How to Negotiate Salary

Here are some of our favorite tips on how to negotiate salary. Negotiations are one of the trickiest parts of the hiring process. Even if the offer you receive is enticing, it’s always a good idea to have these conversations with a new company. In a lot of cases, it is much harder to negotiate salary increases when you are moving around within a company.

Research the company & understand the market

Before you even begin to have salary discussions know what the market pays for that type of position in your area. You’ll want to research the company as well. Organizations fall into three categories when it comes to salaries: market leaders, at market and below market. Google and Amazon tend to pay as market leaders, whereas non-profit organizations tend to pay below market. Glassdoor and PayScale are great resources to start doing some research. If you’re considering a job in a different location, be sure to use a cost of living calculator as well to get an understanding of the local area and ensure you’re able to maintain your current lifestyle.

Know your value and bottom line

If you’ve been in your current job for a long time and have been receiving a standard cost of living raises annually (between 1% and 5%), chances are you might be underpaid. During your salary negotiations, remember to mention additional training, certifications or education that you’ve gained while being employed. Employers often won’t increase your salary when you obtain certificates or complete a degree, but an outside company usually will take it into account.

Be confident & professional

The salary negotiation is not a win-lose proposition. These conversations need to be collaborative. Ultimately, both parties are trying to achieve the same goal; you as an employee. Work together to find a solution but keep emotions and feelings out of the discussions. Always assume positive intentions from the other side, but be assertive enough to know you’re boundaries. Sometimes it’s helpful to practice your negotiation tactics. Sound Interview Professionals can help with salary negotiation tactics during our interview coaching sessions.

Build a case

As you have these discussions, you need to be able to articulate precisely why you deserve more. I’ve seen negotiations go poorly when the applicant hasn’t provided a convincing case. Tell me about the value you add to the company and quantify it. There have been candidates in the past who try to negotiate based on their expenses, and while we can sympathize, I’m not going to give you a higher salary because you have a large student loan payment.

Provide a range (if asked)

More and more places are making it illegal to ask about past earnings during the hiring process. Instead, recruiters are asking about salary expectations. This tends to come early on in the process, sometimes even before the interview. They are trying to make sure that your expectations are within their approved range for the position. If you’re asked what your salary requirements are, it’s best to provide a range. If you’re asked to provide your salary expectations, always give a range. At the bottom of the range should be at least 5-10% more than you’re currently making and add 10-20% to get the top number. For example, if you’re bottom is $100,000, the top should be around $115,000. At the offer stage, you can then negotiate salary within the range that you’ve provided.

Start with the base

It’s in your best interest to negotiate salary before talking about signing bonuses or other allowances. Companies might try to offer a one-time signing bonus to bump up to your salary expectations. The base is significant because it makes everything else more valuable. It’s also the most difficult thing to move on. While signing bonuses are nice, they don’t compound year over year, and they don’t affect your retirement contributions. A higher base will lead to increased total compensation.

Salary Negotiation Comparison

Negotiate other benefits

Sometimes hiring managers aren’t able to move as much as you’d like on the salary due to budget constraints. Be sure to ask for information on healthcare benefits, vacation, sick time, paid holidays, and other benefits before you make a decision. Our clients are often surprised to learn that vacation time is negotiable. Organizations usually have policies that outline a set number of paid vacation days based on service, but if you are mid-career, chances are you can negotiate additional days. Make sure you know about all of the perks that the company offers including modified work schedules, telecommuting, paid parking, on-site gym or childcare, employee discounts, etc. before making your final decision. Take all of those things into consideration when you make your decision.

Be prepared to walk away

This one is hard. Sometimes you aren’t able to agree in the negotiations, and you have to walk away. Before you begin, know what your limits are and stick with them. If both parties can’t agree, then the job is not the best fit. Walking away from a job offer is challenging, and you might feel guilty, but you need to make the best decision for your situation. Stay positive and be sure not to burn any bridges with the company.

Benefits: Unlimited Vacation

Imagine, you’re interviewing at a company, and they tell you that they offer unlimited vacation benefits. Awesome, right?! Maybe, but first, you need to do your homework. While it’s been around for a while, it’s only offered by one to two percent of companies in the United States. Netflix, GE, LinkedIn and a fair number of small to mid-sized technology companies have these types of flexible vacation plans. In the case of Netflix, they don’t track vacation usage, but they expect the time away to be reasonable and ensure that employees still get their job done. At General Electric, around 43% of the US salaried workforce can take as much vacation, sick, and personal time off as needed without any tracking involved. Since GE’s policy only applies to a particular population, it could create quite a divide among the employees that work there.

Why offer Unlimited Vacation

Offering unlimited vacation can be a smart move for business. It’s no secret that Americans have less vacation than the majority of the world, and in 2016 an estimated 662 million vacation days were given up. An unlimited plan eliminates the administrative burden of tracking and monitoring of leave usage. The biggest benefit to employers is that it removes the financial responsibility to pay out unused days to employees who leave the company. Finally, It can be seen as a great perk for employees and is used to help stand out against competitors.

While in theory, an unlimited vacation policy might seem great, it could backfire. If you are considering a job somewhere that offers unlimited vacation, be sure to do your research and ask questions. Glassdoor can be helpful to see how current and past employees feel about the benefit. Some companies offer unlimited vacation but make it difficult to get time away from work. Others might have a culture that frowns upon taking time off, even though it’s available.

Questions to Ask

When you start asking questions about benefits, choose your timing carefully. It can be a big turn off to hiring managers when applicants ask lots of benefit questions during an interview. Typically, the best approach to is to wait until you get the job offer. Here’s a list of questions you can ask that will give you an idea of how the benefit works at a company:

What are the parameters around the vacation policy?

How many days do employees typically take off each year?

What is the approval process like and how far in advance should requests be made?

What holidays does the company recognize?

How do you measure performance?

Company Culture

You also want to take into account what you know about the company culture. Anytime you are on site for an interview take note of the way the team interacts in the workplace. Often, it’s easier to get a feel for the culture from potential peers than from hiring managers, since they tend to speak a bit more freely about how they feel about certain topics. As you meet with hiring managers and peers through the interview process keep in mind the following:

Is the type of work you’ll be doing primarily independent or team-based?

Are you the only person who will be doing that kind of work?

Do people typically respond to emails at night or during weekends?

Are the leaders modeling the behavior and taking time away from the office?

The goal is to determine if employees make use of the unlimited vacation policies or if there’s a subculture that frowns upon it. Also, think about how the policy makes you feel. If you worry that you won’t take a vacation because there’s not a set number of hours assigned, it might not be the best fit.

Ultimately, this should be one data point among many when deciding to accept a new job. You want to take into account the total compensation and benefits package and the kind of the work you’ll be doing. As long as you can see yourself happily at the company for at least two years, then go for it!