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Negotiating your salary is extremely crucial to unlocking a higher lifetime earnings. Despite the challenges in salary negotiation and the stress associated with it, you should know how to negotiate for a salary and learn what your role is worth.
Salary negotiation is often seen as an uncomfortable situation, so it is not surprising that a majority of people (57%) have never tried to negotiate for a higher salary. Women in particular are less likely to engage in it due to the social costs of negotiation, which does not help bridge the already existing gender pay gap.
Employees across the board tend to shy away from negotiation as they do not want to come across as arrogant or greedy, or risk disrupting the established workplace dynamics.
A study in the US found that an employee who negotiated an extra $5,000 from a starting salary of $50,000 to $55,000 would earn more than $600,000 over the course of their 40-year career. This figure does not include returns from potential investments, which could bring the number into the millions.
During annual salary review exercises, employers are likely to make a more conservative offer when giving their employees a raise. Their offers tend to be budget-conscious and calculated based on inflation, market averages and tenure.
However, their offer may be less than what they can actually give you, with the expectation that some employees may negotiate for more. If you can successfully negotiate and justify why you deserve it, your boss might just give you a higher salary to retain and motivate you.
5 tips on how to negotiate for a higher salary
One thing to note while negotiating is to remain cordial and reasonable. The salary negotiation process should be a collaboration, not a conflict. Threatening to leave if you don’t get what you want or bringing up another job offer will give the perception that you are a disloyal and fair-weathered employee. It also signals to your boss that your motivations are purely financial.
If you are ready to begin the process, here are five steps you can take for a fatter paycheck.
1. do research
Doing extensive research is the first step to negotiating a higher salary. Without doing so, you risk either being underpaid or looking too out of touch with reality by asking for a figure that’s well above the market rate. Looking up what others with your skills and experience are making not only enables you to gauge where you stand relative to your peers, but also provides a good benchmark to help you set your salary expectations.
To find out how much you are worth, you can use tools like our online Salary Guide. Alternatively, you can connect with a recruiter to find out how much companies are willing to pay for someone with your expertise and experience.
2. know what you want
Once you have done your research, you should have a sense of the salary range you are looking for. However, if your boss asks about your expectations, we recommend giving a more precise figure instead of the broad range. Quoting a salary figure from the top of the range instead of the middle or bottom gives you enough wiggle room to negotiate down, which is something you should be prepared to do.
Some studies have also suggested that you should give an exact number as opposed to a rounded-off figure or a narrower range, as it gives the impression that you have done your homework and that you are ready for a proper negotiation process.
3. showcase your value as an employee
One thing you should do when negotiating for a higher salary is to be prepared to justify your request. It is likely that your boss will ask you why you think you deserve a raise and how you have calculated your expected pay. This is where preparation is key - you should go into the salary negotiation process armed with information that will help support your argument that you deserve more.
You can do so by highlighting your contributions and sharing positive feedback from your clients and peers. From the company’s perspective, your value is usually tied to the results you produce. Thus, when making your case, use quantitative values instead of general qualitative statements. Since you’re asking for an amount for your future contributions, you should also bring up ideas and plans for the future that will help the company reach its goals and demonstrate your ability as a forward-looking and valuable employee.
4. be confident
When negotiating for a higher salary, confidence is key. Despite it not being always true, people who are confident in their abilities are typically perceived to be more competent, which will clearly help when asking for a raise. Project your confidence by articulating your words carefully and being mindful of your body language.
You should also avoid apologising during the negotiation process. Remember, wanting to be paid what you are truly worth is nothing to be sorry about. Apologising for your expectations only gives the impression that you’re neither confident nor entirely convinced of your self-worth, which is not the message you want to convey about yourself when negotiating for a higher salary.
You may even want to wear darker-coloured clothing such as navy blue or dark grey, as these colours are often associated with strength and dependability.
5. establish your minimum acceptable salary
The final thing that you should be prepared for before starting your salary negotiation process is to have in mind the lowest number you’re willing to accept without wanting to quit your job. This number should be on the minimum salary threshold you have previously researched and one that you would not mind staying on with your current employer for.
However, divulging this number to your boss right at the beginning of the salary negotiation process is not the best idea. Let the process of negotiation bring the number down, but be bold enough to walk away if it dips below the minimum.
salary negotiation didn’t go as well as you hoped?
You’ve given it a go, but it may very well be out of your hands sometimes. If you didn’t manage to get a pay raise due to factors beyond your control such as the company having smaller budgets, know that walking away is always an option.
If you believe that you are being underpaid for your contributions and the value you bring to the table, then perhaps it is time to look for a more rewarding opportunity that comes with better incentives. Connect with Randstad today to see if there are any jobs out there for you with a company that can meet your salary expectations.