I’ve always felt that one of the biggest things you can do to improve your lot in life is to negotiate a better salary before accepting a job.
Think about it… Not only will you earn more out of the gate, but your subsequent raises will also be based on this amount. That means that a bit of extra negotiation right now will compound as you get raises in the coming years.
Curious as to how much of an effect this could have?
Well… Researchers at George Mason University and Temple University found that newly hired workers in various industries that choose to negotiate their starting salary can get an extra $5k on average.
Projecting forward, an individual earning $55k instead of $50k, and receiving an average annual pay increase of 5% would earn an extra $600k over a 40 year career vs. a worker who didn’t negotiate.
I know, I know… 5% annual raises. In this day and age, many workers are lucky to get a raise at all, so perhaps that’s a bit generous. Then again, there’s no accommodation made for the possibly large raises associated with periodic promotions, etc. Thus, this may not be such a bad approximation.
And regardless of the details of the math, it’s impossible to ignore the fact that a higher starting salary will result in more earnings now and in the future. And, based on past experience, a higher starting salary is quite often easier to negotiate than a raise after you’ve already started work.
Of course, you don’t want to negotiate yourself out of a job, so it’s best to be careful and not be overly-demanding when looking for a bit more. But if you have some idea of the fair market value of a person with your qualifications in the position that you’re being considered for, you’re doing yourself a disservice if you settle for less.
Just be sure to account for other perks when considering what you’ve been offered, like retirement contributions and things of that sort. What may look like a more (or less) attractive salary could be offset by less (or more) attractive fringe benefits.
What about you? Do you have any salary negotiation success stories to share?