Adriana Herrera, PayDestiny Founder

This How to Negotiate Salary: Ultimate Guide provides steps, scripts, tips, and more to maximize your pay.

For even more help to ace your salary negotiation click here.

How to Negotiate Salary: Ultimate Guide (2022)

by | Last updated Sep 24, 2022

How to Negotiate Salary (Icon)

Do you want to learn how to negotiate salary like a pro?

If so, you’re in the right place! This ultimate guide will teach you everything you need to know about negotiating your salary. You’ll learn what the salary negotiation process consists of, what you can negotiate in a job offer, and how to negotiate a higher salary. You’ll get sample salary negotiation scripts, the best answer for salary negotiation, learn tactics employers use in salary negotiations, and more!

By the end of this guide, you’ll also have answers to common salary negotiation questions like “How to ask to negotiate salary,” “How to negotiate salary offer,” “How to negotiate salary in an interview,” and “When not to negotiate salary.”

A salary negotiation can feel daunting, but with the right tools and strategies, it doesn’t have to be. With this guide, you’ll be able to confidently ask for more money and get the salary that you deserve.

If you’re ready to learn how to negotiate salary then bookmark this page and keep reading!

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How to Negotiate Salary (Fundamentals)

How to Negotiate Salary (Fundamentals)

To help you learn how to negotiate salary we first need to cover the fundamentals. In this section you’ll learn what is salary negotiation, when a salary negotiation can take place, employer salary negotiation personas, the salary negotiation process, what different types of employers are thinking and concerned about during a salary negotiation, and employer salary negotiation tactics. To have a successful salary negotiation outcome it’s critical to understand these fundamental elements of a salary negotiation.

What is salary negotiation?

A salary negotiation is a discussion between an employer and an employee about the employee’s salary. The conversation seeks to come to a mutual agreement regarding the value of the work to be performed. A salary negotiation can take place when
  • Interviewing for a new job  
  • An internal promotion is earned 
  • A salary adjustment is required due to being underpaid 
  • A salary adjustment is required due to formally or informally receiving new job duties and responsibilities 
  • A mid year review is performed 
  • An annual performance review is performed
  • Goals are consistently being surpassed 
A salary negotiation will involve a potential employee or employee and one or more of the following:
  • Recruiter 
  • Team Lead
  • Department Head
  • Human Resources Representative
  • Business Owner or Founder 
A salary negotiation will use various modes of communication especially when negotiating a new job offer where salary may be discussed with different company roles. A salary negotiation can take place:
  • In-person
  • Over email 
  • Over the phone 
  • Over video conference
  • Over text
In a salary negotiation, all parties will try to reach an agreement on the employee’s base pay and the variables that make up their total compensation or total rewards package. 

Salary Negotiation Terminology

An important part of learning how to negotiate salary is learning salary negotiation terminology. Understanding salary negotiation terminology helps you to be more confident and avoid costly salary negotiation mistakes that are the result of a misunderstanding.

Common salary negotiation terms include:

Since most employers who negotiate salary never received training on how to negotiate salary or training on their company’s salary negotiation terminology it is important to confirm the definition of a term used by an employer. This helps to ensure that as you negotiate you are both using terms in the same way.

What are salary expectations?

Salary expectations are the amount of money you are hoping to earn in a new position.

When interviewing for a new job or promotion your salary expectations should be set based on what companies at a similar stage are paying someone with your skills, education, experience, and track record of success to complete the job’s duties and responsibilities in your market or the market the company uses to benchmark salary.

When determining your salary expectations you should exclude incentive pay such as bonuses and commissions as they are not guaranteed. A salary expectation should be the minimum base pay you expect to earn.

Salary expectations can be asked:

  • On a job application
  • During a phone screen interview
  • During an interview for a new job
  • During an interview for an internal promotion
  • During a salary negotiation
  • In a conversation with a recruiter
  • When an employer is preparing to make a job offer

While it is critical to establish your salary expectations to determine if an offer is equitable for your experience it is important to avoid sharing your salary expectations to prevent setting a salary negotiation anchor that can result in a low offer.

Later in this guide we’ll dive into how to avoid sharing salary expectations and what to say to prevent hurting a positive salary negotiation outcome.

What is salary history?

Salary history is the amount of money you earned in previous positions. In many states, counties, and cities across the United States it is illegal to ask salary history in order to use the information as a benchmark of what a person will be paid.

In states where it is illegal to ask salary history questions it is often legal to use salary history information that is freely shared without the employer asking for it and/or available on social media.

Sharing salary history information in-person or online can hurt a salary negotiation. If you are asked for your salary history there are ways to professionally avoid sharing salary information. You’ll find this information in the Anchoring subsection of the Employer Salary Negotiation Tactics portion of this guide.

What is a salary adjustment?

A salary adjustment is a periodic increase in an employee’s pay. Salary adjustments are generally increases in pay that can be the result of the:

  • Company’s annual performance review processes
  • Company’s mid-year performance review processes
  • Company performing well
  • Employee being underpaid and advocating for equitable pay
  • Employee performing well
  • Employee and the company performing well

It is important to note that not all companies offer salary adjustments, not all employees are eligible for them, and not all salary adjustments will be the same.

The most commonly used language for a salary adjustment is “pay raise.” All of the examples above are pay raises however the phrase “pay raise” is not always the most appropriate language to use. Very few companies train employer roles on salary negotiation terminology. This can result in an employer misunderstanding terminology and negative interactions that are harmful to your pay.

Salary Adjustment Example

For example, let’s say you’re hired into a new position and negotiate a base pay of $70,000.00 per year. At the time you are hired another person with the exact same level of skills and experience is hired. You both start on the same day and receive the exact same training. 

After four months you are recognized for your performance and are given a salary increase of $8,000.00, now you’re making $78,000.00 per year. Your direct coworker who started on the same day as you is also given a pay increase of $4,525.00.

As you discuss and celebrate your pay increases you discover that their starting pay was $78,000.00 and that they are now earning $82,525.00. This makes you aware that you are underpaid in base pay and performance pay.

This prompts you to go to your boss and ask for a “pay raise.” They are surprised and put on the defensive because “You just received a pay raise.” Due to the lack of training employers receive on salary negotiations and employee compensation practices the term pay raise is generally associated with performance/merit raises. The use of the term pay raise when advocating for equitable pay isn’t the best to use and can negatively position the conversation.

If you find yourself negotiating salary because you are underpaid, replace the phrase “pay raise” with “salary adjustment” or “salary adjustment to close an ‘oversight’ in equitable pay.” This terminology positions the salary adjustment conversation to be about closing a wage gap rather than a perceived performance pay raise.

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What is total compensation?

Total compensation is always the sum value of an employee’s monetary benefits such as base pay, bonuses, commissions, overtime pay, and profit shares.

Depending on the company total compensation may be viewed as the sum value of direct and indirect monetary benefits. Direct monetary benefits are financial benefits such as wages, bonuses, commissions, overtime pay, profit shares, etc. Indirect monetary benefits are things like the value of a pension, retirement plan, and health insurance.

Some companies may also view total compensation as the sum value of direct and indirect monetary benefits plus the value of job perks such as office lunches, work from home stipends, gym memberships, etc.

When negotiating salary it’s important to clarify the company’s terminology and definitions. This ensures you and the employer are speaking about and negotiating the same thing.

What is total rewards?

Total rewards refers to the cumulative monetary, non-monetary, and incentive compensation received by an employee for the work performed.

Depending on the company, what it offers, the seniority of a position, and a job’s function a complete salary negotiation that negotiates all total rewards variables may include a negotiation of:

  • Career advancement opportunities (i.e. learning and development)
  • Commission
  • Equity/profit-share/stock options
  • Benefits
  • Job perks
  • Job title
  • Merit bonuses/bonus schedule
  • Signing bonus
  • Opportunities for meaningful recognition and advancement (i.e. clearly defined metrics that demonstrate success and a defined process to trigger promotions)
  • Other income impacting variables
  • Other variables that increase happiness at work and ability to be successful
  • Wages

To ensure money or career opportunity is not left on the table it is important to be aware of, and mindful that, a salary negotiation is not just a negotiation of base pay but all available variables that impact your household economics, your career advancement, and your day-to-day work-life happiness. In other words a salary negotiation is a negotiation of your total rewards.

What is total remuneration?

Total remuneration refers to the sum value of your total rewards regardless if you choose to benefit from available rewards or not. Total remuneration is the monetary value of the total available base pay, each benefit, each job perk, commissions, bonuses, overtime pay, etc.

For example, let’s say your company offers a $1500.00 annual stipend for continuous learning and development such as attending conferences and enrolling in courses and you choose not to use the stipend the $1,500.00 is still added into the sum of your total remuneration because the stipend is available and budgeted for you to use.

Total remuneration refers to the total value of your total rewards. It is a helpful value to use when comparing the financial value of multiple job opportunities.

What is a counteroffer?

A counteroffer is a response to an offer that is made by the other party. In a salary negotiation a counteroffer can be made by a potential hire or employee and the employer they are negotiating with. A counteroffer can encompass base pay, benefits, job perks, and/or other variables that make up total rewards.

As the potential hire or employee the goal of a counteroffer is to get the best possible deal for yourself while negotiating within or around company parameters such as standardized compensation processes (if they exist) and budget.

Salary negotiation research reports that on average one counteroffer increases an offer by 7.4% and that most employers expect a counteroffer and salary negotiation.

Unfortunately, despite the expectation of a salary negotiation 58% of people accept job offers without making a counteroffer or negotiating total rewards. This results in leaving upwards of a million dollars on the table over the course of a career.

One of the most important things to remember when learning how to negotiate salary is that you are not obligated to accept the first offer – no matter how competitive it is unless it’s presented as “best and final” or “non-negotiable.”

Salary Negotiation Formats

The two most common types of salary negotiation formats are:
  • Individual negotiations
  • Collective bargaining negotiations
Individual negotiations are the most common type of salary negotiation and the type of negotiation this guide is created for. In an individual negotiation the employer and the potential employee or employee speak, email, or text one-on-one regarding the job’s base pay and total rewards variables (benefits, job perks, other financial incentives like equity, etc). Depending on the job function of the employer the employer may negotiate on behalf of the company but need to get final approval on offers. In this case the individual is indirectly negotiating with two or more people, the employer and the final decision-maker. Collective bargaining negotiations are where a group of employees negotiate with their employer as a unit. This is typically done in a union format when a company is underpaying and overworking employees, when working conditions are not safe, and/or when benefits and total rewards packages do not meet the needs of employees.

