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Negotiate Salary

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What are you worth? How much should you be paid in dollars? Can you demonstrate your value to employers? What dollar value will the employer assign to you? What salary are you willing to accept?

You think you are worth a lot. After impressing upon the employer that you are the right person for the job, the bottom line becomes money -- your labor in exchange for the employer's cash and benefits. How, then, are you going to deal with these questions in order to get more than the employer may initially be willing to offer?

Demonstrate Your Value



The salary question is awkward for many applicants who are reluctant to talk about money. They think one must take what is offered because salaries are set by employers. Such thinking is unfortunate, because it means many people are paid less than what they could be getting if they knew some basic techniques for negotiating salaries. Most people are probably underpaid by $3,000 or more because they don't use such techniques.

Except for many entry-level positions for people without experience, salary is seldom predetermined. Most employers have some flexibility to negotiate salary. While they do not try to exploit applicants, neither do they want to pay applicants more than what they are willing to accept.

Salaries are usually assigned to positions or jobs rather than to individuals. But not everyone is of equal value in performing the job; some are more productive than others. Since individual performance differs, you should attempt to establish your value in the eyes of the employer rather than accept a salary figure for the job. The art of salary negotiation will help you do this.

Establish your value in the eyes of the employer rather than accept a salary figure for the job.

Money in Your Future

We all have financial needs which our salary helps to meet. But salary has other significance too. It is an indicator of our worth to others. It also influences our future income. Therefore, it should be treated as one of the most serious considerations in the job interview. The salary you receive today will influence your future earnings. Yearly salary increments will be figured as a percentage of your base salary. When changing jobs, expect employers to offer you a salary similar to the one you earned in your last job. Once they learn what you made in your previous job, they will probably offer you no more than a 10% to 15% increase, regardless of your productivity. If you hope to improve your income in the long run, then you must be willing to negotiate your salary from a position of strength.

Prepare for the Money Question

You should be well prepared to deal with the question of salary anytime during your job search especially during the job interview. Based on your library research on salary ranges for different positions as well as salary information gained from your networking activities, you should know the approximate salary range for the position you are seeking. If you fail to gather this salary information prior to the screening or job interview, you may do yourself a disservice by accepting too low a figure or pricing yourself out of consideration. It is always best to be informed so you can be in better control to negotiate salary and benefits.

Keep the salary question open until the very last.

Raise the Financial Question

The question of salary may be raised anytime during the job search. Employers may want you to state a salary expectation figure on an application form, in a cover letter, or over the telephone. Most frequently, however, employers will talk about salary during the employment interview. If at all possible, keep the salary question open until the very last. Even with application forms, cover letters, and telephone screening interviews, try to delay the discussion of salary by stating "open" or "negotiable". After all, the ultimate purpose of your job search activities is to demonstrate your value to employers. You should not attempt to translate your value into dollar figures until you have had a chance to convince the employer of your worth. This is best done near the end of the job interview.

Employers traditionally assign salary to the job or position rather than the individual. Although they will have a salary figure or range in mind when they interview you, they still want to know your salary expectations. How much will you cost them? Will it be more or less than the job is worth? Employers preferably want to hire individuals for the least amount possible. You, on the other hand, want to be hired for as much as possible. Obviously, there is room for disagreement and unhappiness as well as negotiation and compromise.

One easy way employers screen you in or out of consideration is to raise the salary question early in the interview. A standard question is "What are your salary requirements?" When asked, don't answer with a specific dollar figure. You should aim at establishing your value in the eyes of the employer prior to talking about a figure. If you give the employer a salary figure at this stage, you are likely to lock yourself into it, regardless of how much you impress the employer or what you find out about the duties of the job.

Therefore, salary should be the last major item you discuss with the employer. You should never ask about salary prior to being offered the job, even though it is one of your major concerns. Try to let the employer initiate the salary question; and when he or she does, take your time. Don't appear too anxious. While you may know -- based on your previous research -- approximately what the employer will offer, try to get the employer to state a figure first. If you do this, you will be in a stronger negotiating position.

When the salary question arises, assuming you cannot or do not want to put it off until later, your first step should be to clearly summarize the job responsibilities/duties as you understand them. At this point you are attempting to do two things:
  1. Seek clarification from the interviewer as to the actual job and all it involves.

  2. Emphasize the level of skills required in the most positive way. In other words, you emphasize the value and worth of this position to the organization and subtly this may help support the actual salary figure that the interviewer or you later provide.
You might do this, for example, by saying,

As I understand it, I would report directly to the vice-president in charge of marketing and I would have full authority for marketing decisions that involved expenditures of up to $50,000. I should have a staff of five people --a secretary, two copywriters, and two marketing assistants.

Such a summary statement establishes for both you and the interviewer that (1) this position reports to the highest levels of authority; (2) this position is responsible for decision-making involving fairly large sums of money; and (3) this position involves supervision of staff.

Although you may not explicitly draw the connection, you are emphasizing the value of this position to the organization. This position should be worth a lot more than one in which the hiree will report to the marketing manager, be required to get approval for all expenditures over $100, and has no staff - just access to the secretarial pool! By doing this you will focus the salary question (that you have not yet responded to) around the exact work you must perform on the job in exchange for salary and benefits. You have also seized the opportunity to focus on the value of the person who will be selected to fill this vacancy.

Your conversation might go something like this. The employer poses the question:

What are your salary requirements?

Your first response should be to summarize the responsibilities of the position:

Let me see if I understand all that is involved with this position and job. I would be expected to--Have I covered everything or are there some other responsibilities I should know about?

This response focuses the salary question around the value of the position in relation to you. After the interviewer responds to your final question, answer the initial salary question in this manner:

What is the normal range in your company for a position such as this?

