10 Tips to Ace Your Salary Negotiation
Asking for a pay rise or negotiating a higher salary for a new job can be extremely nerve-wracking. Very few people enjoy having difficult conversations, and for that reason, many of us put negotiations about money into the too-hard basket. This is a real shame because you are far less likely to get it if you don't ask. This issue impacts women in particular, as statistics show that they are less likely to negotiate their starting salary than men and are therefore playing catchup from that point onwards.
A successful salary negotiation early on in your career can make a massive difference to your lifetime earnings, with one study showing that a 25-year-old who's hired at $55,000 a year will make $634,000 more over their lifetime than a 25-year-old taken on at $50,000 a year. Remember that negotiating your salary is always an option.
A recent study showed that when women were informed that negotiation was a possibility, they were as likely as men to ask for a pay hike. But many assumed the option wasn't on the table until employers explicitly informed them. So, it's time to psych yourself up and have that conversation! Here are some tips and tricks that will increase the chance of landing an outcome that you and your boss are happy with.
1. Do Your Research
Before going in for a negotiation, it's essential to know what your role is worth on the broader market. You can use tools like the Careers New Zealand jobs database to check this out. Knowing the going rate will help you set the figure you want to ask if you are paid below the market value.
2. Build Your Case
If you ask for a raise or negotiate a higher starting salary, you need to be fully prepared to justify why you are worth more. It's not about time served, so focus on your performance rather than how long you've been at the organisation or how many years of experience you have in the field. Make a thorough list of your achievements, and back this up with evidence. This could email from satisfied customers and colleagues, evidence around successful projects you've been involved in, and tangible results you've achieved. You will need to sell yourself here and show how you've gone above and beyond.
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3. Practice Makes Perfect
If, like most people, you find negotiating and asserting your worth a bit of a challenge, make sure you rehearse what you want to say thoroughly. Practice in the mirror or with a friend or family member. Remember that there will most likely be some back and forth with your manager, and prepare for this too. Payscale.com has some handy tips on harnessing the negotiating power you already have but may not be aware of.
4. Request an In-Person Meeting
If you want to maximise your chances of successful salary negotiation, make sure that you devote the necessary time to the meeting itself. Request a special meeting with your manager rather than bringing the subject up in a regular meeting. Also, while many of us are working from home or flexibly these days, a face-to-face meeting is far preferable to a video call. Negotiations are complex interactions and will be more successful when you can read nonverbal cues. Up to 93% of our communication is done via body language and tone of voice, and being able to see someone in person is better than seeing them on a Zoom screen if you want to read the more subtle signals.
5. Time It Right
When it comes to asking for a raise, timing your approach wisely can be critical. Firstly, the time of year is important. It's a good idea to have the conversation while your company is still planning its budget for the year to come; before the end of March is generally best. Also, consider the company's current financial position. If times are tight, it's best to hold off on requesting a raise. Think about your manager's frame of mind too. If they face any professional or personal struggles, try to delay your request until things are on a more even keel.
6. Start High!
When setting a figure for your desired salary, it's a good idea to start as high as possible (within the reasonable limits of what your role is worth in the broader market). Remember that this is a negotiation, and there will be some back and forth. Putting a high figure out there, to begin with, will increase your chances of a more significant raise because you'll be harnessing the power of the 'anchoring effect'. This well-established phenomenon shows that the first thing mentioned in a discussion will 'anchor' the discussion and have a disproportionate influence over the direction and outcome of the conversation.
7. Keep It Positive
Positivity is a highly valued characteristic in the workplace. Employers prefer to hire and retain people who bring a can-do attitude into the office and contribute to a healthy culture. With that in mind, the last thing you want to do is bring negativity into the negotiation. Keep the conversation oriented toward your existing achievements and potential to make a positive difference to the organisation. Never issue a threat to walk out or look elsewhere for work if your request isn't granted. While you might feel that way, it will make your manager feel under siege. The same goes for comparing yourself to others in the organisation; speaking negatively about your colleagues is a major no-no.
8. Put Yourself In Your Manager's Shoes
The most successful negotiators are empathetic: they know how to put themselves in the mental space of the person they're negotiating with. Your manager likely has complex considerations to weigh up during the negotiation. Remember this, and handle the conversation with sensitivity as well as assertiveness. That said, don't overdo the warmth: a study from Harvard Business Review showed that being too warm and friendly in an economic negotiation can backfire, and a firm, decisive approach is more likely to get good results.
9. If You're Female, Beware The Gender Pay Gap
According to the Public Services Commission, the gender pay gap in New Zealand in 2020 was 9.5%. It's hugely important as a woman to know the market rate for the role you're going for to tell if the offer is low and negotiate upwards accordingly.
10. Prepare For a 'No' - What Are the Alternatives?
Sometimes there will be valid reasons for your manager being unable to agree to a raise. If this is the case, don't get emotional. Handling this conversation well and understanding your manager's situation and arguments will place you in good stead for future negotiations. And remember that if a pay rise is just not possible, there might be a non-financial alternative you could ask for extra leave days or work on projects that you're particularly interested in, for example. Extra cash is great, but so is exciting work and a healthy work-life balance.