What can you negotiate in a job offer?

Many people think that the only thing you can negotiate in a job offer is your base pay, but there are actually many aspects of a job offer that can be negotiated.

In addition to your pay, some of the other things you can negotiate in a job offer include:

  • Access to projects that will grow specific skills you seek to develop
  • Adoption assistance
  • Career development plan
  • Childcare
  • Clothing stipend (e.g. The position requires you to participate in meetings where you have to wear a suit and you don’t have one)
  • Commission
  • Commuting costs
  • Co-working office space stipend
  • Eldercare
  • Equity
  • Equity vesting schedule and cliff
  • Flexible work hours
  • Four-day work week
  • Health and wellness benefits (e.g. Gym membership stipend and ergonomic work equipment)
  • Health insurance (e.g. You don’t need health insurance because you are covered under a partner, parent, or have a private plan, you can negotiate the employer’s cost for you to be added to the company’s health insurance plan to be added to your monthly pay)
  • Job title
  • Job perks (e.g. Office lunches and massages)
  • Long-term incentives (e.g. Stock refreshers units and/or profit share plan)
  • Long lunch breaks
  • Luggage stipend (e.g. The position requires a lot of travel and will wear out your personal luggage)
  • Menstrual leave
  • Merit bonuses
  • No meetings on certain days
  • Office with a window
  • Paid time off (e.g. Extra paid vacation days to do volunteer work)
  • Personal time off (Other than paid time off)
  • Professional development stipend (For things like conferences)
  • Relocation expenses
  • Remote work
  • Retirement benefits
  • Severance pay
  • Signing bonus
  • Skills development stipend (e.g. Public speaking training or a course to learn a new coding language)
  • Time off to give back to your community
  • Tuition reimbursement
  • Work from home stipend
  • Your start date
  • More!

What you can negotiate in a job offer depends on the stage of the company, the type of company, the resources available to the company, and who you negotiate with.

To ensure you are not leaving money on the table or variables that will contribute to your happiness with a company make sure to ask what job perks, benefits, and incentives the company offers.

What can limit a salary negotiation?

Not every salary negotiation will yield the same results. A friend who works at a different company but holds the same job title as you and performs the same duties and responsibilities may be able to negotiate a much higher base pay and total rewards due to variables that can limit a salary negotiation.

Being aware of possible salary negotiation limitations will help you to strategically think about a negotiation from the employer’s perspective.

Possible salary negotiation limitations include:

  • The type of company you are negotiating with and its growth stage, a non-profit organization versus a just funded venture-backed scaling tech startup versus a fundraising venture-backed scaling tech startup versus a publicly traded company will have different flexibility to negotiate base pay and total rewards
  • The job’s importance to the company
  • Standardized compensation practices (or the lack thereof) and how the company determines base pay and total rewards compensation
  • The market the company uses to establish base pay benchmarks, Tier 1 markets like New York City, NY and San Francisco, CA will garner higher base pay then Tier 2 markets like Phoenix, AZ and Detroit, MI
  • Budget available
  • Timing, the timing of your salary negotiation, where the company is in its growth cycle, and how the company is performing can influence an employer to be more generous or conservative with your compensation

We will dive further into salary negotiation limitations and how to negotiate past them in the How to Negotiate a Higher Salary section of this guide.

Negotiation Leverage

To increase the chances of a successful salary negotiation outcome you want to have salary negotiation leverage. Salary negotiation leverage is having something that the employer wants or needs such as hard to find expertise or that creates a sense of scarcity and urgency such as having competing offers. These things put you in a position to negotiate a higher salary. There are two types of salary negotiation leverage: hard and soft. Hard salary negotiation leverage is when you have an offer from another company. This is because the employer knows that if they don’t grant you the salary you want, there is a chance:
  • You will not accept their job offer and accept the competing offer resulting in them having to make an offer to a lesser qualified person
  • That they will have to start the hiring process all over again
  • You will accept a job offer from another employer resulting in them having to hire and train someone to replace you resulting in lost productivity and operational expenses (it can cost up to 6 – 9 months of an employee’s salary to hire and train a replacement)
A common example of soft salary negotiation leverage is when you have built up goodwill with your employer by performing well and ask for a merit based pay raise, a bonus structure, and/or other financial incentives. Your employer has first-hand knowledge of the ways you’ve added value. This puts you in a position of soft leverage. If you are performing well and ask for an increase in pay and your employer doesn’t increase your pay or compromise by providing other incentives they know there is a chance you will leave the company and:
  • They will have to spend time and money training someone new
  • Your leaving could cause other valuable employees to leave as well (talented people want to work with other talented people it’s not uncommon to come across groups of people that job hop together)
It is important to note that you can have both types of negotiation leverage at the same time. For example, if you have an offer from another company and you are also a valuable employee, you have a strong case for why you deserve a higher salary. Below are two examples of using salary negotiation leverage to negotiate higher pay.

Negotiation Leverage: Employed with Another Job Offer For a Similar Role (Example 1)

“Thank you for taking the time to meet with me! I really appreciate everything that you do to help me be successful here.

 

I want to share that I have been approached by another company about a job opportunity.

 

I love my job and have been focused on growing my career here. I really enjoy working with my team and have been working to be promoted to [Insert role].

 

The company that approached me is offering an increase in base pay and XYZ incentives and job perks. This surprised me because the offer is more than I am currently making and more than I am receiving in my total rewards package.

 

The offer caused me to research what the market is paying for someone fulfilling the duties and responsibilities of my position and who has generated similar achievements such as ABC.

 

I found that the market is currently paying $X for someone with my skills, experience, education, and track record of success.

 

I’m concerned that I’m underpaid. Is the company able to consider adjusting my salary to what the market is currently paying?”

In this example the employee has both hard and soft salary negotiation leverage. The hard salary negotiation leverage is the fact that they have been made an offer by another company. The soft salary negotiation leverage is their track record of success and achievements for the company as well as their gracious tone. It’s important to note that the employee does not demand the company match the salary or threaten to quit. Rather they directly but “softly” ask “Is the company able to consider adjusting my salary to what the market is currently paying?” This language is very unlikely to cause an employer to feel slighted or pressured or to place them on the defensive. The employer is likely to express their surprise and take a couple of days to consider the budget and check to see if a salary adjustment can be made (and that a salary adjustment is in fact warranted). It is very important to never lie and invent salary negotiation leverage or to use leverage in a salary negotiation that you are not willing to follow through on. If you are not willing to accept an offer you are leveraging in a salary negotiation you should not bring it up to your employer. Your employer may not be willing to increase your compensation or may not be able to increase your compensation despite wanting to. In both cases, they may immediately accept the fact that you are taking the other job (since you brought it up) and start making plans for your replacement. If you do not take the job you leveraged in your negotiation and are not granted any compensation increases your employer may become resentful that you are having other employment conversations.

Negotiation Leverage: Negotiating a New Job Offer (Example 2)

“Thank you for the job offer! I’m very excited by the possibility of starting as your new [Insert role].

 

I have been interviewing with other companies in the space and have received another offer that I am considering.

 

The offer better reflects that the market is currently paying for someone with my skills, experience, and track record of success to perform the job’s duties and responsibilities. Is there room to negotiate?”

In this example, the potential employee has hard salary negotiation leverage. They are using another job offer to position themselves to open a salary negotiation. You’ll notice that the potential employee does not give details on what the other company is offering. This is strategic as the employer may just match the offer or offer a little more when they have the potential to offer much more.

Salary Negotiation Process

One of the most intimidating things about trying to negotiate salary when you haven’t learned how to negotiate salary is going into a salary negotiation unprepared not because you didn’t care to prepare but because you don’t know how the salary negotiation process works.

For some, not knowing the salary negotiation process can be so intimidating that it results in not even trying to negotiate a job offer, a promotion with market rate pay, or advocating for a salary adjustment (i.e. pay raise) when underpaid or new job duties are assigned. This results in individuals leaving tens of thousands to over a million dollars on the table over the course of a career.

Most of us never learn about salary negotiation in school or college or are taught how to negotiate salary. Some Masters of Business (MBA) programs touch on salary negotiation but nowhere do we learn the salary negotiation process in detail.

The process to negotiate salary has been an unopened black box. Until now.

Below are detailed step-by-step bullet points that walk through the salary negotiation process from a potential hire or employee perspective.

If the bullet points feel overwhelming don’t be. Salary negotiation is a skill that anyone can learn like learning to ride a bike or drive a car. Just like learning to ride a bike or drive a car you have to become familiar with the process, learn the rules, and practice. Then, before you know it, negotiating salary will feel like something you’ve always known how to do.

To help you learn how to negotiate salary further on in this guide you’ll get more information on how to complete each bullet point. In addition, PayDestiny’s on-demand salary negotiation software makes each step in the salary negotiation process easy. We provide you everything you need to ace your salary negotiation and maximize your pay.

