By Joyce E. A. Russell, Ph.D., Vice Dean, Robert H. Smith School of Business
People who do not negotiate for salary start behind their peers who do. With every raise predicated on the starting position, they could be paying for this error for a very long time. In fact, senior managers may assume a person making less money is less valuable or less capable so that person is less likely to be promoted. Also, if your compensation record is better than others, employers will assume your performance is better too. So, remember that your salary history sends a signal that profoundly affects your performance reviews, raises, and job offers for YEARS to come. But, don’t be alarmed – negotiating salary, while stressful, involves skills that you can and should learn. In fact, 80% of employers stated that the job applicant who negotiates in a professional manner would make the best impression on them compared to: applicants who just accept the first offer and applicants who use an overly aggressive style when negotiating. To help you out, here are my top tips for negotiating your salary:
- Get a written job offer before conducting any salary negotiations. Employers want YOU the most right after they have sent you a written offer. This is the time when you have the most leverage. Avoid negotiating during the interview process. It is not in your best interest.
- Avoid answering questions about your current or previous salary or salary expectations until you get a written offer. Even when you get an offer, avoid bringing up these issues. It is generally NOT in your best interest to report your previous or current salary. After all, you are completing an MBA to enhance your salary. So, if they ask these types of questions – try to deflect them as best as you can using something like - “Before we address those issues, can you tell me more about the job tasks and responsibilities…” OR “This job is really different from what I was previously doing so the salary from that job is really not relevant; I would love to hear more about the job responsibilities…”
- Conduct market research to determine your market value and what your salary should be. This is one of the most important things you can do. You will not know if their offer is a good one unless you have conducted market research. There are plenty of websites (e.g., payscale.com; glassdoor.com; salary.com) that can provide valuable information to you in helping you determine your worth.
- Establish your BATNA – your Best Alternative to a Negotiated Agreement. The most powerful weapon you have when negotiating salary is having a strong BATNA. This means – look for other offers that you can use as leverage. Try to get all your job offers around the same time.
- Set a MPP – a Maximum Plausible Position. Come up with a salary range and a MPP that makes sense. Doing research (e.g., market data) will help you determine what salary should be your target. Do not think about what you need (at the bottom level) to survive. Think instead of the top amount that you are aspiring to (that is realistic). Applicants with higher targets will generally be given higher salaries.
- After you receive the written offer, review it carefully. Thank them for the offer but do NOT answer “yes or no” regarding the offer until you have had time to think about it.
- If you decide you want to negotiate the offer, think about the top 2-3 things you really want to have changed in the offer (e.g., salary, start date, signing bonus, performance bonus, amount of vacation, etc). Focus on those first.
- Practice what you will say when calling them back to talk about the offer. Script it out – what you will say, what they may say, what you will say in response. Have someone practice with you. Practice enhances your self-confidence.
- Listen to what they say and ask questions using a nice tone and style. Ask questions to understand, not to be confrontational. “Can you help me understand how you arrived at that offer…” This style also provides you with information about their views which can be beneficial when you negotiate with them.
- Remember to consider non-monetary things (e.g., job title, location, start date, relocation, benefits, educational or professional development funds) to negotiate in addition to salary, especially if they are unable to give you everything you wanted in the salary.
- Be persistent. Just because they say “no” the first time does not mean it is hopeless. You can ask them “can you help me understand why that would be difficult to do” then say nothing (using silence). Use a nice tone and style when pushing back. Sometimes they have to check with someone else at the firm. Let them check. Ask if they need additional information from you.
- Don’t quibble over small things. Don’t fight with them over small differences in salary or perks.
- Once you decide to accept the offer, make sure the new offer is written. Then, send your letter of acceptance. If you turn them down, make sure to diplomatically do this since your reputation and that of your school is connected to how you treat them.
Remember, you may not get everything you want from a job negotiation; but you probably won’t get anything more or different if you don’t ask. You have to ask! In addition, your success in salary negotiations is all about how much you PREPARE and PRACTICE. So, take the time – it really is important.