Episode 105

CAREER:

How to negotiate salary and job offers

I was shocked to learn that most people have never negotiated their salary for a new or existing job. Your success will be driven in large part by your ability to understand these business concepts, stand up for yourself, take control of your career and your financial future. In this episode, we will discuss the questions you will need to ask when you start the process, how to understand your value, and what to expect from the negotiation process.


Listen now:


I ask creatives all the time how many of them negotiated their salary for their current position. The shocking fact is that the majority have not and never have in any position.

It’s important to understand that negotiating your salary is a perfectly normal part of the employment process. I would go a step further and say that your success is going to be driven in large part by your ability to understand the business, to take control of your career, to stand up for yourself and put yourself in positions to be successful in your work and financially. This has been true in my career and my work behind the scenes, the way I have changed the role before I would accept them, the way I negotiated my contracts, and more set the stage for the success in the years that followed.

In this episode, we will discuss the questions you need to ask, how to understand your value, and what to expect from the negotiation process.

The problem

I learned that you could negotiate your salary and even your position completely by mistake – or maybe by arrogance. The reason why many people don’t negotiate their salary comes back to long-standing problems I have been talking about.

Issues of confidence where many people do not feel they can or should negotiate because they are just thankful to get an offer and don’t see themselves as an equal in the process. They think that they will wait until they get the job and then once the company sees their value then they will start negotiating. But this means you are waiting for the moment when you have lost all of your leverage which is obviously a mistake.

Issues of lack of business acumen where many people do know understand the process or know how they should approach getting hired so they let the company hiring them to take the lead.

Why is this important?

It is about creating two equal sides at the start of this relationship.

When we don’t negotiate we take a subservient mindset right form the beginning. It also gives you a glimpse into how the other side treats their people.

People negotiate when they care about something. Helps you understand what it is going to be like to work with that company.

Before you start

Be confident in your approach and delivery
It’s extremely important to put on your game face when the moment comes for negotiation. Bring confidence to the delivery of your talks and in the negotiations that follow. You are an equal at the negotiating table. You are not weaker and they are not doing you a favor. This is business.

Practice your pitches at least once before the actual negotiation
Find someone to listen to your proposal for a salary increase, so you can feel the cadence of your speaking points out loud in a conversational setting. Much of a successful negotiation boils down to feeling comfortable and practiced.

Understand the power of silence
Too often when you are negotiating and you are not confident you fill the silence with a lot of talking. You will say anything you shouldn’t that weaken your position. You will start to negotiate against yourself by offering compromises. In my experience, when you say a negotiating point or something difficult stay silent afterward. Let them speak first to respond.

Make sure you always let the other side know you are negotiating in good faith and do nothing to break that

What to expect

It is critical to know what this process is going to be like so you can be prepared and keep yourself in a position of power.

Build your case:
You will need to prove that you are worth investing in, with specific examples of the value you’ve given to employers in your career.

Face some resistance:
Even air-tight cases for a salary increase can face resistance, so be prepared to answer questions, especially, “Why do you deserve this salary?”

Strike a Balance Between Firm and Flexible:
Your salary negotiations won’t go well if you refuse to give any ground or say “yes” to a minimal salary increase. Be prepared to go back-and-forth during negotiations and be sure that any compromise reached is acceptable.

Opening questions

You have been through the hiring process and you love them and they love you so they make you an offer. Let’s start with going through some of the questions you need to ask when you start the process of negotiating. You want to do this to understand the boundaries of the negotiation but also to find out what is driving the other side.

“Can I negotiate this offer?”
It may seem obvious but all business are different so make sure to start off by asking if the offer is negotiable in the first place.

“Besides the base pay, what other benefits are negotiable?”
Many offers have multiple parts with a base salary, bonuses, stock and other benefits like medical insurance, support for education and training, paid leave, vacation time, moving expenses, and 401(k) contributions, etc.

“How did you calculate your numbers?”
By asking this question, you can start to understand their thinking, research, where you are in the salary band, and more.

“What’s the outlook for salary raises or promotions?”
Whether or not your salary offer is negotiable, it’s important to know what the future potential is for a raise or promotion.

“What metrics do you use to evaluate the success of this role?”
This is an important follow-up question to ask in salary negotiations and, if you end up working for the company, this information will help the next time you’re back at the negotiating table.

“Can I get the offer in writing?”
Verbally negotiation in great, but it doesn’t mean anything until it’s on paper.

Value, mentality, and leverage

They have made an offer and you have asked your questions how do you respond? Is it a good offer? A bad one? Do you even know? NEVER RESPOND when you first get the offer. Always say I need some time to think about this. You need to do some work and not look too eager. This may feel like you are going to die but you need to do it so you don’t show a position of weakness.

Do some research
Glassdoor, PayScale, Salary.com, and more are placed where you can see the average pay for a position, in a city. This arms you with knowledge and a benchmark

Have a salary range rather than a single figure:
When pressed for your salary requirements, you should always be sure to offer a range based on what others in the field are earning, rather than a single fixed number. Having an acceptable salary range helps you to negotiate and find compromise more easily.

Don’t Sell Yourself Short:
One common mistake when talking about previous salary is forgetting to include benefits as part of your total compensation. For example, if you are earning $100,000 a year with a 20% bonus plus health, dental and other incidental benefits, you should answer the question by saying, “$120,000 plus generous benefits.”

Understand your leverage:
Your negotiating power will vary depending on your current employment situation. For example, if you are unemployed and applying for work, expect to earn approximately what your old salary was or slightly less.

Never take the first offer

Your mentality will keep you in the right mind-frame and in a position of power.

The opening question will give you the rules and boundaries of the negotiations. Your research gives you a reference point to know you are making reasonable requests about your value. And you took some time to not respond immediately so you can have a level head when you respond.

My advice is never to take the first offer in a negotiation because the other side is trying to get you at the lowest price they can so they are going to start low or at a place where they think you will take the offer. But this is also why we ask the questions upfront so we know if we can negotiate or if the offer is the best and final one. For instance, when I would hire someone and would be on the other side of the process, if I wanted to hire them at 100k I would offer 90. Best case they take it and I save money and if not it gives me room to negotiate it so they feel like they got some even though I landed it where I wanted it.

Best resource

There are more techniques I could include here but I want to instead refer you to a far better resource and a far better expert for that. Once of the best investments you can ever make is going to Masterclass and spending the $90 to get access to Chris Voss’ The Art of Negotiation.

Former FBI lead hostage negotiator teaches you communication skills and strategies to help you get more of what you want every day. To understand how mirroring, labeling, bargaining, body language, trust based influence and much more. It is one of the best investments you can make in your career.

Chris Voss Teaches The Art of Negotiation
https://www.masterclass.com/classes/chris-voss-teaches-the-art-of-negotiation

Subscribe now

You can listen and subscribe now on Apple iTunes, Google Play MusiciHeartRadio, SpotifyPocket CastsStickerTuneIn and on all other major podcast platforms.

Join the community

Ask questions, suggest topics for future shows and connect with other Crazy One listeners. Check out the Facebook page.