The salary negotiation process:

 

  • Learn and master the job description for the position you are negotiating in order to accurately research what the market is paying and to create a list of quantified achievements that communicate your track record of success in relation to the duties and responsibilities of the job
  • Perform market research to understand what the market is paying
  • Use your market research to set a competitive “moonshot” base pay goal you will negotiate for (this is base pay that reflects hyper-competitive pay for someone with your skills, education, experience, and track record of success completing the duties and responsibilities of the job)
  • Use your market research to set your must-have base pay minimum, benefits, and job perks (your must-haves are what you must have or you’ll walk away from the offer)
  • Establish your nice-to-have benefits and job perks (these are variables you are willing to compromise on)
  • Create a list of quantified personal achievements that communicate why you’re worth your “mootshot” base pay goal
  • Don’t share salary history or give specific salary expectations
  • Ask questions about the job (to ensure you negotiate the entire job)
  • Ask questions about resources available to complete job duties (you want to understand if you will have the tools to easily complete job duties and responsibilities or if you’ll have to work extra hours to compensate for the lack of tools and resources)
  • When you receive an offer ask where the offer fits in the position’s compa ratio scale
  • When you receive an offer ask questions about how the offer was created
  • Once you have information on where the offer fits on the compa ratio scale and how it was created ask for time to consider the offer and/or weigh the offer against other opportunities
  • Use information provided by the employer to compare their job offer to your research on what the market is paying and confirm or adjust your “mootshot” base pay goal, must-haves, and nice-to-haves
  • Practice opening a salary negotiation
  • Practice what you will say in a salary negotiation
  • Ask if the offer is negotiable
  • If the offer is negotiable be mindful of employer salary negotiation tactics, employer salary negotiation personas, and what is important to the employer based on their job function
  • Express gratitude throughout the negotiation
  • Make data-driven persuasive counteroffers using market data and personal performance data
  • Politely and professionally work to create alignment between the value of the work to be performed, your goals, and the company’s budget, resources, and compensation practices
  • If you come to a mutual agreement ensure all final agreed-to details (no matter how small) are written into your Employment Offer Letter
  • Regardless of the outcome send an email to the employer to thank them for working with you in the salary negotiation, make sure to leave a positive impression

Types of Salary Negotiation Data

Every successful salary negotiation is rooted in two types of data: market data and personal performance data. When you use market data and personal performance data in a salary negotiation you empower yourself to negotiate with objective details. This in turn boosts your confidence and credibility.

What is salary negotiation market data?

Salary negotiation market data is information about what similar positions in the same industry are being paid. This information is used to support your case for a higher salary.

Salary negotiation market data is data used by both the employee and employer to establish a fair market value for the work performed.

Market data points seek to conclude what companies at a similar stage are paying someone performing comparable job duties and responsibilities with comparable skills, experience, education, and track record of success.

There are two types of salary negotiation market data: primary and secondary.

Primary salary negotiation market data is information that you collect yourself. This could be through talking to people you know who work in similar positions or by doing your own online research.

Secondary salary negotiation market data is information that has already been collected by someone else, such as a survey or aggregated data from a HR-reported salary data bank or HR-salary benchmarking software tool (these two tools are typically only used by HR professionals as the subscriptions to use the tools are costly).

Having salary negotiation market data is helpful because it shows the employer that you have done your research and what you are asking for is objectively rooted in data.

Below are examples of how to use different types of salary negotiation market data in a salary negotiation.

Primary Salary Negotiation Market Data (Data Source: Asking People)

“I’m excited by the potential to join as your new [Insert job title]. Thank you for the offer.

 

After receiving the offer I spoke with several people who currently hold the title of [Insert Title], are at ABC seniority level, and are actively performing job duties that reflect the requirements of this position.

 

I found that the market is currently paying more than my offer.

 

A base pay of $Y equitably reflects what the market is paying for someone with my skills, experience, education, and track record of success performing the duties of this position.

 

If the company can come up to this I can confirm I can start on [Insert Date].”

Primary Salary Negotiation Market Data (Data Source: Doing Online Research)

“I’m excited by the potential to join as your new [Insert job title]. Thank you for the offer.

 

After receiving the offer I performed market research, I found that the average base pay for this position is higher than my offer.

 

A base pay of $Y equitably reflects what the market is paying for someone with my skills, experience, education, and track record of success performing the duties of this position.

 

If the company can come up to this I can confirm I can start on [Insert Date].”

Primary Salary Negotiation Market Data (Data Source: Referencing Salary Surveys)

“I’m excited by the potential to join as your new [Insert job title]. Thank you for the offer.

 

After receiving the offer I compared it to the most recent salary survey from XYZ, the average salary for this position is higher than my offer.

 

Based on my ABC achievements and experience a base pay of $Y equitably reflects what the market is paying for my skills, education, and track record of success.

 

If the company can come up to this I can confirm I can start on [Insert Date].”

What is salary negotiation personal performance data?

In a salary negotiation personal performance data is data that quantifies the historical achievements and contributions of an employee. It is information about your personal performance throughout your work history. This information is used to communicate to an employer:

  • Your successes as they relate to a position’s responsibilities
  • Your proven track record of success to build credibility
  • How your successes impact business objectives
  • Why you are worth the specific value you are negotiating for

Personal performance data is generated by you (the potential hire or employee) to clearly communicate your successes to an employer:

  • On resumes via the creation of resume bullet points
  • During a job interview for a new job
  • During a salary negotiation
  • During weekly one-on-one meetings with a team lead or boss to measure progress
  • During mid-year performance review
  • During promotion interviews
  • During an annual performance review

Personal performance data typically describes success by providing metrics on actions that impact a company’s bottom line, short-term goals, and/or long-term goals such as, but not limited to:

  • Task completion
  • Saved time
  • Saved money
  • Revenue generated
  • Increased customer satisfaction

Below are a couple of examples of personal performance data statements for a salary negotiation.

Personal Performance Data Statement (Example 1)

“This position requires meeting sales quotas. In my last position I surpassed quarterly sales quotas by an average of 21% and generated $1.35 Million in annual recurring revenue for the company by investing time in training and coaching my SDR to efficiently source and vet leads.”

Personal Performance Data Statement (Example 2)

“Our KPI for the year was to grow customer acquisition by 7% month-over-month.

 

I have exceeded that goal by 9%.

 

Over the last five months we have sustainably grown customer acquisition by 16% month-over-month and will hit a 20% month-over-month growth rate next quarter.

 

I did this by analyzing the lifetime value of every referral source, extracting the top performing channels, analyzing the customer journey for the top 10, and then using the data to optimize other customer acquisition referral source funnels for conversions.”

The personal performance data statements above use metrics and a few supplementary details to directly communicate:

  • How the data relates to the position
  • The impact and value of work done
  • Details regarding how success was achieved
  • Value to the company

Do you want help to create your own impressive list of accomplishments?

For step-by-step help create a FREE PayDestiny Achievement Bank today!

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Different Employer Roles You May Negotiate With and How Their Priorities Impact Your Salary Negotiation

A recruiter, team lead, department head, human resources representative, and business owner or founder all think about different things during a salary negotiation. This is because the priorities and goals of their role influence their salary negotiation perspective.

The job function of the employer role you negotiate with will directly impact how they negotiate with you and what may or may not be negotiable.

The five primary employer roles you may encounter in a salary negotiation include:

 

Recruiter

A recruiter is a professional who helps companies find and hire employees. Their primary function is to provide the company they work for a short list of qualified candidates. A recruiter may work for a company, or they may work for a staffing agency that provides employees to companies on a temporary or permanent basis. Their success is ultimately measured by how many qualified candidates they recruit.

A recruiter’s responsibilities will vary based on their seniority level and if they are an internal part of the company or third-party vendor. A recruiter’s responsibilities can include:

  • Sourcing candidates
  • Screening candidates
  • Conducting preliminary interviews
  • Extending job offers
  • Negotiating salaries

To qualify a candidate the recruiter will be given a set of parameters that they are required to use to screen candidates. Among the screening variables a recruiter has to check off is alignment between a candidate’s salary expectations and a defined salary range.

Depending on the recruiter you encounter they can help you maximize your pay or work to minimize your pay.

Recruiters can be helpful in that they:

  • Typically have a good understanding of the market rates for a position
  • Know what the company’s budget is for the position
  • Can help a candidate understand what the market rate is for their experience, education, skill set, and track record of success
  • Can help a candidate ask for the right amount of base pay
  • Can help facilitate communication between a candidate and company and ensure that both sides are able to express their needs and concerns to find mutual compensation alignment
  • May have an affinity for you and work to facilitate the best possible outcome on your behalf

Recruiters can be harmful in that they:

  • Are being paid by the company which creates a conflict of interest where the recruiter may try to get you to accept lower pay and not negotiate for total rewards benefits in order to save their employer money and make themselves look good
  • Ask salary expectation questions that seek to anchor you to a specific base pay without you understanding the job’s entire duties and responsibilities
  • May ghost you if you choose to hold off on answering salary expectation questions
  • Are not always forthcoming with budget information
  • May be biased (directly or implicitly) and not work hard to facilitate the best possible outcome on your behalf
  • May not be experienced or knowledgeable about salary negotiations, and may give you bad advice
  • May intentionally give you bad advice that benefits how their performance as a recruiter is viewed by the company

Generally if a recruiter is employed by a company as an internal member of their team they will function as a gatekeeper and point of contact. Once you check their candidate screening boxes they will move you through the company’s recruitment process during which you’ll typically have some level of a salary negotiation with a team lead and/or department head.

Team Lead

A team lead that is in charge of hiring for their team often has no training on how to hire and how to make compensation decisions. They are generally given a set of parameters to work within by the head of their department.

The team lead is looking to fill the role as soon as possible so they can move on to other projects. They want to make sure they don’t overspend the budget, but that they don’t let a great hire go because they didn’t make an appealing offer.

Typically, a team lead will have to get approval on any final negotiated offer as a result unless the person is a superstar they are less likely to offer hyper-competitive compensation because they have to make a case to their superiors to justify the offer.

Department Head

A department head that is in charge of hiring for their department or signing off on a team lead’s hire often has some training on how to hire and either sets the department’s compensation budget or greatly influences it.

Who is hired into their department and that person’s performance greatly reflects on their ability to hire and the success of their department. Consequently, a department head will want to avoid losing good talent to a competitor and may be more flexible in salary negotiations.

In general a department head will not want to drag out salary negotiations as they have many other duties and responsibilities that require their attention. Depending on their employer salary negotiation persona this can be beneficial or harmful to maximizing a final outcome.

As a department head they will tend to take pride in representing the company and will want to feel like they are getting a good deal that they can highlight in operational reports. This can result in a department head playing hardball in a salary negotiation and/or being open to creative salary negotiation compromises.

Human Resources Representative

Human resources (HR) representatives undergo training on how to hire and how to make compensation decisions according to local, state, and federal laws. They are usually in charge of setting and/or maintaining the company’s budget for base pay and total rewards.

While employees are taught that HR is “for them” HR is responsible for making sure a company is legally compliant in its employee hiring and retention processes and avoids lawsuits. As a result, HR representatives can be good to negotiate with in that they are the most informed as to what comprises the company’s total rewards. This information is beneficial to negotiating pay, benefits, perks, and work-life happiness.

