Negotiating salary can be nerve-wracking. But, negotiating salary for a job offer can be even more difficult. Many would choose not to risk upsetting a potential new employer by making ‘demands.’ In fact, it may seem unconventional to do so. A study by Fidelity Investments found that 58% of Americans accepted the initial offer without negotiating for their current job.
However, getting paid what you need is incredibly important too. Especially when you consider most people take jobs for financial benefits.
In this article, we’ll look at factors you should consider before negotiating salary on a new job offer.
Ready to get started? Read on to find out more…
Know your market value
It would help if you had an understanding of how much you’re worth. Your market value is what you bring to the table and how you can help your prospective employer. Ideally, you should know this before applying for jobs, as you can filter the job search by salary ranges. You can work out your market value by the following factors:
Experience
Unsurprisingly, the more experience you have, the more you should be worth. However, suppose you’re a fresh graduate. In that case, while you may have knowledge and qualifications, you may not yet have relevant work experience, which limits your ability to provide evidence of why you’re worth the extra salary. The importance of experience can be supported by a research study that Mckinsey carried out. They found that 40-43% of average lifetime earnings were correlated by experience.
Career trajectory is another crucial factor that falls into the category of experience. If you’ve previously held leadership roles or have knowledge of other business functions, this can help put you in a great position to negotiate higher pay. Therefore, the more experience you have, the more value you bring, which provides reasoning for additional salary. On the flip side, early career candidates are less likely to provide evidence of experience that would justify a salary increase.
Qualifications and Certifications
Another critical factor is what additional knowledge or expertise you bring through the form of qualifications. Education costs money; it’s an investment that you’ve made and, therefore, definitely translates into a higher market value compared to other job seekers. However, not all qualifications offer the same value. If you’re applying for a graduate position where everyone has the same qualifications, this reduces your value as you’re on a level playing field. Better grades and quality of college may, however, set you apart.
Current Salary Trends
Make sure you’re aware of your profession’s salary ranges. Luckily, you’re in the right place. Here at AveragePay, we have data that will highlight how much professionals are paid. This includes the lower and upper boundaries as well as the average. Make sure you check for your relevant profession. This will allow you to determine what pay range is suitable to request.
Read the room
This factor relates to your future employer. You need to be aware of their current circumstances and how your salary negotiation requests are likely to go down. There may be roadblocks that can affect your chances of negotiating salary. Consider the following:
Employers Budget
Take a look at the initial job advert to see the salary ranges that had been advertised. Compare this to the offer that you received. You can question this and request additional information if it falls short of the higher boundary. However, understanding an employer’s budget will allow you to understand what the chances of requesting a salary raise would be.
Competition
Take a look at the job application again. On LinkedIn and other job boards, they usually provide information on how many applications the job has received. Additionally, consider how the job interview process went. If there were multiple stages, this usually means there would have been numerous applicants. You can also ask directly to find out. The reason is that if candidates are pretty similar, you may risk pricing yourself out from the position by asking for higher pay.
Market Trends
This point combines both employers’ budgets and competition. However, external market trends can affect the likelihood of success in negotiating a raise for a new job offer. In a hard economy, there are budget cuts and lay-offs, which result in more people willing to work for less. If you’re going against the grain, the employer will feel they’re able to find other candidates.
In essence, it’s essential to have both self-awareness and external awareness to determine how successful your attempts at negotiating a raise will be.
Salary negotiation mistakes that might cost you your job offer
If you’ve decided that you’re in a good position to negotiate a salary on a new job offer successfully, it’s essential to do it right. Here are some mistakes and common pitfalls that you should avoid.
Not getting the offer in writing.
If you’ve successfully managed to negotiate a raise, make sure you have it in writing. The last thing you want is to receive your first month’s pay and not have the negotiated offer translated into the pay cheque. Therefore, before signing any contracts or offers, make sure that the salary is stated correctly. Additionally, with many businesses having multiple departments, you’ll need hard proof to ensure that you can resolve any issues.
