t schedule such an important meeting while your manager is going through a major crisis.

Role Play and Practice

Everyone thinks they are ready to ask for a raise, but as soon as the moment comes and they are sitting in front of their boss the words don’t come out, they forget important information or give in as soon as the boss rejects them.

It is crucial that you role play and practice your presentation and speech several times, with another person. You must know what you are asking for as well as be prepared for the rejections and challenges that might come up.

Present Your Argument

Now that you’ve gone through the previous steps, you are ready to do it! Walk your manager through your accomplishments and skills, and present your request for a raise in a professional way which will be based on research, data and goals you will achieve by moving forwards. Just step up, be confident and ask for what you deserve.

Does the idea of negotiating your salary give you hives? You are not alone. Almost everyone agrees that just the thought of standing up and talking with your boss or a hiring manager about your value can induce stress about potential conflict, rejection or even character assassination. But as we mentioned earlier, all you have to do is go there confident, prepared and strong. So, to help you with your preparation, here are the most common negotiation mistakes with suggestion on what to do instead.

#1 Failing to Adequately Research

There are relatively few employers that will offer you a top salary that would match the market and your value. They are actually offering you one on the low end hoping that you won’t negotiate, however, they are always prepared in case you do. This means that there is definitely a lot of room to wiggle. Therefore, make sure to research on sites like Glassdoor, Payscale or Salary and ask your network to make a more informed and realistic decision whether you should negotiate for a job offer or a raise and what should be your exact number.

#2 Focusing Only on Salary and not Mentioning Other Benefits or Perks

When you walk into a meeting with multiple things to negotiate, there will be more chances to get into an agreement. Therefore, make sure to make a “priorities” list with things like salary, remote working or vacation days. They might reject one of those but have the chance of them agreeing on something else; you could even suggest perks and benefits as alternatives to agreeing on a raise.

#3 Underestimating Your Strengths, Abilities and Authority

You need to believe in your own strengths and abilities before you try and convince someone else of your abilities. If you don’t believe in yourself, how do you expect others to believe in you, too?

#4 Forgetting About the Person on the Other Side of the Table

Many people walk into a salary negotiation meeting thinking about only what they want. But remember; you are sitting across from people who are also concerned about what you can bring to the table, your productivity and the profit of the company. The important thing here is to ask open-ended questions to understand their priorities, goals and preferences so your negotiation tactics can be formed around their interests as well.

#5 Becoming Intimidated by the Company’s Prestige, Rank or Manager’s Educational Background

Stop focusing on that and make sure to do your homework instead. Research the company, the people you’ll be speaking with and show how your skills match the company’s goals. Remember; they need you just as much as you need them!

#6 Negotiating Against Yourself

Don’t ask for a raise and soon follow it up with “but, of course, I am willing to negotiate”. Please don’t do that to yourself. Propose your number and back it up with data, your strengths and future goals and then be quiet; use silence as your weapon and avoid ruining all your chances by filling up the silence with “but…”.

#7 Waiting for Your Boss to Make an Offer

Has anyone heard of meritocracy? No? Didn’t think so.

These are just a few common mistakes people make when thinking about negotiating their salaries and quick tips on what to do instead.

Salary Information Websites/Calculators

salary calculator websites

Here are some great information websites and online calculators to make your life easier.

In an ideal scenario, both parties involved in a salary negotiation should leave feeling that they’ve won. You always want employers to have a good feeling about what they are paying you for your services. Use this article as your ultimate guide to negotiating your salary, but, keep in mind that there is never a guarantee that you will get a better wage because unfortunately, due to tight competition and strict budgets your results may be affected. Nevertheless, when you don’t even try negotiating you are in fact harming your career growth and life in general. So, follow this guide, do your best and try it to find out.

Have you ever been through this procedure before? Do you have any tips? Share them in the comments section below…

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