HR representatives however tend to be less flexible to negotiate with as a whole as they work to standardize a company’s job families and compensation processes. This can result in not being able to negotiate variables like job title with them and receiving conservative or market rate offers as they need to be able to defend compensation decisions to company leadership and in extreme cases to legal representatives when there is a wage disparity lawsuit.

Business Owner or Founder

How a business owner or founder of a company negotiates salary will depend on:

  • The compensation culture they’ve established
  • The type of company
  • Where the company is in its growth cycle
  • The company’s current goals
  • How they answer the question “How sure am I that this person will help to achieve goals?”

Before considering the company’s compensation processes, budgets, restrictions, etc. Almost every business owner or founder will ask themselves “How sure am I that this person will help to achieve goals?” How they answer this question about you will greatly influence their salary negotiation behavior and decisions.

If a business owner or founder strongly believes you can help the company achieve its goals they may deviate from established standardized compensation processes to make hyper-competitive offers or use standardized processes to make competitive offers at the high end of the company’s compensation spectrum.

Negotiating with a business owner or founder allows for more flexibility in total rewards variables such as job title. A negotiation with a business owner or founder about a job title versus a negotiation with an HR representative about a job title can produce very different results.

If you ask an HR representative to negotiate a job title they may get annoyed and say “no” because changing a job title might “mess up” a personnel matrix, job families they’ve worked to standardize, or other details they oversee in their HR role.

In contrast, a business owner or founder of a company is more likely to say “yes.” This is because they are thinking about the big picture and your ability to excel in the completion of the job’s duties and responsibilities. The job title you perform the duties under, so long as it’s reasonable, is a minor detail in the scheme of things.

Unlike other job functions, perhaps with the exception of a C-suite department head, a business owner or founder thinks about the big picture when negotiating salary. The big picture includes, but is not limited to:

  • Hitting pressing short-term goals
  • Hitting long-term goals
  • The impact on cash flow
  • The ability to fundraise or bring in investors with you on the team
  • The ability to recruit and retain other employees that want to work with you
  • The publicity the company may receive by hiring you
  • How the company’s image may improve by hiring you
  • External factors like the economy

Negotiating salary with a business owner or founder can result in the most flexibility. It also results in the most accountability because they will be invested in how well you perform, especially if you are well compensated.

Generally if a business owner or founder or senior department head tells a HR representative they are making a competitive offer that deviates from compensation processes the HR team member may not push back at all (due to company hierarchy). Alternatively, if a recruiter or team lead tries to make a competitive offer that deviates from compensation processes the HR team member may veto the offer entirely.

Recruiters and team leads are at the mercy of HR teams that work to standardized compensation, job perks, and titles. Regardless of how much they may want to work with you to maximize your total rewards they may have their hands tied by HR.

When you negotiate salary, the role you negotiate with, its job function, and priorities will influence your outcome. If you have the ability to negotiate salary and total rewards with a C-suite executive of a company or a company business owner or founder over a representative of the HR team, recruiter, or team lead you’ll have more negotiation flexibility. This negotiation flexibility will benefit your final outcome.

The Type of Company You Negotiate with Influences Your Outcome

In addition to the job function of the person you negotiate with, the type of company and its operational structure will influence what you can negotiate and how much flexibility you have to negotiate.

Examples of types of companies include, but are not limited to:

  • Non-profit Organization
  • Small and Medium-sized Business (SMBs)
  • Privately Held Enterprise Business
  • Pre-seed Tech Startup
  • Seed Stage Tech Startup
  • Series A Tech Startup
  • Series B Tech Startup
  • Series C Tech Startup
  • Series D Tech Startup
  • Publicly Traded Enterprise Business
  • Publicly Traded Startup

Company types that generally have more flexibility to negotiate or that generally pay more for a position include:

  • Series A Tech Startup
  • Series B Tech Startup
  • Series C Tech Startup
  • Series D Tech Startup

For example, a survey of 2,839 remote developers found that developers at Series C and Series D startups earn an average of $145,000.00 which is 11.5% more than developers in the same role at publicly traded companies who earn an average of $130,000.00.

Company types that generally have less flexibility to negotiate or that generally pay less for a position include:

  • Non-profit Organizations
  • Small and Medium-sized Business (SMBs)
  • Pre-seed Tech Startup
  • Seed Stage Tech Startup
  • Publicly Traded Enterprise Business
  • Publicly Traded Startup

An emerging startup company competing for talent at the Series A to Series D funding rounds are much more likely to be flexible in their negotiations compared to a publicly traded tech company with thousands of employees.

A publicly traded tech company or late stage tech company preparing to go public will have standardized compensation practices. These practices result in less flexibility to negotiate.

Unlike fast scaling startup companies where operating in a deficit is often encouraged by investors, public companies and late stage companies preparing to go public have operations that look at profitability and the value of their stock. This results in the standardization of compensation practices and viewing employee costs as predictable costs.

These predictable costs are used to generate profit and loss reports for shareholders. Job offers from late stage tech companies and public companies will have some flexibility to negotiate but the flexibility is predictable and standardized.

Employer Salary Negotiation Personas

When you negotiate salary the person you negotiate with, regardless of their employer role, will have an employer salary negotiation persona.

An employer salary negotiation persona is the manner in which a decision-maker or decision-influencer negotiates. Depending on the company’s culture and salary negotiation practices the persona can be fluid and different depending on characteristics and traits (including things like job function and demographics) of the person they negotiate with or it can be static and be the same regardless of who they negotiate with.

An employer’s salary negotiation persona can benefit you or create challenges to overcome. In general, there are four types of employer salary negotiation personas you may encounter. They are employers that:

 

Employers That Makes Hyper-Competitive Offers

Everyone’s favorite type of employer to negotiate with is the one that is ambitious to hire and retain the best and makes hyper-competitive offers to do so. This type of employer typically has a high bar for who they employ and will make ultra appealing base pay and total rewards offers that are above what the market is offering.

Hyper-competitive offers are often given by companies going through a growth spurt. Once the company slows its scaling, employee offers tend to stabilize.

Employers that make hyper-competitive offers can be identified by:

  • Offers where base salary that is above the market average
  • Compensation packages loaded with benefits, job perks, and long-term incentives
  • Great signing bonuses
  • Negotiation flexibility (especially if your position is a specialized hard to fill role and/or if you have a highly desired track record of success)

The cons of companies that make hyper-competitive offers include:

  • Offers may not be standardized resulting in subjective offers that lead to wage gaps
  • Long-term implications that can result in being laid off (when companies underperform often the first people laid off are the employees that cost the company the most)

It’s important to note that unless an offer is presented as “best and final” or “non-negotiable” even a hyper-competitive offer may be negotiated and countered.

Employers That Are Fair

When negotiating salary you may come across employers that are fair. Employers that compensate employees fairly can be identified by:

  • The information they share with you about how compensation is calculated
  • An offer that reflects your market value
  • Their transparency in what is negotiable and what comprises an employee’s total rewards package
  • Transparent salary ranges and/or employee pay scales

When you negotiate base pay with an employer that is fair there may actually not be a negotiation at all. The employer may use a standardized formula to calculate your base pay. To generate inputs to calculate your base pay you may be asked questions and/or asked to perform skills assessments to determine your abilities.

When negotiating salary with an employer that compensates employees fairly, a negotiation is more about using information you provide and/or the results of skills assessments to calculate your compensation. These negotiations are formulaic and not subjective which results in equitable fair compensation.

Employers That Intentionally Make Low Offers

When negotiating salary you may come across an employer that intentionally and strategically seeks to lowball you. They may offer base pay lower than what the market is paying for your skills or less than what they’re willing to pay to set an anchor that gives the false perception of a “good” negotiation outcome. Reasons an employer may intentionally make you a low offer can include that they:
  • Are trying to save money because of budget constraints
  • Expect you to counteroffer and think it is wise to “play a salary negotiation game”
  • Have a biased perception of your value (either directly or implicitly)
  • Think you are desperate for a job
  • Think you are inexperienced
  • Want to get as much work out of you for as little as possible
An employer that may intentionally make low offers can be identified by:
  • Asking for salary history
  • Being brash
  • Being overly salesy
  • Pushing you to answer salary expectation questions when you have not learned about the job’s entire duties and responsibilities
  • Not providing information on how base pay is determined
  • Not providing information on what is negotiable
  • Not providing correct compensation information in a final Employee Offer Letter
If you encounter this type of employer, use data to readjust a low offer to what the market is paying for your skills. To readjust a low offer (prior to entering a salary negotiation) you must do your research, set your personal must-have base pay minimum (the amount you must be offered or you’ll walk away from the offer), and establish your non-negotiable items. Be aware it may be difficult, but not impossible, to find mutual alignment with this type of employer salary negotiation persona as they are intentionally trying to pay as little as possible. It’s also important to be aware that an employer that tries to take advantage and underpay you will likely use other practices to take advantage of you in other ways. This can result in an unpleasant work environment and/or a work culture that does not facilitate career growth. Salary negotiations can tell you a lot about the practices of a company. Leverage the information you gather in a salary negotiation and use your negotiation experience to assess how the company’s practices align with what you want out of an employer and work culture.

Employers That Are Uninformed

When negotiating salary on occasion you’ll come across an employer that is uninformed. An uninformed employer negotiating salary that has no training, guidance, and/or direction on how to negotiate salary may:
  • Ask questions that are illegal in your state, county, and/or city
  • Be brash
  • Be difficult to persuade
  • Be easy to persuade
  • Be less flexible to negotiate with as they may not want to have to get approval on an offer from their boss that brings attention to the fact that they do not know what they are doing
  • Be overconfident
  • Confuse salary negotiation and compensation terminology
  • Lack boundaries
  • Make conservative offers that don’t have to be justified to their boss
  • Make hyper-competitive offers
  • Not know what can be and/or should be negotiated
  • Over share information that is to your advantage
  • Use their (direct or implicit) biased perception of your value to influence an offer
  • Use their personal salary history as a referential baseline for what you should be paid
Uninformed employers are a wildcard. Their inexperience can be beneficial or harmful to your salary negotiation. They can be hard to identify because they often disguise their lack of salary negotiation training, guidance, and/or direction with false confidence that can give the perception that they know what they are doing. The tactics in this guide will empower you with tools and strategies to successfully negotiate your salary with an uninformed employer even if you are unable to identify them. Before we get into tactics you can use to have a successful salary negotiation let’s go over tactics used by employers in salary negotiations.

