5 Tips to Become an Expert Salary Negotiator
It’s been said that negotiating is like sex. Everybody can't be an expert! Most people vastly overestimate or underestimate their negotiating abilities. The good news is that negotiating is a skill that can be learned. Adopt these five tips, and radically change your results.
Tip 1: Plan a Win-Win
Companies have been known to take advantage of people in desperate situations. If a company underpays or overpays you, expect the job market to correct this mistake in the future. Job markets act like the stock markets constantly repricing undervalued and overvalued people. If you are an outstanding candidate, it is only a matter of time before a better company will come along and scoop you up!
Just as companies shouldn't take advantage of people, people would be well-advised against taking advantage of companies. The best way to increase your salary is to increase your market value by increasing your skills, your service, your education, your certifications, your sales. Don’t expect another company to increase it for you because convincing a company to give you more money than you are worth or more responsibility than you are qualified for is the fastest way to a pink slip. Please don’t expect a company to “make you a manager”. If your current company won't do that, why would you expect another company to take that gamble? Find a company who will promote you into that position when you have proven yourself.
Tip 2: Do Your Homework
If it’s on the internet, it must be true! Job titles are vague. Ask any expert engineer, accountant, or software developer if job titles are indicators of value. They will tell you that titles can be very misleading. If job titles are misleading, don’t reference a salary resource that oversimplifies based on a title. Misleading resources include Google, Salary.com and salary surveys.
Instead, talk to someone who understands the nuances of the market you intend to work in. Factors include supply and demand, location, responsibility (revenue, users, subordinates, etc), education (level and school), certifications, industry, your current reviews, commissions, clients. If possible, get an inside perspective by a friend who works at the company. A good recruiter can give you an idea of your market value.
Put yourself in the company's shoes. They probably aren’t going to pay you higher than everyone else on the team. Be ready to be creative. If you know for a fact that a company won’t be able to offer you an acceptable base salary, what else could you negotiate (extra vacation, sign-on bonus, six-month review, manager track, stock)?
Tip 3: Be Quiet
Have you ever seen Pawn Stars? A guy comes in with a Civil War cannon, and Rick looks him in the eye and says, “How much do you want for it?” There is a dead silence, but Rick doesn’t say a word. Rick would sit there for 15 minutes if necessary.
There is an advantage to gathering information instead of giving it. Companies love to ask, “How much are you looking for?” This is a dangerous question. It puts you in a bad place. If you answer too low (out of fear), you are stuck with this amount. If you answer too high (out of fear of guessing too low), you are shown the door. My recommendation is two words, “I’m open”. This is even more ideal when working with a good recruiter because the company will usually walk through the offer with the recruiter first. This gives you a chance to evaluate where you stand before the offer letter comes out. A recruiter may be able to provide other information such as how many candidates you are up against.
Tip 4: Be Ready to Walk Away
A negotiation by its very nature can go bad quickly. Decide on the front-end three categories: take it, think about it and turn it down. This is a sobering process. It makes you dig deep, decide what you are worth and when you walk away from the negotiation.
Understand that anytime you ask for more money than a company is offering, you run the risk that the company will rescind the offer. With this is in mind, if you get an offer in your “take it” category, don’t be foolish. Take it! Only negotiate when necessary.
Also, you are more likely to see an offer changed before the offer letter comes out. Once the letter has been signed off on, it takes an Act of Congress to change it. A good recruiter will bring a negotiation to a head early.
Tip 5: Prepare for the Hardest Question: Why?
This one stumps 95% of my candidates. Why are you worth 10% more? Most of my overconfident negotiators pick arbitrary numbers out of a hat like they are playing a game. If you haven’t anticipated this question, you aren’t ready for a negotiation.
The right answer is, “I’m glad you asked”, with a smile on your face, followed by a presentation (visual is always a nice touch) of why you are so special, professional reviews and references. Speak in terms of results, money earned, time saved, patents, processes changed. Back up your assertions with facts and proof. Speak in “their language” not “your language”. Strike “I need” from your vocabulary. Instead use “We” as if you are already a part of the team.
Honestly, ask yourself this very valuable question. If I was the company, would I give me this? If the answer is no, or I don't know, then you have more work to do. In the world of negotiation, failing to plan is planning to fail, so do the legwork, make your case, and watch doors open for you.