Earn what you’re worth

What you need to know before you negotiate a new salary

Businessperson With Magnifier And Wallet

by Karen Adamedes

You’re going to be offered the job. Or at least you’re pretty sure you are going to be. You’re thrilled and picturing yourself in the big chair and doing whatever it is that you will be doing for this role.

But don’t break out the champagne and dancing shoes just yet.

There’s one more big hurdle that you have to get past before you’ll be in the position where you can accept the job even if it’s offered to you.

You need to negotiate your salary package. (Don’t panic!)

What you earn is important to your career for a whole lot of reasons, our earlier post ‘Why it’s important to earn what you’re worth’ talks about the impact how well you negotiate for yourself has on your credibility (not to mention how much money you make!).

And in ‘What’s negotiable in a salary package?’ we discussed what might be negotiable and the importance of understanding this so that you can make decisions about what is important to you and what you might be prepared to trade off – before you get into the fun and games of the negotiation itself.

Apart from knowing what you are able to negotiate you need to do even more background research before you start negotiating for your salary and benefits.

You need to know the benchmarks of the average remuneration packages for people in your job, your industry and in your organization.

There are lots of credible online recruitment sites where you can research your industry. Talk to people in your network: they’ll know. Most companies have a range or guidelines on what they’ll pay for a position based on an applicant’s skills and experience, not to mention negotiating ability. This kind of research is factual and based on data that is generally verifiable.

But there is another kind of research you can do as well.

Don’t just find out about the published data and guidelines. Find out what is really going on; what others who do the same role are paid, as well as people who do a similar role in another division of the same company, and people in similar positions in other organizations. And you shouldn’t just do this when you need to prepare for a salary negotiation – good preparation comes from continuously collecting this kind of data.

If you ask people will tell you.

Don’t be embarrassed about discussing numbers or afraid to ask questions.

When someone is telling you about their new job or promotion ask some questions and give them the chance to brag and you start collecting really good bench marking data! 

You don’t always need to ask direct questions. Probe to gather information: “That’s great news about the new job! Did they throw in a parking space with that? They did? Excellent. How do they pay the long-term incentive? Oh, right you’re not on the incentive. Sounds like you scored big!”

Without even asking the dollar question you can find out things like if your contact  has managed to get a parking space but isn’t on the long-term incentive. Once you have this type of information you can make some pretty accurate educated guesses about where this person is positioned and the likely value of their remuneration. File it away for later. People won’t necessarily tell each other exactly what salary someone else is on, or use it in an actual negotiation, but if your know some benchmarks and where roles fit in the scheme of things it will help you work out where to pitch yourself when the time is right.

The ‘official’ data you gather about remuneration ranges is of value, but the reality can often be quite different.

It’s not important what the company says it will pay, but rather what they are actually prepared to pay.

If your coffee shop research shows that the company pays people in your area 20% more than the ‘official’ going rate, this is much more important to know.

There is a chance that everyone is considered overpaid compared to the going rate. If that’s the case … you want to be overpaid, too!

In cases like this, there’s a fair chance that you will be successful if you pitch strongly for an amount higher than the official figure suggested to you.

Your likelihood of success increases greatly with the amount of information you have and how confidently you use it. Once you understand how this works (and it does) you will be in a much stronger position to negotiate for you!.

Career Tip To Go: Do your research and find out what companies say they will and actually do pay.

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Do you know what you should be paid for your job?

Close-up Of A Businesswoman Making Stack Of Coins

The data geeks over at PayScale have just released their 2016 Salary Negotiation Guide and asked me if I would let my readers know about it.

I checked it out and it has a good process for negotiating a salary: Research, Strategize and Negotiate – with a range of articles on each of these. These include advice from the PayScale team, combined with contributors including Elizabeth Weingarten from The New America Foundation, Lydia Dishman from FastCo, and Lisa Gates from SheNegotiates, just to name a few.

Some interesting points that the folks at Payscale have uncovered are:

Women holding an MBA degree seem to be struggling most with potential gender bias when it comes to salary negotiation. Of those who asked for a raise, only 48 percent of female MBA grads received the requested raise compared to 63 percent of male MBA grads. And, 21 percent of female MBA grads received no raise at all after requesting one, compared to 10 percent of male MBA grads.

Gen Y is far less likely to have asked for a raise and far more likely to be uncomfortable negotiating or worried about being perceived as pushy. Both likely stem from lack of experience. Baby Boomers, however, are more likely to say they didn’t negotiate for fear of losing their job, which could indicate a concern over age bias in the workplace.

English Language and Literature majors were most likely to say they had asked for a raise (51 percent), but amongst those who did not ask, they were most likely to say that the reason was because they were uncomfortable talking about salary (41 percent).

Women are more likely than men to state that they are uncomfortable negotiating salary – 31 percent vs. 23 percent – and that holds true even among C-level executives where 26 percent of female Chief Executives said they’re uncomfortable negotiating compared to 14 percent of male Chief Executives.

Less than half – 43 percent – of survey respondents have ever asked for a raise in their current field. For the 57 percent who have not asked, the reasons most often cited are:

  • My employer gave me a raise before I needed to ask for one (38 percent)
  • I’m uncomfortable negotiating salary (28 percent)
  • I didn’t want to be perceived as pushy (19 percent)

But the headline to remember is:

75% of people who ask for a raise get a raise.