Employer Salary Negotiation Tactics

Employers regardless of their level of training on how to negotiate salary with an employee will use one or more of the following salary negotiation tactics in their negotiations:

 

 

Anchoring

Setting an anchor or anchoring in a salary negotiation typically refers to establishing a base pay value that will serve as the referential point throughout a salary negotiation.

Salary negotiation anchors can be set when:

  • A job applicant puts salary expectations in a resume
  • A job applicant enters desired salary on an application
  • An employer ask for salary history or salary expectations and a specific value is provided by a potential hire or employee
  • An employer makes a job offer
  • An employer uses internal company compensation information to establish salary history

Anchoring can be done directly or indirectly by the employer. An employer directly sets an anchor for base pay when they provide any type of salary range or make a specific offer. An employer indirectly sets the anchor for a salary negotiation when they influence a potential employee or employee to communicate salary history or salary expectations.

When an anchor is set using salary history or salary expectations the employer will strategically use the base pay value provided as their referential point. This will typically result in an offer lower than what the market is paying.

Below is an example of an employer setting a salary negotiation anchor using salary history.

Salary Negotiation Anchoring (Example 1)

An employer interviews a job applicant they are very interested in. Their budget to hire is $71,500.00 – $81,500.00.

The employer asks “What did you earn in your last position?”

The job applicant answers “I was paid $62,000.00 per year.”

The salary history data provided by the job applicant of $62,000.00 per year now serves as the anchor for the salary negotiation.

The employer now believes that they can offer the job applicant a low starting base pay of $71,500.00 and that it will be viewed as a good offer because it is 15.3% more than they were making. The employer also believes that even if the potential hire makes a counteroffer they will still be able to offer base pay on the lower end of their hiring budget because they can frame the offer as “generous” based on the anchor value rather than what the market is paying.

Below is an example of an employer setting a salary negotiation anchor using salary expectations.

Salary Negotiation Anchoring (Example 2)

An employer has a hiring budget of $98,000.00 – $118,000.00.

They ask a prospective hire “What are your salary expectations for this position?”

The prospective hire answers “$100,000.00+.”

Now the employer knows what base pay the prospective hire will be happy with. This provides an anchor for the employer. The anchor gives them the ability to make a lower offer based on salary expectation provided by the prospective hire, not based on what the prospective hire’s value is in the market. 

What to say to negotiate past an anchor set by sharing salary history or salary expectations:

If you set the salary negotiation anchor by sharing your salary history or salary expectations you can negotiate past the anchor by confirming that the offer is negotiable and saying something like:

Salary Negotiation Anchoring (Example to Negotiate Past Having Shared Salary History or Salary Expectations)

“Thank you for the offer.

 

I am excited at the possibility of starting as your new [Insert job title].

 

I researched what companies at a similar stage are paying someone with my skills, experience, education, and track record of success to perform the duties and responsibilities of this position.

 

The market is paying $X.

 

I’d love to be able to accept the offer.

 

If you can come up to this equitable market value I can get started on [Insert].”

The employer may respond by using framing or selective focus in an attempt to make you think the amount you researched and are asking for is too much.

Framing

Framing in a salary negotiation is when the employer tries to get you to think about the salary they are offering in a certain way. They may do this by:
  1. Comparing the salary they are offering to other jobs that pay less
  2. Comparing the salary they are offering to what your salary history/what you were previously paid
  3. Comparing the salary they are offering to a salary expectation you expressed
  4. Comparing the salary they are offering to an anchor such as salary history or the initial offer made not what you have countered or what the market is paying
  5. Trying to get you to think about the total rewards package and not just the base pay
  6. Trying to get you to think only about the base pay and not negotiate other total rewards variables
It is important to be aware of these frames so that you can counter them. Here are recommendations of what to say to negotiate salary past common frames:
  • Comparing the salary they are offering to other jobs that pay less:
    “After researching the market I have found that the current rate for this position by other companies at a similar stage is $X.”
  • Comparing the salary they are offering to what your previous job paid:
    “The job duties I performed previously are different from the job duties and responsibilities of this position. The comparison doesn’t reflect the duties and responsibilities of this job and what the market is paying. After researching the market I have found that the current rate for this position by other companies at a similar stage is $X.”
  • Comparing the salary they are offering to a salary expectation you expressed:
    “After thoroughly learning about the position’s job duties and responsibilities and using the information to research I found that companies at a similar stage as this one are paying $X for someone with my skills, experience, education, and track record of success.”
  • Comparing the salary they are offering to an anchor such as salary history or the initial offer made, not what you have countered or what the market is paying:
    “I’m excited by the prospect of getting started. The offer is X more than $Y however I used the information provided to me such as ABC to research what companies at a similar stage are paying. They are paying $Z for someone with my skills, experience, education, and track record of success. I’d like to work with you to agree on a number that reflects the fair market value. If you can come up to $Z, what the market is paying, I can commit to starting on [Insert date].”
  • Trying to get you to think about the total rewards package and not just the base pay:
    “Thank you for highlighting all of the benefits, job perks, and incentives in the offer. Using the information provided to me I’ve researched the base pay for companies at a similar stage as this one. A base pay of $X accurately reflects what the market is paying for someone with my skills, experience, education, and track record of success.”
  • Trying to get you to think only about the base pay and not negotiate other total rewards variables:
    “After researching the market I have found that the current rate for this position by other companies at a similar stage is $X and that their total rewards package includes Z benefits, Y job perks, and X incentives. Can you please share with me the value of the total rewards package and what is included in addition to the base pay?”
An employer may use any of the frames above or others in an attempt to get you to accept a base pay and/or total rewards package valued lower than what the market is paying for a person with your skills, education, experience, and track record of success. The most common types of framing used by employers are number 1 – 4. Let’s walk through an example of this…

Salary Negotiation Framing (Example)

The market in Los Angeles, CA, a Tier 1 market, is paying an average of $78,000.00 for an entry-level person fulfilling the duties and responsibilities of a position.

The potential hire shares that they have one year and 11 months of experience performing similar duties and responsibilities in Phoenix, AZ (a Tier 2 market) and were paid $70,500.00.

The Los Angeles, CA market is paying an average of $88,625.00 for someone with two years of experience and ABC skills, experiences, certifications, and track record of success.

The employer sets the anchor offer at $80,000.00 and frames the offer as a generous 13% increase over what they were making performing similar job duties in Phoenix, AZ. 

The framing highlights the difference between what they were making and the (low) offer made. The framing intentionally makes no mention of the difference between the offer and what the market is paying in Los Angeles, CA for someone with their experience, $88,625.00.

In this example, this framing can easily appeal to someone that did not research what the market is paying and knows the value of their experience in the Los Angeles, CA market.

To negotiate salary past this framing and make a counteroffer the potential hire could say something like…

Salary Negotiation Framing (Example to Negotiate Past Framing)

“Thank you for the offer. I’m excited for the opportunity to be the new X.

 

To ensure a base salary that reflects market rate I’ve researched what the Los Angeles, CA market is paying for someone with almost two years of experience.

 

A base salary of $88,625.00 is an equitable starting salary.

 

It represents what companies at a similar stage in Los Angeles are paying for someone with my skills, experience, and track record of success.

 

If you can come up to the average market rate I can commit to starting on [Insert date].”

Selective Focus

Selective focus in a salary negotiation is when the employer tries to get you to focus on only certain aspects of the job or compensation package. They may do this by:
  • Drawing your attention to the perks and benefits of the job
  • Focusing on the positive aspects of the job and downplaying the negative aspects
  • Focusing on their needs and not yours
Selective focus is similar to framing in that the employer is trying to get you to think about the job or compensation in a certain way. The difference is that with selective focus the employer is trying to get you to focus on certain aspects and isn’t framing (or comparing) them. Here are some recommendations of what to say to negotiate salary if you encounter a common instance of selective focus:  
  • Drawing your attention to the perks and benefits of the job:
    “I’m glad to hear about the perks and benefits. Can you tell me more about the base pay and how it’s determined?”
  • Focusing on the positive aspects of the job and downplaying the negative aspects:
    “I’ve heard that this company is great to work for. I’m curious, what are some of the challenges people in this role have faced?”
  • Focusing on their needs and not yours:
    “I understand that you need someone in this role who can start right away. I could start next week. What is the salary range for this position?”

Best Alternative to Negotiated Agreement (BATNA)

Best Alternative to Negotiated Agreement (BATNA) in a salary negotiation for an employer is when the employer compares your counteroffers to their best alternative if you are unable to come to a mutual agreement. BATNA’s are not shared with a potential hire or employee but are something the employer considers internally throughout the negotiation process.

BATNA: Negotiating a Potential New Job (Example 1)

In this example, you are in a salary negotiation for a potential new job and are negotiating for $12,500.00 more than the anchor the employer set.

The employer’s BATNA is hiring someone with similar experience for $12,500.00 less who they are 90% sure will accept their offer and happens to be someone they also like.

This BATNA works against you.

In this case the employer will likely state they are not able to meet your base pay needs and offer the job to the other person.

Common employer BATNA considerations for new job offer salary negotiations include but are not limited to:

 

  • Is there another qualified person in the recruitment pool they would be willing to extend the job offer to? And, what is that person’s likelihood of accepting the job?
  • If there is no one in the recruitment pool to extend the job to how much time and money would it cost to start and run the hiring process again?

BATNA: Negotiating a Salary Adjustment (Example 2)

In this example, you were hired five months ago alongside three other people. You all were hired with the same level of skills and experience. You discover that despite being hired at the same time with the same level of skill and experience you are underpaid by $7,800.00 compared to your colleagues. You schedule a time to meet with your employer to request a salary adjustment to increase your annual base by $7,800.00 to put your pay on par with what coworkers hired at the same time performing the same job duties and responsibilities as you earn. You also request an additional $3,250.00 ($7,800.00 divided by 12 months of the year times five) for five months of backpay in which you were not equitably paid compared to coworkers. In this situation your employer’s BATNA considerations may be:
  • Will it cost more than $11,050.00 (the sum of the annual pay increase plus five months of back pay) to hire and train someone to replace you?
  • Would a hired replacement be as productive as you?
  • What is the probability that you will bring about a wage discrimination lawsuit?
  • If you bring about a wage discrimination lawsuit how much will the lawsuit cost them even if you don’t win?
  • If you quit will your quitting likely result in others quitting? If so, how many people and what is the cost to hire and train people to replace them? Would hired replacements be as productive?
In this example the employer’s BATNA’s are more likely to be costly and could have legal consequences. They are in a weak negotiating position. It is better for them to come to an agreement with you and grant an equitable salary adjustment.

