by Dawn Graham
Jan 8 2019
You have probably accepted at least a few job offers by this point in your career, but how often have you negotiated for a higher salary before taking the job? If your answer is “not often” or “never,” you’re not alone. Negotiating is tricky, and how much difference can that extra few thousand dollars make, anyway? The answer is, a hefty difference. According to one study, assuming an average annual pay increase of 5 percent, an employee whose starting yearly salary was $55,000 rather than $50,000 would earn an additional $600,000 or more over the course of a forty-year career. So clearly, it’s worth negotiating, every time—even when you’re switching careers.
Usually the biggest barrier to negotiating a higher salary isn’t “how,” it’s mustering the courage to do it. We can come up with seemingly rational reasons why it doesn’t make sense to negotiate. But as a hirer, when a candidate didn’t negotiate after I extended the offer, my first thought was, “I made a hiring mistake.” Talking about money can feel awkward, especially for Switchers, as I call those who are changing careers. But if you don’t ask for it, you don’t get it.
When I ask people why they settled for the initial offer, they tell me, “I was afraid they would renege on the offer” or “I was pretty happy with the first offer.” In my many years of coaching, I’ve never heard of a case where an offer was taken off the table because someone politely asked for flexibility. And, even if the initial offer is more than you expected, would you (or your partner or kids) be less happy if you earned 10 percent more each month or had an extra week of vacation? Um, no.
After a long search, it’s understandable why you might say yes to the initial offer and be done with it, especially if it’s decent. But take a night to sleep on it and discuss it with a spouse or friend, because no job seeker can weigh all the possibilities in the moment, especially when emotions are high with the fantastic news. Maia, a double-Switcher who was offered a role, almost blurted out “Yes!” after her exhausting search. But she caught herself and asked for a day to review the offer with her family. She negotiated addi- tional vacation days, and was glad she remembered this advice! Discussing money can be uncomfortable. But isn’t ten minutes of discomfort worth several thousand dollars?
Beyond the financial gain, there are other reasons to negotiate. The salary discussion is your first opportunity to have a real conversation with your new boss. In the job, you’ll need his or her support in a variety of work situations. The salary negotiation is an early chance to see if your new manager will advocate for you, which is good to know up front. Negotiating likely will not distance you. It does the opposite: Having a difficult discussion and finding a mutual solution deepens the relationship. Also, in some fields, like sales, it can be detrimental not to negotiate. After all, negotiating and influencing are key skills in your new role, so if you skip them the hiring manager may be concerned.
As a Switcher, you may feel you’re not entitled to ask for more money. After all, you were lucky just to get the offer, right? Wrong. If you were offered the job, the company recognizes the value you bring and they want you to start the job excited and motivated. You may also be questioning your ability to perform the role as well as a traditional candidate. Don’t. While things may feel ambiguous now, six months into the job you’ll no doubt be fully up to speed and wondering why you were worried in the first place. Remember, all future raises, bonuses, and merit increases will be calculated as a percentage of your starting salary. It’s much harder to get a large bump in base pay once you are inside.
I’ll let you in on a little secret: Once a company makes an offer, they are in the hot seat, worrying you might not accept. The hiring manager has likely endured a long search as well, and wants this process to be over as much as you do. The hirer is already envisioning you on the team getting work done. So, you have a little leverage at this point. The tables have finally turned.
Negotiations don’t need to focus only on your paycheck. While you want to get your base pay as high as possible as a first step, many other aspects of a compensation package can be negotiated: extra vacation time, relocation dollars, a sign-on bonus, virtual work days, tuition reimbursement, parking costs, start date, association dues—the list goes on. Think about what is most meaningful to you or what would leave you with more money in your pocket at the end of each month. My friend Dan’s company agreed to pay his cellphone bill, leaving him with an additional $1,600 per year in his pocket.
Even when a hirer says, “This is our best offer,” you should still take a day or two to sleep on it. More often than not, you will think of something to negotiate. Dion negotiated a start date that was one week earlier so health benefits were covered for the month, a significant savings for his family. Laura negotiated a mid-year (off-cycle) performance review, which would come with a salary increase if she met the agreed-upon business goals.
There’s a lot of excellent negotiating advice available. You can find it in dozens of career books or online, so you don’t need me to tell you to the basics. Here’s a quick synopsis:
- Defer the in-depth salary discussion until after you have an official offer in hand.
- Research your market value and how to relay it to the employer based on what you bring to the role.
- Focus on your worth in the market, not what you personally want or need, or what you were making in the last position.
- Never accept an offer on the spot, even a seemingly great offer. There’s always something to negotiate.
- Negotiate directly with the hiring manager (vs. the headhunter or human resources).
- Be confident and respectful, not demanding or entitled.
- Don’t drag out the negotiations over multiple meetings. Know your negotiating points and alternative options so you can be efficient.
- Know your BATNA (best alternative to a negotiated agreement) and your walk away number.
All these steps are important. Just add this one vital strategy: Go into the negotiation meeting assuming positive intent on the part of the hiring manager. While it’s advisable to prepare your rationale (it will give you the confidence and data support you need), you’ll end up with a better outcome by going into the discussion expecting success. Hiring managers anticipate that you will negotiate. Unless your requests are completely unreasonable or presented as demands, managers likely will be happy to revise the offer if they’re able. Even if they can’t give you exactly what you want, ask if they can meet you in the middle.
While there’s always room to negotiate, that doesn’t mean that as a Switcher you’ll end up earning exactly what you’d like. In fact, de- pending on how big your career change and your skill-level in relation to the job, there’s a strong possibility that making a switch may mean accepting a lower salary, at least temporarily. Taking a salary hit is one of the major concerns Switchers struggle with in their decision making. While I wish I could reassure Switchers, “Of course your salary won’t decrease,” regrettably, whether you can stomach a pay cut is a consideration when deciding to change careers.
If you’re taking a significant step back in level or changing from an industry like banking to a nonprofit, a lower salary may be in- evitable. This is where your loss aversion tends to kick in and you ask yourself, “Is this really worth it?”
Consider all the factors. Think about the long-term payoff. Will taking a hit on salary in the short run enable you to leap ahead of your old salary in the longer run? Even if that’s not the case, it’s likely the monetary hit won’t be as painful as you envision. Research has shown that, although people aren’t very good at foreseeing how they will adjust to change, people “adapt more quickly and to a larger degree than we imagine.”
Keep the large view of a compensation package in mind. Look at the total compensation. You may not be losing as much as you think if they cover tuition reimbursement and your commute requires much less gas. It’s worth the extra effort to think creatively. Perhaps you have experiences that will add additional value. If your desktop publishing skills could save the company $5,000 annually on an external vendor, maybe they could add this amount to your salary when they hire you. Remember, if you don’t ask, the answer is always no.
Your new employer wants you to come on board motivated to dive in. Out of all the candidates, they chose you. A few thousand dollars may be negligible to them, but mean the world to you. So, take ten minutes to start off your next job with a win-win.
This excerpt is taken from Switchers by Dawn Graham Copyright © 2018 by Dawn Graham. Used by permission of HarperCollins Leadership. www.harpercollinsleadership.com. For more information, visit click here.