According to Salary.com, a leader in employer-reported compensation data, only 37% of job candidates always negotiate salary while 44 percent say they do so occasionally. More surprisingly, nearly one-fifth of people they surveyed never negotiate their salaries and only 12% of employees negotiate a raise during their annual review. How can this be possible when studies have shown an individual who fails to negotiate a first salary stands to miss out on more than $500,000 by age 60?
Of the people surveyed, 22% said they didn’t ask for more because they lacked the skills necessary, 18% said that negotiating was unpleasant, and more than 9% stated that they were not self-confident enough. Others indicated that they didn’t want to come off as high maintenance or greedy.
Even though it can be stressful, negotiating your salary is the only way to make sure you don’t leave money on the table and, by the way, employers expect you to. Here are some suggestions for demystifying the process:
Do Your Homework
Unless you do your research, you will never know if your offer is fair and competitive. Do your homework before entering into a negotiation. Talk with former colleagues, venture capital investors, or check your professional organization to see if they publish recent salary surveys. Check sites like Salary.com, Indeed.com, or Glassdoor.com that extract salary data from various sources. The more you can make your case based on reliable, objective data, the more you come across as logical and fair.
Consider Total Compensation
Total compensation is more than base salary. Let’s say you’re leaving a company where your stock vests over time and where you earned a performance bonus. The unvested options, although not immediately saleable, represent future income and a performance bonus is also a form of remuneration. Don’t forget to consider all forms of compensation beyond the base salary.
Think about what’s paramount to you in a job, beyond just money. Do you want to work from home a few days a week? Is an additional week of vacation valuable? Often, you can get creative so don’t be afraid to include non-salaried items when you negotiate.
In the words of our mentee, “A negotiation is the first step in building a relationship with the new company. How you approach it and how they respond indicative of the relationship to come.” Focus the on the contributions you’ll make and reinforce the areas where you and the hiring manager are already in agreement. Focusing on the positive conveys an attitude of collaboration and flexibility.
Know When To Stop
A successful negotiation doesn’t mean that you will get everything you request. Go into the discussion with your priorities clear, and be willing to let some things go. (Do it in person when possible!) Remember that the tone you take in a negotiation sets the tone for your relationship with your new employer. Keep the long-term in mind as well as what you want in the short-term.