Common employer BATNA considerations for a negotiation between an employee and an employer for a salary adjustment include, but are not limited to:

  • What would the impact be on the company if you did not receive a salary adjustment and quit?
  • How much would it cost the company to hire and train to replace you versus adjusting your salary?

To increase your salary negotiation leverage when negotiating as an employee you can:

  • Highlight your experience in relation to the job description and how little training you would need in order to begin making an impact thus saving the company money on training and unproductive “new hire” time
  • Highlight quantified work history achievements that clearly communicate why you are worth what you are negotiating for

Understanding common employer salary negotiation tactics such as anchoring, framing, selective focus, and BATNA helps you to view a salary negotiation through their eyes. When you’re in a salary negotiation, consider the employer’s choice of words and see how they match up with these tactics so that you can strategically negotiate past them.

How to Negotiate Salary (Negotiation Preparation)

How to Negotiate Salary (Negotiation Preparation)

1. Learn and master the job description: A successful salary negotiation includes clearly communicating your experience performing the duties and responsibilities of a job description as well as skills that highlight your potential to excel in performing the duties and responsibilities of a job description (even if you’ve never done them). In order to be able to communicate your abilities, and value, in relation to the job description you must take time to learn and master the job description.

To master your job description take time to read the overview, duties, responsibilities, qualifications, and requirements. Break the job description into individual requirements so that you can relate your quantified achievements to them. Doing this will help you build talking points for your salary negotiation and boost your confidence to negotiate for competitive market rates.

2. Make a list of your quantified achievements: Use your knowledge of the job’s duties and requirements and your quantified personal performance data to make a list of quantified professional achievements that clearly communicate your ability to complete, and excel in, the job’s duties.

If you don’t have a log of quantified personal performance data you can reflect on your work history and build one. To do this effectively you want to quantify successes that relate to the job’s duties. To do this identify how success of each job duty and responsibilities is measured using a metric.

If the job description you’re negotiating includes “Overseeing client happiness and success” and you’ve successfully overseen “client happiness and success” your quantified achievement should communicate this using metrics.

For example…

Quantified Achievement Example

“In my last position as Account Manager I had 100% client retention and increased the average contract value by 328% I did this by automating personalized touch points that made my clients feel valued and streamlining team processes to remove bottlenecks which generated great outcomes resulting in happy clients that increased their contracts.”

The metrics of “100% client retention” and “increased the average contract value by 328%” clearly and directly communicate success.

To support a successful salary negotiation make a list of your quantified achievements as they relate to the duties and responsibilities of the job you are negotiating.

Do you want help to create your own impressive list of accomplishments?

Create a FREE PayDestiny account to create a log of your achievements using our fill-in-the-blank templates.

Deposit an Achievement

 

3. Ask questions: To efficiently and successfully negotiate salary you must first act like a detective and ask questions to find out how the company determines compensation, what is negotiable, and if there are duties and responsibilities you should be aware of that need to be included in your negotiation.

Examples of questions to ask prior to a salary negotiation include:

  • What is the company’s formula to determine compensation for this role?
  • What city does the company use to baseline/determine salary?
  • What is negotiable?
  • What does the company have budgeted?

Once you have mastered the job description and asked questions to ensure you know what is negotiable and that no job duties were left out of the job description you are ready to perform market research to know what the market is paying.

4. Know what the market is paying: Perform market research before you negotiate salary for a new job offer, promotion, performance review, salary adjustment, or other salary negotiation meeting. Find out what other people in your field with your experience, skills, and qualifications are making at a similar stage company.

When performing research, compare the base salary, equity (if offered), benefits, job perks, and potential for career advancement. To do this, look at the job descriptions:

  • Experience requirements
  • Skill requirements
  • Education/certification requirements
  • Duties and responsibilities
  • Compensation

Once you have a good idea of what other people in your field are making, you’ll be in a better position to negotiate your salary.

5. Schedule time for a focused discussion/negotiation: Once you’ve mastered the job description, quantified your achievements, asked questions, know what the market is paying for your skills, have received an offer, and have reviewed the offer you’re ready to schedule time for a focused discussion/salary negotiation.

To schedule time for a focused salary negotiation you must first ensure the offer is negotiable. If the offer is negotiable, request to schedule time to discuss the compensation and to ask “Does anyone else need to be included in the conversation?”

Typically for entry-level roles and mid-level roles where the job function isn’t viewed with high importance you’ll only negotiate with one person. Mid-level roles where the job function is viewed with high importance, senior-level roles, and C-suite roles may require a salary negotiation with multiple people, but not always.

Rather than accidentally have a decision-maker left out of the salary negotiation or have to rely on the person you’re negotiating with to correctly communicate what you say to another person, confirm who needs to be in the salary negotiation and schedule the salary negotiation at a time that works for everyone.

If you choose to send the request by email, clearly communicate what you want to discuss in the subject line and body of the email.

Communicating what you want to discuss and scheduling time for the discussion ensures the employer isn’t taken off guard. Taking an employer by surprise with a salary negotiation can result in placing them on the defensive, causing them to be annoyed, and/or having them rush through your negotiation all of which reduce the likelihood of a favorable outcome.

6. Never share salary history: In the United States 21 states have made it illegal for an employer to ask questions about salary history in order to use the data to benchmark what they will pay you. In states where it is not illegal it may be illegal in your city or county for every employee, businesses of a certain size, or employees of the federal government.

If asked for salary history it’s best to state something to the effect of…

Salary History Response (Example)

“In order to establish equitable compensation for this position it’s best that we look at what the market is paying for the duties and responsibilities.

 

In addition, it’s important to me to maintain the confidentiality of my former employer’s compensation practices.

 

I do not want to violate that confidentiality by disclosing their compensation information.

 

What do you currently have budgeted for the position?”

This statement makes it clear that you are looking for equitable compensation and will maintain company confidentiality for an employer. In addition, by asking a question about what the company has budgeted for the position you turn the conversation around and give yourself an opportunity to gather information to determine if you are willing to accept the position based on the salary range.

Employers that ask for salary history tend to be employers that intentionally make low offers. They want the data to use as an anchor to make an offer slightly above what you were making.

The practice of asking for salary history reveals a lot about the employer, their employer salary negotiation persona, and compensation practices.

Questions about salary history are generally irrelevant. It is very unlikely that you performed the exact same job duties and responsibilities in a previous role and that the company’s compensation practices are identical to the company you are negotiating with.

Even in the small chance that the job duties and responsibilities are identical and that the companies have the exact same compensation practices using salary history as a data point for future compensation results in the use of outdated data. This is because your salary history reflects what the market was paying for the skills, experience, and track record of success you had at the time you accepted the offer.

Since accepting the offer, and performing the duties and responsibilities of the job, you accrued new skills, experiences, and achievements. Your professional growth needs to be accounted for in all salary negotiations.

In the case that you publicly share salary history on social media an employer can legally use that information to set your base pay. Many companies are now using automated social media screening software to tap into a plethora of information on people, including posts about former employers and salary.

People frustrated with the wage gap who want to help others negotiate equitable salary and total rewards packages are posting their full compensation packages and salary history on social media. This action can backfire and can negatively impact earning potential.

When you make your salary history public employers can legally use it to benchmark future salary. This can result in lower compensation offers from new employers.

It’s best not to post salary history online in a format that can be associated with your name. If you choose to share salary history there are a number of Websites that collect self reported salary data from anonymous users to help other people benchmark a salary offer.

7. Know the company’s culture: Every company has a different culture when it comes to salary negotiations. Some companies use subjective negotiations while others use standardized formulas to calculate compensation. Use information from the questions you ask to understand the company’s salary negotiation culture. This information will help you to strategically plan for a successful outcome.

8. Know what you want: It’s important to know what you want before entering into any negotiation:

  • What is your market competitive “moonshot” salary goal?
  • What are your minimum base pay requirements?
  • What are your benefits and job perks must-haves in a job?
  • What are your benefits and job perks nice-to-haves?

Knowing the answers to these questions will help you be more confident and prepared when negotiating your salary.

Use data from your market research and your professional history to determine what you want. While you may feel inclined to factor in your personal financial needs, try not to. When personal finances enter the equation, it’s easy to get emotional and make decisions you may later regret. Instead, focus on what you’re worth in the market. If you’re not hitting financial goals, skill-up to increase your value (there are a number of free resources to help).

9. Know your WATNA: Your salary negotiation WATNA is your “Worst Alternative to a Negotiated Agreement.” In other words, what’s the worst possible outcome if you don’t reach the agreement you want in your negotiation?

Knowing the worst possible scenario, and being okay with it, helps to alleviate salary negotiation anxiety and build your confidence.

WATNA: Unemployed and Negotiating Salary (Example 1)

If you’re currently unemployed and concerned about paying bills, your salary negotiation WATNA might be accepting the job regardless of the pay so that you can pay bills knowing that you will keep looking for a job that pays you a competitive market rate and quit once you do.

WATNA: Unemployed and Negotiating Salary (Example 2)

If you’re currently unemployed and have ample savings, your salary negotiation WATNA might be walking away from the job offer and continuing your job search focusing on a securing position with a company that will pay you competitively.

WATNA: Employed and Negotiating Salary (Example 3)

If you’re employed, your salary negotiation WATNA might be staying at your current job, continuing to excel in your duties, starting to look for other higher paying job opportunities, securing a higher paying offer, and renegotiating with your employer using the leverage of a competitive offer which you will accept if your company doesn’t match or exceed it.

Your salary negotiation WATNA is dependent on your circumstance and what you’re willing to accept. Every person will have their own WATNA.

