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The art of salary negotiation is a touchy but crucial matter that rarely receives adequate attention. With all the economic certainty that we’ve been facing, many people have increasingly focused on reducing expenses and leading a frugal lifestyle. There are, however, two sides to the “spend less than you earn” coin…
When is the last time you stumbled across proper techniques for negotiating your salary and increasing your top line? While frugality is an important component of a healthy financial lifestyle, salary negotiation is also an important skill to master.
Think about how much time, money, and energy you’ve spent earning a college degree, sculpting the perfect resume, seeking employment, and interviewing for countless positions. Given this investment, why not spend a bit of time properly preparing to negotiate your pay?
Consider the following scenario…
You walk into a prospective employer’s office. You’re dressed to impress, portfolio and resume firmly in hand. You meet Mr. Employer, make some small talk, and answer the typical cheesy interview questions to ensure you’re the best candidate for the position. And then…
WHAM! You’re asked, “So… What sort of salary are you looking for?”
What do you do?
Rather than freeze and stumble around for the right number you should follow the first rule of salary negotiations which states: there is one time and only one time to discuss your salary expectations, and this IS NOT IT! Sidestep the question like your life depends on it!
Jack Chapman, leading career consultant and author of “Negotiating Your Salary: How to Make $1000 a Minute,” suggests two essential rules.
Two must-follow rules for salary negotiation
1. Discuss money only after they’re ready to hire you.
This rule applies to the Human Resources screening interview, as well as the main interview(s). Anytime someone asks something like “What is your current/previous salary?” or “How much do you want to make?” — dodge them.
Why? If your past salary was too low, you run the risk getting a lowball offer. Conversely, if it was too high, you might blow past what they’re willing to pay. A premature disclosure of your previous salary undermines your bargaining power.
FYI: Focusing on salary during the interview process is the employer’s way of getting the most competent person for the least amount of money. Don’t relinquish key information early in the process.
In order to evade the question, you need to respond confidently, but remember… There’s a fine line between confident and cocky — make sure you don’t cross it!
Here are a few examples of what to say:
- “I’m sure we can come to a good salary agreement if I’m the right person for the job, so let’s make sure I am!”
- “Well, so far the job seems to have the right amount of responsibility for me, and I’m sure you pay a fair salary, so let’s hold off on the salary talk until you know you want me. What other areas can we discuss?”
Do this for the first and second requests alike, but if they continue to probe, you’ll have to defuse the situation. If things get tense or awkward, try softening your statements with one of the following:
- “I get anxious when talking about money.”
- “When we discuss money, I’m afraid that I’ll be screened out or boxed in so could we hold off on that?”
- “I’ve noticed that we’ve come back to salary again. While I’m happy to talk about money, I’m not sure why we need to discuss it now.”
If this doesn’t work, and they insist that you divulge your salary requirements, you can cave in, but it’s not recommended.
Now that you’ve positioned yourself for optimal negotiation by side-stepping their requests, you’ll want to make sure you follow the second rule…
2. Make them go first!
Because you’re so awesome, the job offer is now on table and — if you exercised your skills from above — your salary requirements are still unknown. After the job has been offered, the salary talk could come next, last, or somewhere in between.
Regardless of when the topic comes up, as soon as Mr. Employer asks “How much would it take to get you to come aboard?” Do whatever you can to avoid answering with a number!
Instead… Make them go first! Once again, why would you want to risk being too high or too low. You never want to price yourself out of the job, nor do you want to undercut your true value.
Nine times out of ten, they’ll already have a budget set aside for the position. In most cases, it will actually be a range, and you want to land at the high end. At this point, your goal is to find out exactly what that range is!
Reply with one of the following:
- “I’m sure you have something budgeted for this position, what’s your range?”
- “I have an idea of the market, so let’s start with your range.”
If you can get them to divulge their range, then you have them exactly where you want them. As soon as you know your target, start giving them solid reasons why you should be near the top of the range. And remember… If they’ve offered you the job, chances are they think you belong there too!
One final strategy
I’ll leave you with the most surprising and unnatural yet most effective tactic:
For example: Let’s say they extend an offer, saying “We can offer you $XX,XXX/year and would like for you to start as soon as possible.”
What should you do?
NOTHING! Repeat the offer in a quizzical tone “$XX,XXX?” and sit in silence for 30 seconds or so. This could very likely make them squirm, wiggle, or feel uncomfortable enough to up the ante without your ever really responding to the first offer.
I actually gave this advice to my buddy Fred when he was on his way to an interview a few years back, and it worked! Fred was offered the job, but remained silent when the first number was given. He said that after about 10 seconds of silence, the prospective employer came back with, “Well, we could go higher if that isn’t going to work for you.”
Fred ended up getting $5,000/year more than originally offered! I’m still trying to get him to give me a cut of that since it was my advice that got him the money!
Remember… I’ve only highlighted a few of the most powerful concepts introduced in Chapman’s book. He actually covers much more, including how to get raises, and how to arm yourself with industry salary standards to justify the salary you deserve.
I highly recommend this book. It has empowered me tremendously, and I’m confident that it can do the same for you. It’s an easy read, and if you insist on working for other people, it will be a very helpful tool.
What are some of the salary negotiation tactics that have worked for you?
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