Nobody Cares About You
Money doesn’t buy happiness, but I would much rather cry in a Ferrari. While I don’t agree with this statement in entirety (for example, I would rather cry in a Range Rover…with a Birkin bag in the passenger seat), it does represent, what I believe to be, a fundamental truth of personal finance. We certainly don’t need money to live a happy and fulfilling life, but, for many of us, especially in our twenties, a little extra cash, to help us live more comfortably, wouldn’t hurt.
Many of you have noticed that I have taken a hiatus from my blog posts. Some have taken an indirect approach to reminding me of this, such as a casual “Can’t wait to read your next post!” passed in conversation. Others have taken a more direct approach, such as daily phone calls to say “Blog Post. You. Now.” (Thanks, Mum!) Over the course of the past few weeks, my personal and professional life has been significantly more chaotic than usual…and it is usually pretty chaotic. Most notably, I received a big promotion that I have been working toward for some time. As with any new job, after the initial celebration and excitement, comes the slightly less fun salary conversation. This conversation got me thinking. For most of us, negotiating a salary, whether at a new company or in our current roles, is the fastest way to make more money. Our salaries in our twenties are much more important than one might, initially, think. Your current salary sets the bar both for potential raises with your current company and for your starting salary at future jobs with new companies. Pushing for just a $1000 or $2000 salary increase, today, can pay dividends over the course of your career.
Knowing this, I was shocked to learn, through conversations with friends, that the majority would accept a job without presenting a counter to the initial offer or would complete an annual review without discussing the potential of a raise. I imagine that all of my friends, even the highest earners, would welcome a bigger paycheck, so I have to assume that their reason for not negotiating salary is that they, simply, don’t know where to begin. While salary negotiation is certainly not up there with wine and Real Housewives in my list of favorite things, it is something that I feel comfortable with and have had proven success with over time.
The single best time to negotiate for a raise is when you are starting a new job. You have the most leverage then. The following tips have helped both myself, and those that I have coached, increase their initial offers by up to 33%. While the below advice focuses on new job offers, the same principles can be applied to promotions or annual reviews.
1 ) Are you average?
Success in salary negotiation is 95% about your perspective and 5% about tactics. Most people do not negotiate salary because they are afraid to be rude or to have the employer retract the job offer. Remember, the company has spent a lot of time and money recruiting you, in some cases up to $5,000. They want you just as badly, if not more, than you want them. Trust me, they are not going to rescind the offer. By negotiating a salary, you communicate to the employer that you value yourself more highly than an average employee. Are you average? Of course not. So why would you think to settle for the average salary offer?
2) Nobody cares about you.
One of the most common perceptions of millennials entering the workforce is that we are entitled and expect big rewards with little to no work. While the majority of twenty-somethings do not negotiate salary, those that do negotiate, often, make the mistake of framing their request in terms of how much they want to make. News flash: 9 times out of 10, the hiring manager does not care about you. The hiring manager cares about how you can make him or her look better and how you can help the company improve overall. Always frame your request in a way that shows how the company will benefit. Illustrate how much value you can add to the company. Tie your work experience and vision to the company’s strategy and goals. Highlight how you will make your manager’s life easier. In the long run, the company will make much more off of your work than they will pay you, so don’t shy away from asking for more.
3) Have another job offer.
In my experience, this has been, hands down, the most effective way to increase the initial offer. When you have another job prospect, your potential employers will have a newfound respect for your skills and experience. Interview with multiple companies at once. Be sure to let each company know when you get another job offer, but never reveal the exact amount of the offer. Best case scenario, two companies will end up in a bidding war over you, while you sit back with a cocktail, waiting for the offers to come in. Sounds pretty fabulous to me!
In addition, when applying for a job, never share your current salary. Why do companies ask you for this information? Answer: So they can offer you just a little bit more than what you are currently making. If you share your salary, you are making the first offer. Making the first offer is their job. When asked for your current salary or salary expectations, a good way to answer is “I’m excited about the opportunity to work with your company and I’m sure that we can find a number that works for both of us.”
4) Be prepared.
Don’t just pick a salary out of thin air. There are countless websites that provide a median salary amount for your position. Two of my favorites are www.payscale.com and www.glassdoor.com. In addition, if you know anyone who currently works at the company, ask what a target salary range for the job is. Before beginning the negotiation, determine the salary amount you would love, the amount you will realistically get and the amount that you will settle for.
5) Negotiate for more than money.
If, at the end of your negotiation, you have arrived at a dollar amount lower than what you desired, it’s time to think about total compensation. Ask the employer whether or not the company offers a bonus plan, stock options or flex commuting. Think about what you value and use each component as a lever. If you can pull one up, you can afford to settle for the lower base salary offer. Never ignore the importance of work-life balance or the value of total compensation, in favor of a slightly higher base salary. When I accepted an offer with my current company, I turned down a slightly higher base salary, but, in turn, negotiated for 3 additional weeks of vacation, an extremely generous merchandise discount and a significant bonus plan, among other benefits. Use these levers strategically. Offer to concede on something that you don’t care as much about, so that you can both come to a happy agreement. For example, I live within walking distance to my office, so I offered to concede on the option to telecommute, in favor of benefits that mattered more to me.
6) Practice makes perfect.
Colleges, career counselors, recruiters, you name it, have workshops for mock interviews. Surprisingly, I have never come across a similar workshop for salary negotiation. Approach your salary negotiation in the same way that you would approach an interview. Meet with a few friends, of differing personalities, and role play a salary negotiation. When you practice out loud, with a smile on your face (this is huge in negotiation!), you will be amazed at how quickly you improve. People often shy away from role playing interviews or negotiations because it feels “weird.” I guarantee you that it won’t feel so “weird” when you are walking around with an extra $10,000 in your pocket.
Initially, personal finance and salary negotiation are topics that may not seem to go hand in hand, but, I would argue that, with a little extra cash, all of our financial goals seem a little bit more achievable…and who doesn’t love that!? Never doubt the significance and importance of your salary in your twenties. It truly has the power to shape your earning potential for life. Please do not settle for less than you deserve and always remember to at least ask the question. The worst an employer can say is “No.”