Prior to engaging in a salary negotiation, establish your WATNA. It will help you:

 

  • Determine how much you’re willing to compromise
  • Have courage and confidence to negotiate for what you want without fear of what happens if you don’t reach an agreement
10. Know your audience: The person or people you’re negotiating with will play a big role in how successful your negotiation is. Their job function, employer salary negotiation persona, and salary negotiation tactics all influence your outcome. You won’t be able to identify their employer salary negotiation persona or salary negotiation tactics until you’re actively in a salary negotiation. There are, however, things you can learn about the person or people you’ll negotiate with prior to your negotiation by using professional networking sites like LinkedIn to learn about them. Do your research and find out as much as you can about who you’ll be negotiating with. Researching and answering the questions below will help you understand what lens they may view the negotiation through, their priorities in the salary negotiation as they relate to their job function, and how well you are likely to be perceived by them at the onset of the negotiation. Questions to answer to help you know your audience prior to entering a salary negotiation:  
  • What is their title and role at the company?
  • What are they likely to be thinking about?
  • Do you have a relationship with them? If so, how can your relationship help or hurt your negotiation?
11. Be aware of potential bias: It is important to be aware that when you are negotiating compensation there is direct and implicit bias that can impact the results of your salary negotiation. For example, a Yale study of 30,000 workers found that on average the performance of women workers is rated higher than men’s but their potential is rated lower (despite the women having demonstrated their abilities in their work performance). What this study found is reflected in the increasing gender pay gap. In the last two years the wage gap for Asian, Pacific Islander, Black, Native, and Latina women* has increased:
  • In 2020 Asian American and Pacific Islander women were paid $0.87 for every dollar paid to a White male colleague doing the same job.
  • In 2021 Asian American and Pacific Islander women were paid $0.75 for every dollar paid to a White male colleague doing the same job.
  • In 2020 Black women were paid $0.63 for every dollar paid to a White male colleague doing the same job.
  • In 2021 Black women were paid $0.58 for every dollar paid to a White male colleague doing the same job.
  • In 2020 Native women were paid $0.63 for every dollar paid to a White male colleague doing the same job.
  • In 2021 Native women were paid $0.50 for every dollar paid to a White male colleague doing the same job.
  • In 2020 Latinas were paid $0.55 for every dollar paid to a White male colleague doing the same job.
  • In 2021 Latinas were paid $0.49 for every dollar paid to a White male colleague doing the same job.
Additionally, a false narrative and language that attempts to negate the existence of the gender wage gap has developed. Many people are saying the wage gap is not really a wage gap, that it is an “Opportunity Gap,” a gap in wages due to the types of jobs women do. Below is wage data from a report created by the National Women’s Law Center that details the base pay for White men and Latinas performing the same 10 essential front-line occupations. The data illustrates that the wage gap for women of color, in this case Latinas, is based on the perceived value of who performs work rather than the type of work performed. There is no “Opportunity Gap.” Pay data for 10 essential jobs performed by White men and Latinas:
  • Janitorial: On average White men earn, $16.83/hour, Latinas earn $10.19/hour
  • Child care: On average White men earn, $12.92/hour, Latinas earn $10.58/hour
  • Personal Care Aides, Home Health Aides, and Nursing Assistants: On average White men earn, $14.42/hour, Latinas earn $12.02/hour
  • Cashiers (Grocery): On average White men earn, $13.99/hour, Latinas earn $10.58/hour
  • Servers: On average White men earn, $13.46/hour, Latinas earn $10.10/hour
  • Cooks: On average White men earn, $11.06/hour, Latinas earn $9.62/hour
  • Retail Sales and Retail Cashiers: On average White men earn, $12.36/hour, Latinas earn $11.54/hour
  • Licensed Practical and Licensed Vocational Nurses: On average White men earn, $21.63/hour, Latinas earn $17.36/hour
  • Pre-K, K-12, and Special Education Teachers: On average White men earn, $27.40/hour, Latinas earn $21.63/hour
  • Retail Supervisor: On average White men earn, $24.04/hour, Latinas earn $15.48/hour
There is a plethora of research and data to support that women and underestimated Black and Latine professionals are statistically underpaid compared to White male colleagues with the same experience (or less) performing the same job duties. To increase the likelihood of a successful salary negotiation outcome it is important to be aware of potential biases in order to utilize tactics to negotiate around them.

12. Know what you’re going to say: Once you’ve done your research, have set your goals, know your must-haves, and who you’re negotiating with, prepare what you’re going to say to:

  • Open a salary negotiation
  • Make counteroffers
  • Clearly and persuasively communicate a data-driven case for competitive compensation

When preparing what you will say make sure to account for various scenarios. Prepare different points to make at different times in the negotiation. Once you prepare what you will say, practice what you will say so that it comes across friendly, confident, and clear.

13. Know when you’ll walk away: There will be times when the negotiation doesn’t go the way you wanted it to. Rather than put yourself in a place to make an emotional decision, intentionally think about when it is appropriate (if ever depending on your WATNA) for you to walk away from a deal/offer. Use your market research, information from the company, your must-haves, nice-to-haves, and WATNA to set parameters on when it’s appropriate, and in your best interest, to walk away entirely from the salary negotiation.

How to Negotiate Salary Offer

How to Negotiate Salary Offer | How to Negotiate Salary

Now that you have a grasp on how to prepare for a salary negotiation, let’s dive into how to negotiate salary offer, specifically strategies to successfully negotiate a salary offer.

 

How to negotiate a salary offer (Strategies)

  1. Confirm that an offer is negotiable
  2. Negotiate for precise and specific dollar amounts
  3. Use data to your advantage
  4. Use data-driven word economy to clearly communicate your value in counteroffers
  5. Use tactics to overcome bias
  6. Confirm that the “final” offer is equitable
  7. Get all details of your offer in writing

1. Confirm that an offer is negotiable. A detrimental mistake many people make when negotiating salary is engaging in a salary negotiation without confirming that an offer is negotiable.

Prior to negotiating salary it’s important to confirm that an offer is negotiable in order to set the stage for both parties to enter into a salary negotiation. If you start negotiating and take the other person by surprise depending on who you’re interacting with, and in the case the offer is not negotiable, their response can be anything from defensiveness to anger.

While offers that are not presented as “best and final” or “non-negotiable” are typically negotiable it’s important to always confirm that the offer is negotiable before making a counteroffer. If the person you’re negotiating with forgot to say the offer is “best and final” or “non-negotiable” or untrained to state that the offer is “best and final” or “non-negotiable” but went out of their way to present you with a competitive offer they thought you’d be very happy with you can offend them by trying to negotiate more. On rare occasions this can result in an offer being rescinded.

To successfully negotiate salary make sure to always confirm that an offer is negotiable before opening a negotiation and making a counteroffer.

2. Negotiate for precise and specific dollar amounts: Use the qualitative and quantitative market data and personal performance data you’ve collected to set:

  • A specific “moonshot” dollar value goal to negotiate for
  • Your must-have base pay minimum
  • Counteroffer dollar amounts

Research conducted by Columbia Business School professors found that salary negotiations are more successful when a person is very precise with the amount that they want and does not round the number.

For example, when a person asks for an annual salary of $77,814.00 they are more likely to be successful than a person who negotiates for $78,000.00. This is because there is an illusion that the person has done their homework.

A person who negotiates for a precise amount is perceived “as better informed, the person on the opposite end believes there is less room to negotiate.”

To increase your chances of a successful negotiation do not round dollar amounts but ask for very specific values based on what the market is paying for someone with your skills, experience, education, and track record of success.

3. Use data to your advantage: One of the best ways to have a successful salary negotiation is to use data to your advantage.

Types of data points to use in your salary negotiation include:

  • Qualitative data you get from the company regarding how they calculate compensation
  • Market research on what the industry is paying someone performing the duties and responsibilities of the role with your experience, skills, education, and track record of success
  • Research on the person or persons you are negotiating with
  • Your quantified professional achievements as they relate to the duties and responsibilities of the position

Data roots your negotiation in logic. When you use data to explain what the market is paying for your skills, experience, and abilities as well as what you can contribute to the company you are perceived as reasonable and fair, not emotional or entitled.

Data is a valuable bargaining tool that helps you get the salary you’re looking for. It’s very difficult to outright say “no” to someone who uses data to create a persuasive argument while being polite, friendly, gracious, and professional.

4. Use data-driven word economy to clearly communicate your value in counteroffers: When negotiating your salary, it’s important to use data-driven word economy. This means using as few words as possible while incorporating data into what you say to clearly communicate your value.

When a person uses less words to communicate they are perceived as knowledgeable, as having clear thought processes, and to have leadership traits.

In a salary negotiation data-driven word economy helps to overcome direct and implicit biases held by the person or persons you may be negotiating with. When you’re able to overcome biases you increase the likelihood of a successful salary negotiation.

Let’s contrast examples of negotiating compensation with and without data-driven word economy.

In our examples a potential new hire is negotiating the base pay for a project management position. In Example A the new hire uses no data-driven word economy to negotiate their pay. In Example B the new hire uses data-driven word economy to negotiate their pay and communicate a persuasive argument.

No Data-Driven Word Economy Used (Example A)

“I’m worth $121,814.00 because I have four years of experience.

 

I was loved by everyone in my first job, where I learned time management skills and used those skills to keep projects on schedule.

 

In my second job, which was my most recent position, I was often asked to schmooze clients because they loved my personality.

 

This would result in them spending more with the company. In my last job I would also lead project meetings to keep projects on track.”

Data-driven Word Economy Used (Example B)

“This position requires efficient team leading and client management skills.

 

In my last position I increased my team’s productivity by 15% and client spend by 38% resulting in an additional $388,400.00 in annual profit.

 

An annual salary of $121,814.00 best reflects my ability to implement efficient processes that increase team efficiency and client happiness to yield profitable results.”

In Example A the person negotiating does not clearly communicate how their skills impacted the company. Their choice of words are “fluffy” and leave room for doubt.

In Example B the person skips fluffy details and focuses on correlating the job’s duties and responsibilities with quantified work achievements that reflect their abilities and monetary value.

When negotiating salary the use of data-driven word economy makes a significant difference. Using data-driven word economy puts you in a position to “speak business.” Meaning you empower yourself to clearly communicate your ability to contribute to the bottom line of the business. This is important when negotiating salary because the person you are negotiating with wants to know that there will be a fair exchange of value. The exchange of value being the business paying you $X and you using your skills and potential to excel in the job’s duties and responsibilities to help the business achieve its short and long-term goals.

