To quote the great American poet Kenny Rogers:
You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run
That advice can’t be better applied than when talking about salary negotiation. We’ve all been there. If you don’t negotiate salary every time you get a new job, you’re leaving money on the table. Although your future employer needs to minimize costs, they expect a new hire to negotiate for a higher salary – it demonstrates that they care about the opportunity.
Learn to negotiate and get paid fairly.
Know what works, what doesn’t, and what is disastrous. Make the next time you negotiate salary wildly successful.
When to hold ‘em
The first thing you need to know is to try to keep your mouth shut and let the other side of the table do the talking.
Remember this: whoever talks first loses, but closed mouths don’t get fed. You still need to ask for what you want at the right time, just not too soon and end up accidentally shooting yourself in the foot.
Imagine this scenario: you’re currently making $80K and you want to make $85-90K. If the company’s budgeted salary range was $100-120K then you just left a lot of money on the table.
When to fold ‘em
Hold onto your hats friends, it’s time for a little Social Science.
It’s important to know your limits. Know what your best option is if you don’t take this job offer.
In negotiation theory this is called your Reservation Price, or in our case Reservation Salary. Know when to walk away keeps you in control of negotiations.
If we listen to the theory, there are two other numbers you need to know:
- The highest salary at which you believe reasonably could be accepted. This is called the Aspiration Salary. AND . . .
- The point where you expect to actually come to an agreement. This is called the Expected Bargain Salary, or EBS, and it should be pretty close to market value.
Let’s look at how these numbers work visually:
Is it possible to know Expected Bargain Salary? Not exactly. However, you should take your best guess. Working with a recruiter can help you figure out EBS – it should be pretty close to your job’s market rate. Recruiters see a lot more of the job market than most.
When to walk away (from basic negotiation techniques)
Think Twice About Disclosing Your Current Salary
It isn’t always the best move unless you’re already making a ton of money and are moving for lifestyle reasons. It can bias your new employer to pay closer to your old salary. If you do disclose your current salary, doing so too early could scare them away – creating the impression that you’re only interested in money. Plus it’s more and more frequently becoming illegal.
Focus on Non-Financial Factors and Look for the Mutual Benefit in the Middle
There’s a tendency for these conversations to focus exclusively on compensation, even though that’s usually not what gives us lasting fulfillment with an employer. While salary is important, other aspects of a role can carry significant weight depending on your position.
Think About Leveraging Non Financial Elements
Career advancement, learning opportunities, mentorship, remote flexibility, and travel (more or less) should all be considered if compensation isn’t negotiable. Make the connection between the employer’s needs and the various aspects of the offer you’re negotiating if possible. For example, remote work could provide a quieter work environment, fewer distractions, and thus a more productive team-member.
They’re hiring your skills, so remind them of that during the negotiation process.
Know When to Run
Salary negotiation isn’t as scary as it seems. With a little preparation and planning you’ll be well armed to do well. Know your Reservation Salary, Aspiration Salary, and Expected Bargain Salary and you’ll never need to run from a negotiation.
If you’re gonna play the game, you gotta learn to play it right.