Be realistic
While there is nothing wrong with wanting higher pay, ensure you’re not asking for too much. This is where being aware of industry standards and market trends can help. You don’t want to start negotiating with an utterly unrealistic salary range.
Declining a job offer without negotiation
If you’ve received a job offer, but the salary fell below your expectations, rather than discarding it, you definitely should entertain it. In fact, you’d be in a much better position. When a business makes a job offer, they’re essentially saying they need you. As you may already have another job, the ball would be in your court. So you could offer to negotiate, and if it fails, it won’t affect you. You may find that it may not work out, but in the future, if the business needs to rehire, they’ll already be aware of your expected salary and may be able to offer it then.
Accepting an offer too quickly
Another essential aspect to consider is what position you’re in before beginning salary negotiations. If you accept an initial offer, this will reduce your chances of negotiating later. If you’re unhappy with the offer or feel you could be worth more, then make sure to raise those concerns before accepting the offer.
Additionally, as job hiring generally takes much longer nowadays, it can put you in a better position. Not to mention the additional costs of hiring too. It would be in the hiring manager’s interest to have someone fill a gap in their team quickly and efficiently. Therefore if something like a pay issue is standing in their way, then they’re likely to bite the bullet and hope it pays off for them.
Not showing gratitude or excitement.
Another factor that is likely to shine a bad light is not showing gratitude for a job offer. If the employer feels you’re not enthusiastic or motivated, they may feel that you won’t put the effort in as required for their business. Therefore, whether on the phone or by email, make sure to say thank you and that you’re happy to be considered for the role. Of course, if the salary doesn’t meet your expectations, make sure to bring this up in a professional manner.
Can you lose a job offer by negotiating salary?
The short answer is yes. However, it also depends on other factors, as mentioned above. If you’re aware of things like budget and market trends, you’ll be able to determine your likelihood of success.
How do you negotiate salary without losing a job offer?
The big question! There are a few ways to ensure that you can negotiate without losing an offer.
Stay professional when negotiating.
This includes being respectful and courteous throughout the process. Whatever the initial offer was, make sure to say thank you and express gratitude, as mentioned previously. Whether you choose to do this through email, in person, or over the phone, the way you communicate is what will make the most difference. Simply asking if there is negotiation room for the salary will help you determine the possibility of being paid more money.
Tell the truth
Honesty is the best policy; as long as you can explain why you’re looking for more professionally and honestly, your request should be respected. Make sure to suggest what salary you’d like to earn and why!
Build your case
Ensure you use things like experience, qualifications, and overall market value to support why you’re deserving of a raise. This allows the business to understand where you’re coming from. This ensures they are aware that you’re not asking for a raise for the sake of it.
Factor in other benefits
Make sure to consider the other perks that the business may be offering and how they can make a difference. For example, if there are chances of remote working, this will mean less gas consumption in a month; however, you’ll need to then factor in any costs of staying home. If there are no remote working opportunities yet other companies offer this, it can be controversial to bring this up. However, asking for a raise to cover any losses is not completely unacceptable. The main thing is to have an open mind and attempt to come to an agreeable resolution for both parties.
Can negotiating salary for a new job backfire?
This depends on your personal circumstances. If you currently have a stable job, you’re better positioned to negotiate. However, if you need the job, then you can’t afford to risk losing the opportunity. However, being polite and asking if negotiation is possible will help you determine the best course of action without offending anybody. If the job offer is for a large company, then chances are you’ll be speaking with another employee as the hiring manager. They are much more likely to understand your thought process as they’ll likely have been in a similar position previously. Additionally, hiring managers will definitely know and understand salary expectations from their experience with job seekers.
Bottom Line
Negotiating a new job offer doesn’t need to be impossible or difficult. As the saying goes, you’ll never know unless you ask! As long as you’re not being unreasonable or unrealistic and ask respectfully, you’ll likely get a response that should help you figure out if there is room for negotiation. Additionally, if you ensure the negotiation process is handled correctly, you don’t need to risk having to lose a job offer. Instead, you may walk out with an increased salary!
We hope you enjoyed this article. For more information on pay ranges and other employment-related information, check out the rest of our site!