The elephant in the room is out. You receive an initial offer from HR and are debating whether it is “worth” negotiating a higher salary. In this economy anything is better than nothing, right? WRONG. According to economics professor Dr. Linda Babcock at Carnegie Mellon University, “Failing to negotiate can be a mistake that reverberates for years. Because most raises are based on percentage increases, all of your future raises—along with contributions to your retirement account—are likely to be lower than if you had negotiated a raise at the start.” Avoid regret by mastering our Top 8 Business Etiquette Tips for Salary Negotiation. Where to begin? “You could typically ask for at least 10 percent more than they offer you,” says Babcock.
1) Negotiate only after a formal offer has been made. At this point, you can be certain that your potential employer is fully invested in bringing you onboard. The time between when you are given an offer and when you accept the offer is your prime window of opportunity for negotiation.
2) Express thanks and enthusiasm throughout the whole of negotiation. There is ample research supporting the social and cost benefits of gratitude (that is, those who say thank you receive more in return). The cornerstone of proper business etiquette, show your gratitude by saying, “I appreciate the opportunity to discuss my compensation with you, as well as your time and flexibility.” Proceed by reiterating your firm interest in the position and demonstrating a willingness to reach a satisfactory agreement.
3) Gather plenty salary intelligence, not only about your potential position but also about your own “market price.” Ask yourself, “What am I worth?” given your experience, skill set, education and potential value to the company. Also, be sure to research average annual salary range for the role, allowing sites like PayScale.com, Glassdoor.com and Salary.com to give you a benchmark figure. Finally, network with people who are in the company and/or industry, and ask what they think a good salary for this job would be.
4) Distinguish yourself from the pack. Having done your research on anticipated salary range, explain why you deserve to be on the upper end of that pay grade. What makes you a top performer compared to other employees? This is your edge, your leverage over others who may have similar credentials but make less money. For example, you might want to say, “While I cannot speak for the other employees here, I can speak for myself and my capabilities. [Insert specific, real-life examples to evidence your point]. It is my belief that I am uniquely qualified for this position, and that my compensation will reflect this in the fairest way possible.”
5) Overcome objections that take away your bargaining power. For example, “excuses” such as the poor economy or limited budget funding are outside of your control, making it difficult to dispute such a response. Financial advisor Ramit Sethi recommends countering obstacles by reverting the focus back to you (that is, communicating why you are an investment; why, in this case, money should not be an object).
6) Cover all bases not just annual salary. This includes bonuses, stock options, pension and insurance plans, relocation packages, upgraded working conditions and other perks that may act as sufficient supplements.
7) Fear not negotiation. Recent research has shown that only about 25 percent of job applicants attempt to negotiate a higher salary, in particular women and younger applicants. Nonetheless, employers agree that salary negotiation is as appropriate as it is expected, extending lower offers than feasible. Granted you maintain strong business etiquette and professionalism, you stand to lose quite a bit more by not negotiating up.
8) Keep the tone friendly and mutually cooperative. Core components of business etiquette (for example, body language, vocal tonality, professional presence) allow us to communicate in a way that is purposeful, effective and above all polite. Especially during salary negotiation, be aware of unsought tension. Monitor what you say carefully to ensure that requests sound reasonable and fair-minded. For instance,
- “It seems we’re pretty far apart number-wise; let’s work towards closing the gap.”
- “Please tell me how you arrived at that number so we can meet in the middle.” by Alicia Ventresca, MA in Developmental Psychology
To continue building your business etiquette vocabulary, see our previous blog on Resolving Conflict in the Workplace.