This is the second of two posts by Ryan Bonaparte on negotiating salary.
As we discussed in the first article, negotiating your starting salary (and all subsequent salaries) can be a huge factor in building long-term wealth. Even starting just a few thousand dollars more in the beginning of your career can net you an extra tens or hundreds of thousands of dollars.
But how do you successfully negotiate a salary, when after a long hunt you finally have a potential job that is hopefully better off than where you are now?
It’s actually a very simple process, made even easier with today’s tools and technologies. Below are some do’s and don’ts.
Know Market Rate for the Position
It can be tempting to go into an interview process dreaming of make tons of money. But if the role is a junior one, you should expect to be compensated accordingly.
Websites like Glassdoor or PayScale can get you a sense of what a position at a specific company in your area might be pay existing employees. Use these as guidelines for what to negotiate toward.
Don’t Take a Confrontational Attitude
Although movies make negotiations seem like an intense battle where one party wins and the other loses, in the job market, negotiations are just a fact of life. Companies expect potential employees to ask for a little more than the initial offer.
However, if you come from a place of positivity, while still being firm with your request, you’re much more likely to see a positive result than trying to get them to bend to your will. Win-wins are always more desirable, especially when negotiating salary.
Know When to Start Negotiating Salary
Although it might seem obvious, too many people start negotiating salary earlier in the process than they should. Negotiating salary should only start after an employer has given their offer of employment. Trying to negotiate before this event has two negative effects.
The first is that it makes you seem more interested in money than the actual job. The second is that in a negotiation the first number sets the stage for where the negotiating will start from. By waiting for the employer to put their number out, you can work up from that number, instead of down from where you want to start.
On the flip side, if you’ve already signed an offer letter, it’s too late to negotiate for more money. By signing the letter and accepting the offer, you have acknowledged that you are willing to start with the stated terms. By trying to back out after the fact, you have no negotiating power, and it comes across as very rude.
It Isn't Only About Money
Although the focus on building wealth is around making more money, there are other factors to keep in mind when evaluating a job offer.
From a purely financial standpoint, if a salary is lower than you’d like, but you can negotiate working from home a few times a week, that might save you more money than what a small increase in salary might do.
Additionally, some companies have certain guidelines for the maximum amount a position may earn, limiting what the hiring manager can offer. If they can be more flexible in other areas, that might be a win-win.
Explain Why You’re Asking for More
Simply asking for more money because you want it is not nearly as compelling as giving a reason. Whether it’s to cover commuting expenses, to compensate for responsibilities above and beyond the job role, or because the employer is offering below-market rates, go to the hiring manager with a genuine reason and you’ll see better results.
Negotiating salary can be a very stressful situation if you let it, but following these tips, you’ll be in a good position to have a smooth process. And remember, if they’ve already given you an offer, they know that you can do the job.
So relax, give a reasonable counteroffer and know that the worst thing they can say is “Sorry, what we offered is the best we can do.”
Ryan Bonaparte is a long-time writer and author, delving into topics including personal finance, technology, and career pursuits. He lives in the Boston area with his wife and fiercely independent cat.