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You wrote a perfect resume and landed an interview. You aced the interview and got the job. You meet your future employer’s expectations, and now it is time to negotiate to make sure they meet your expectations!
One precursor to negotiation is to not disclose your desired salary earlier than the negotiation period. Many job applications will have a desired salary or salary range area on the form application. Entering “$000,000” or “$XXX,XXX” usually does the trick to get past these. If the question provides a long-form box, you can also write, “I am open to salary negotiations after discussing the position qualifications and expectations more thoroughly during the interview process.” In short, find a way to say you will talk about this later because you are not willing to reveal your salary number first.
Prior to salary negotiations, your salary and benefit expectations should be a mystery to your employer, perhaps with the exception of whether some workplace flexibilities will be allowed. However, you should know what your expectations are even before your first interview in case you end up entering a quick process where negotiations occur rapidly after your interview. Research industry average salaries, average salaries in your area with similar titles and experience, and add a bit extra for any skills you have beyond the job description. A lot of this research already happens when you are preparing to ace the interview, so take notes along the way and pull them out when it is time to negotiate!
You Must Negotiate
Your employer expects you to negotiate. To reiterate, because this is the most important part of this article:
Your employer EXPECTS you to negotiate.
That means if you do not negotiate, your soon-to-be employer will wonder if they made the wrong decision, if you are an overly desperate job seeker, if you truly have the skills listed on your resume. Yes, if you do not negotiate, your new employer will wonder what is wrong with you.
According to Ramit Sethi, “Negotiating is 90 percent about mindset and 10 percent about tactics. Most people don’t believe they should negotiate. They’re afraid of being ‘rude’ or having the employer rescind their offer. That almost never happens, especially because the company may have already spent up to $5,000 recruiting you. If you negotiate, you explicitly communicate that you value yourself more highly than the average employee. Are you average? If not, why would you settle for an average salary?” (Read Ramit Sethi’s book or check out his YouTube channel to learn more about the 10% of negotiating that involves tactics.)
Ramit Sethi is absolutely correct on this. Negotiating is mostly about mindset and the confidence you feel going into negotiations. While I was lucky enough to have a higher baseline of confidence than some of my peers going into interviews, I have noticed that confidence increases over time with experience, the knowledge that I am an in-demand employee in my industry, and the financial freedom to know that I would be financially fine if I pushed any negotiations too far. I would not have been able to create my ideal job, push it through so quickly, and negotiate a higher raise with my promotion without the gradual growth of this confidence.
If this is your first negotiation, you will not have that level of confidence. But you can raise your baseline confidence by preparing. If you know the industry averages and can explain why you add more value to a company than the “average” employee, you have a case to negotiate. The more facts you have going into a negotiation, the harder it is for your future employer to refute your request.
Why Negotiating Your Salary Impacts Everything
My most recent new-job salary offer was pretty fair for my level of experience and came with great benefits that I knew I could maximize. I only negotiated for a $5,000 increase. That sounds pretty small and not worthwhile to some. However, your starting salary with a company impacts absolutely everything going forward including:
Yearly or spot bonuses based on a percentage of salary
401(k) match programs based on percentage of salary
Annual raises based on percentage of salary
Promotions based on percentage of salary
For example, in just the first year, that small $5k difference was actually more than $5k:
The longer you stay with the same employer, the more this starting salary makes a difference. Say you stay with the same employer for ten years. If you receive a 5% bonus and receive a 7% 401(k) match, then you will net more than $70,000 more than if you did not negotiate for just $5,000 more initially:
Negotiating your starting salary impacts every single raise, bonus, and benefit you receive from your employer for as long as you stay with that employer (and gives you a stronger salary history for future employers). This initial negotiation can even bolster your confidence and inspire you to negotiate future promotions. When I went back to negotiate my most recent promotion, I felt insulted by the initial number I received and negotiated up to a number that would mean my employer was contributing five-figures to my 401(k) each year. That felt great. Negotiating will just encourage you to set new benchmarks for future negotiations.
Negotiating Benefits
Salary negotiations are not the only negotiations you can enter to improve your compensation at a new job. Negotiating benefits is also a great path, particularly if your future employer is under the constraints of a strict budget or contract and truly cannot exceed a certain salary threshold.
When you approach a salary negotiation, it is a great idea to list a sliding scale of salary and benefit combinations that would make you feel valued. For example, say you value leave as your most important benefit. You decide that you would feel happy with a $100,000 salary and 15–20 days of leave. If your employer only has the budget to provide you with a $90,000 salary but has room to provide you with 30 days of leave, that may make you feel similarly valued. Plus, from a purely financial standpoint, having more leave increases your hourly wage because you are working fewer hours!
While leave is a standard benefit to use for negotiations, you can negotiate any benefit you value. Other benefits to negotiate include education stipends for degrees or certifications, student loan reimbursement, and health and wellness reimbursement to cover gym memberships or other health expenses. You can get more creative as well: Employers may not be able to raise your salary due to a specific budget but may be able to donate $5,000 to a nonprofit organization of your choosing because that money comes from a different budget with tax exemptions. Figure out what combinations of benefits and salary make you feel valued and come to your negotiation with all the options.
Negotiating Flexibility
Negotiating workplace flexibilities, including work location and precise hours, is consistently increasing since March 2020 when many employees and employers were forced to recognize the many different schedules and locations that allowed work to get done. If you value working as a remote employee, working a four-day workweek, or other similar flexibilities, it may be worth taking a slight salary hit to maintain this flexibility.
Similar to benefits, you can go into negotiations with a list of combinations of salary, benefits, and flexibilities that will satisfy you. Maybe working remotely is non-negotiable for you like it was for Patrick. Maybe you would be willing to go into the office up to three days a week for a salary of $150,000 or more, but if your employer can only go up to $125,000, you would only go in once a week. There is no standard answer to these combinations since future workplace flexibilities are evolving daily right now. Just determine what is possible within your industry and communicate the workplace flexibilities that make you feel valued.
Only Say Yes When You Feel Valued
Your compensation package should make you feel valued before starting your new job. You want to be happy and excited for your new position. If you do not feel like you received a sufficient salary, the right benefits for you, and flexibility to allow you to produce your best work, the job may not be the right fit. Sure, you should have a few different options to offer your prospective employer, but if they cannot make any of them work, feel empowered to walk away. Even if you decide not to take the job, you will have one more negotiating experience to grow your confidence the next time.
When you do feel valued, say yes to the job. While fewer folks have this problem, the confident among us can have a tendency to make negotiating a game for the sake of negotiating. Set benchmarks for yourself based on a realistic reflection of your skills and value. Then go achieve them through negotiations.
Remember, your employer expects you to negotiate, and your initial negotiations impact your entire career trajectory with that employer. There are multiple ways to negotiate with an employer beyond salary. However you choose to negotiate, stay confident and know your value. Going into negotiations with preparation and confidence is the formula to a successful negotiation with a new employer!
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