The data provided in the salary report is for the United States – so may not be completely accurate for readers in other countries. I just ran a report for a job title based in Australia and it was pretty accurate (and the report generates without giving the answers to all the questions they ask).

This is another data point to gather to understand what your worth and get some more information about your current role or one that you are thinking about. Always good to know where you can gather some more intelligence!

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What can you negotiate in your salary package?

Working Notepad Bonus Salary Growth Success Promotion Concept

 

by Karen Adamedes

What you earn throughout your career is dictated by many things – your profession, the industry you work in, the career moves you make and how well and hard you negotiate your remuneration.

Particularly each time you move into a new role or company. Once you are working for an organization it can be challenging to negotiate more than the annual allocation for salary increases that has to be divided up between all employees.

When you are negotiating to start a new job though the time is right to maximize your return on investment. That is the knowledge, skills and experience you have for the best possible salary package.

This is the time to negotiate. Hard. And well. Regardless of what discipline or type of organization you select, the opportunity is there for you to negotiate the best deal you can.

The place to start is by understanding what is negotiable.

Numerous items and benefits can be part of remuneration negotiations, including:

  • salary
  • performance bonus
  • flexibility – working hours or remote working arrangements
  • club or association memberships
  • study assistance
  • tools of trade – like laptops, cell phones and smart phones
  • health cover
  • shares or stock options – although you may need to be reasonably senior for this to be an option, and
  • parking space – ditto.

This list is not exhaustive and only some of these things may be relevant for your organization. Your company may also offer other benefits like childcare or health club memberships.

Find out which of these apply to your role and organization. If your job is with a company you haven’t work for before – ask your contacts or Human Resources or use your knowledge of the market to make a best guess.

Once you know what your options are you can work out what is most important to you, what you might be prepared to trade off (e.g. some benefits for flexibility?) and what is acceptable to you.

If you have done enough research and know what the role is worth in the market you may well have a minimum position that you’ll say “thanks, but no thanks” if they don’t make a fair offer. You need to know what your walk away position is. If you go into a new role feeling ‘ripped off’ – it’s unlikely your experience in that role is going to be very positive. And even more unlikely that you’ll get the remuneration to an acceptable level with single digit percentage increases each year once you’re ‘in the system’.

If you don’t ask for what you want – your new manager/company is unlikely to offer it to you. Your new employer is not going to weigh up whether money or working from home or bonuses is more important to you. They don’t have anyway of knowing your level of flexibility. You need to work it out and then talk to them about it.

If you ask for what you want and they say no what have you lost? At the very least you have gained more information to make a decision. Or can position an alternative. For instance, if someone can’t quite get to the base salary you want maybe they can include more in a performance bonus or let you work at home a day a week. If they really want you for a job a hiring manager wants you to be happy when you start in the role.

But in order to have those kind of conversations you need to know the options of what you can ask for – and what you want – and what you will accept. The more you know the better empowered you will be to make decisions when you are in the midst of the negotiation.

And you never know what could happen…they might actually say yes to what you ask for.

Career Tip To Go:

Understand what’s negotiable when you’re negotiating your salary package! And what you want!

Once you know what’s negotiable you’re one step closer – but there’s more you need to know before you start haggling! Keep an eye out for the next Career Tips To Go post – What you need to know before negotiating a new salary.

Check out our earlier post Why it’s important to earn what you’re worth!

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Why it’s important to earn what you’re worth

Benefits Gain Profit Earning Income Business People Concept

by Karen Adamedes

Money. Yes, there’s that dirty little five-letter word.

It not only makes the world go round, it pays the bills, buys the food, dictates what type of house you live in, the vacations you can afford and, one day, what type of retirement you will enjoy. It is important for your lifestyle.

Unless you are independently wealthy or have significant expectations, there is a pretty reasonable chance that money is one of the main reasons you work.

If you must work, you may as well optimize the amount of money you make to support the lifestyle that is important to you.

However, there is another much more subtle reason why the money you earn is important to your career.

The business world tends to be incredibly hierarchical and the amount of remuneration that you are perceived to receive, establishes your importance on the career ladder.

Your perceived relative importance in an organization can impact how seriously you are taken and, consequently, your potential capability to do more senior jobs. If someone perceives that they are of higher value than you because they earn more or is on a better bonus structure, even if they are more junior in rank, they may dismiss what you say. You may have to struggle to have your ideas or directions taken seriously.

Salary and remuneration negotiations are critical not only to what you are paid, but also to your reputation and status.

Downplaying your monetary value diminishes you in the eyes of others, making it seem like you’re not as serious, tough, skilled (at negotiations, at least) or confident.

Learning how to put a dollar value on your worth and how to negotiate hard for yourself is a necessary career skill.

The good news is there is a lot you can do to make sure you earn what you’re worth. To positively impact what you earn, you can:

  • choose jobs and professions that pay well
  • be prepared to negotiate
  • learn the unwritten rules of salary negotiations
  • know when to negotiate
  • ask for what you want, and
  • don’t settle for less than you are worth.

If you increase your knowledge of these areas you may not make it to the top of the rich list, but you will be much more confident and better equipped to have the discussions that you need to have. The ‘they’ll notice how good I am and just pay me fairly’ approach strategy is prone to failure.

Career Tips To Go:

Appreciate that how much you’re paid is important to your career.

There’s a lot you can do to make sure you earn what you’re worth. Learn how.

Next post – “What can you negotiate?”

 

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