This question establishes the value as well as the range for the position or job -- two important pieces of information you need before proceeding further into the salary negotiation stage. The employer normally will give you the requested salary range. Once he or she does, depending on how you feel about the figure, you can follow up with one more question:

What would be the normal salary range for someone with my qualifications?

This question further tries to establish the value of the individual versus the position. This line of questioning will let you know the salary expectations of the employer without revealing your desired salary figure or range. It also will indicate whether the employer distinguishes between individuals and positions when establishing salary figures.

Reach Agreement

After finding out what the employer is prepared to offer, you have several choices. First, you can indicate that his or her figure is acceptable to you and thus conclude your final interview. Second, you can haggle for more money in the hope of reaching an acceptable compromise. Third, you can delay final action by asking for more time to consider the figure. Finally, you can tell the employer the figure is unacceptable and leave.

The first and the last options indicate you are either too eager or playing hard-to-get. We recommend the second and third options. If you decide to reach agreement on salary in this interview, haggle in a professional manner. You can do this best by establishing a salary range from which to bargain in relation to the employer's salary range. For example, if the employer indicates that he or she is prepared to offer $25,000 to $30,000, and these figures are consistent with the salary data you gathered in your informational interviews, you should establish common ground for negotiation by placing your salary range into the employer's range. Your response to the employer's $25,000 to $30,000 range might be:

Yes, that does come near what I was expecting. I was thinking in terms of $28,000 to $34,000.

You, in effect, place the top of the employer's range into the bottom of your range. At this point you should be able to negotiate a salary of $30,000 to $32,000, depending on how much flexibility the employer has with salaries. Most employers have more flexibility than they are willing to admit.

Once you have placed your expectations at the top of the employer's salary range, you need to emphasize your value.

Remember the supports we discussed in Qiapter Ten. It is not enough to simply state you were "thinking" in a certain range; you must state why you believe you are worth what you want. You might say, for example,

The salary surveys I've read indicate that the salary for the position in this industry and region is between $28,000 and $35,000. Since, as we have discussed, I have extensive experience in all the areas you outlined, I would not need training in the job duties themselves -- just a brief orientation to the operating procedures you use here at_. I'm sure I could be up and running in this job within a week or two. Taking everything into consideration, especially my skills and experience and what I see as my future contributions here, I really feel a salary of $34,000 is fair compensation. Is this possible here at_?

Another option is to ask the employer for time to think about the salary offer. Ask to sleep on it for a day or two. A common professional courtesy is to give you at least 48 hours to consider an offer. During this time, you may want to carefully examine the job.

Is it worth what you are being offered? Can you do better? What are other employers offering for comparable positions? If one or two other employers are considering you for a job, let this employer know his or her job is not the only one under consideration. Let the employer know you may be in demand elsewhere. This should give you a better bargaining position. Contact the other employers and let them know you have a job offer and that you would like to have your application status with them clarified before you make any decisions with the other employer. Depending on how much flexibility an employer may have to accelerate a hiring decision, you may be able to go back to the first employer with another job offer.

With a second job offer in hand, you may greatly enhance your bargaining position.

Negotiate from a position of strength -- not greed.

In both recommended options, you need to keep in mind that you should negotiate from a position of strength - not greed. Establish your value, learn what the employer is willing to pay, and negotiate in a professional manner. How you handle the salary negotiations will affect your future relations with the employer. In general, applicants who negotiate well will be treated well on the job.

Take Benefits

Many employers will try to impress candidates with the benefits offered by the company. These might include retirement, bonuses, stock options, medical and life insurance, and cost of living adjustments. If the employer includes these benefits in the salary negotiations, do not be overly impressed. Most benefits are standard - they come with the job. When negotiating salary, it is best to talk about specific dollar figures.

On the other hand, if the salary offered by the employer does not meet your expectations, but you still want the job, you might try to negotiate for some benefits which are not considered standard.

These might include longer paid vacations, some flextime, and profit sharing.

Renegotiate the Future

In some cases you may want a job which does not meet your immediate salary expectations. The employer may not be able to add on special benefits to satisfy you. When this happens, you might ask the employer during the interview to reconsider your salary after six months on the job. Another approach is to ask the employer to consider expanding the job description or upgrading the position and salary. Such provisions would give you time to demonstrate your value. Employers have little to lose and much to gain by agreeing to such a provision. If other negotiating approaches fail, this one is at least worth trying.

Don't Expect Too Much

Many applicants have unrealistic salary expectations and exaggerated notions of their worth to potential employers. Some occupation all groups, such as postal and auto workers, appear overpaid for the type of skills they use and the quality of the work they produce. In recent years several unions began renegotiating contracts in a new direction --downwards. Unions gave back salary increases and benefits won in previous years in order to maintain job security in the face of deepening recessions. Workers in many industries were not in a position to further increase their salaries. Many employers believed salaries had become extremely inflated in relation to profits.

Such salaries, in turn, created even more inflated salary expectations among job hunters.

Given the declining power of unions, turbulent economic conditions, the increased prevalence of "give-back" schemes, and greater emphasis on productivity and performance in the workplace, many employers are reluctant to negotiate salaries upwards prior to seeing you perform in their organization. Especially in a tight job market, many employers feel they can maintain their ground on salary offers. After all, as more well-qualified candidates glut the job market, many are willing to take lower salaries.

Given this situation, you may find it increasingly difficult to negotiate better salaries with employers. You will need to stress your value more than ever. For example, if you think you are worth $30,000, will you be productive enough to generate $200,000 of business for the company to justify that amount? If you can't translate your salary expectations into dollars and cents profits for the employer, perhaps you should not be negotiating at all!
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