The use of data-driven word economy in the workplace can also position you to be viewed as a leader and position you for promotions and pay raises.

5. Use tactics to overcome bias: Everyone has bias. Biases can be explicit and consciously held or implicit and unconsciously held. Gender bias, racial bias, and sexual orientation bias are common biases that can result in offers that are lower than what the market is paying.

Depending on who you are, the biases of the person or persons you are negotiating with can help your salary negotiation or create a challenge you need to overcome.

To overcome bias in a salary negotiation it is important to:

 

  • Ask questions about how the company calculates compensation in order to create accountability
  • Use data-driven word economy to clearly communicate your value
  • Never share salary history or salary expectations and allow an anchor to be set
  • Increase your likeability and thereby persuasiveness by expressing gratitude throughout a negotiation

6. Confirm that the “final” offer is equitable: In order to not leave money on the table it is important to confirm that a “final” offer is equitable. To confirm if an offer is equitable you want to ask three questions:

  • How was this base pay calculated?
    • Was the same calculation used for every employee in this position?
  • Where does a base pay of $X fall on the compa ratio for this position?

The answers you receive to these three questions will tell you if the offer is rooted in what the market is paying for someone with your skills, education, and level of experience, if the offer is rooted in a perception of your value based on who you are, or a blend of both.

How was this offer calculated?

If the employer cannot detail how the offer was calculated using (weighted) variables the offer is likely based on a perception of the value of your skills and experience and highly influenced by the employer’s salary negotiation persona. If the employer can easily detail how the offer is calculated and shares the formula used then it is a good sign that the offer you received is equitable. The use of a standardized formula to calculate every employee’s compensation makes it very difficult to allow direct and implicit bias to influence compensation decisions. Depending on the answer you get to the question “How was this offer calculated?” you may want to ask the question “Was the same calculation used for every employee in this position?” This follow up question provides insight into the standardized application of the company’s compensation formula and its authentic commitment to equitable compensation.

Where does this offer fit on the compa ratio?

The third question you want to ask is “Where does this offer fit on the compa ratio?” This question lets you know if your offer is less than the median pay for the position at the company, equal to the median pay for the position, or higher than the median pay for the position.

What is a compa ratio?

A compa ratio is a tool used by HR to compare an employee’s salary to the median salary of others in the same position at the company or within the market. A compa ratio may be communicated in decimals or percentiles.

In decimals the compa ratio scale is from .80 to 1.2. In decimals the number one is median pay.

To create some level of pay standardization many companies will organize role-specific decimal compa ratios as follows:

  • 0.8 – 0.9 is for new or entry-level hires and/or poor performers
  • 0.91 – 1.10 is for mid-level employees with some experience and/or good performance
  • 1.11 – 1.20 is for senior-level employees with significant experience and excellent performance

In percentiles the compa ratio is from 80% to 120%. In percentiles one hundred percent is the median pay. A company’s compa ratio scale in percentiles may look like the following:

  • 80% – 90% is for new or entry-level hires and/or poor performers
  • 91% – 110% is for mid-level employees with some experience and/or good performance
  • 111% – 120% is for senior-level employees with significant experience and excellent performance

Compa Ratio in Decimals

An individual’s compa ratio is calculated by dividing their annual pay/salary by the median annual pay/salary for their position.

The formula to calculate in decimals where your offer fits on a compa ratio scale is:

  • Base salary offer/Median salary for the position

Let’s walk through a couple of examples…

Compa Ratio (Example 1)

If you received an offer of $102,000.00 and the median salary for the position was $119,420.00, the compa ratio would be 0.85. The calculation is as follows:

 

  • $102,000.00/$119,420.00 = 0.85

Compa Ratio (Example 2)

If you received an offer of $64,000.00 and the median salary for the position was $67,500.00, the compa ratio would be 0.95. The calculation is as follows:

 

  • $64,000.00/$67,500.00 = 0.95

Compa Ratio (Example 3)

If you received an offer of $84,000.00 and the median salary for the position was $70,000.00, the compa ratio would be 1.20. The calculation is as follows:

 

  • $84,000.00/$70,000.00 = 1.20

A compa ratio of 1.0 details that your offer is equal to the median pay for the position. A compa ratio higher or lower than 1.0 details how your offer compares to the median salary for the position.

The closer to 1.2, the top of the compa ratio scale, the better your offer. If your offer is above 1.2 the offer is hyper-competitive.

Inversely, the closer your offer to 0.8, the worse the offer is in comparison to the average salary for the position.

Compa Ratio in Percentiles

The formula to calculate compa ratio in percentiles to compare an your offer to the pay of others in the same role is:

  • (Base salary offer/Median salary for the position)*100

Let’s use our examples above and calculate the percentile compa ratios.

Compa Ratio (Example 1a)

If you received an offer of $102,000.00 and the median salary for the position was $119,420.00, the percentile compa ratio would be 85%. The calculation is as follows:

 

  • $102,000.00/$119,420.00 * 100 = 85%

Compa Ratio (Example 2b)

If you received an offer of $64,000.00 and the median salary for the position was $67,500.00, the percentile compa ratio would be 95%. The calculation is as follows:

 

  • $64,000.00/$67,500.00 * 100 = 95%

Compa Ratio (Example 3c)

If you received an offer of $84,000.00 and the median salary for the position was $70,000.00, percentile compa ratio would be 120%. The calculation is as follows:

 

  • $84,000.00/$70,000.00 * 100 = 120%
In a salary negotiation the question “Where does this offer fit on the compa ratio?” is very powerful. The compa ratio is a calculation from the company that lets you know how your annual pay/salary offer compares to the pay of other people in the role. A compa ratio data point lets you know very clearly how equitable your offer is within the company (and market):
  • Below 0.79 or 0.79% is underpaid
  • 0.8 – 0.9 or 80% – 90% is at the low end of the pay scale
  • 0.91 – 1.10 or 91% – 110% is median pay
  • 1.11 – 1.20 or 111% – 120% is at the high end of the pay scale
  • Above 1.20 or 120% is hyper-competitive pay
It’s important to note that just because an offer’s compa ratio is competitive for a company it does not mean the offer is competitive for the market. To calculate how competitive an offer is for the market you can use the following calculations:
  • (Base salary offer/Market salary for the position)
  • (Base salary offer/Market salary for the position)*100
Ask where your offer falls on the company’s compa ratio for the position to gain clear insights into how equitable your base pay offer is.

7. Get your offer in writing: Once you reach mutual agreement on your base pay and other variables that make up your total rewards make sure to get your offer in writing. If a detail you agreed to in your negotiation is not written into your Employee Offer Letter that gets signed by you and the employer it does not need to be upheld.

Even if you trust the employer and company to uphold what they agreed to in your salary negotiation, still get every detail in your Employee Offer Letter. Your employer/direct supervisor/person you negotiate with may leave the company, get fired, or go on maternity or paternity leave resulting in a person replacing them trying to force practices or processes outside of the bounds of what you agreed to in your salary negotiation.

For example, let’s say as part of your total rewards to increase your productivity and long-term success you negotiated the ability not to take meetings (in-person or via phone/video) on Fridays. You’ve been at the company for eight months and your supervisor leaves the company. You get a new supervisor who is trying to have you take meetings on Fridays like everyone else.

Rather than have a back and forth about what was said in your salary negotiation all you have to do is provide your new supervisor a copy of your dually signed Employee Offer Letter that clearly states a condition of your employment is that you do not take meetings on Friday so that you can increase your productivity on that day.

Without the “No meeting on Fridays” details written into your Employee Offer Letter you would have been on the losing end of a battle with a new supervisor.

To ensure what you agree to in a salary negotiation is always upheld by the company, have the details written into an Employee Offer Letter or other employee agreement that is signed by you and a representative of the company.

How to Negotiate Salary Offer (Tips):

  • Be careful not to disclose salary history
  • Be confident, yet humble
  • Be honest
  • Be open to compromise
  • Be positive and energetic
  • Be prepared and practiced
  • Be prepared to walk away if your must-haves are not met
  • Don’t accept the first offer (unless it’s presented as best and final and meets your expectations)
  • Don’t be entitled
  • Don’t bring up personal finances and bills
  • Don’t give an ultimatum
  • Don’t make threats
  • Express gratitude throughout the process
  • Have leverage via competing offers
  • Know your must-haves
  • Know your nice-to-haves and what you can be flexible on
  • Negotiate the whole job (i.e. make sure you truly understand the job’s duties and responsibilities)
  • Negotiate beyond base pay, negotiate the total rewards package
  • Think about the long-term win-win
  • Use personal data and market data to communicate clear persuasive (non-emotional) negotiation points
  • Use silence to your advantage
  • Use word economy to communicate precisely
  • View a salary negotiation as a collaboration

How to Negotiate Salary in an Interview

How to Negotiate Salary in an Interview | How to Negotiate Salary

If you’re getting ready to negotiate your compensation as part of an interview process then this how to negotiate salary in an interview section is for you!

What Are Your Salary Expectations Best Answer

The process to negotiate salary in an interview starts when the first request for your salary expectation is made. A salary expectation request can be made even before you interview for a job. Most employers now include a field in their job application that requires you to submit your desired salary in the application.

If you enter a specific dollar value in the salary expectations field it will set an anchor for your salary negotiation making it harder (though not impossible) to negotiate a higher salary. If possible, it’s best to enter “Negotiable” into the field. Entering “negotiable” allows you to run your salary negotiation process without the additional hurdle of overcoming a salary anchor that you’ve set.

If during the interview process you’re asked for your salary expectations it’s best to say something like…

What Are Your Salary Expectations Best Answer (Example)

“I’m excited about this position and to learn more about its job duties and requirements.

 

I don’t have enough information to answer the question at this time.

 

What is the salary range budgeted for the position?”

This statement helps you express your interest in the position while gathering information for your salary negotiation without setting an uninformed salary negotiation anchor. Not providing a specific dollar amount to a question about salary expectation helps to minimize the likelihood that you will be lowballed.

Ask Questions to Negotiate Salary in an Interview

The process of learning how to negotiate salary in an interview includes acting like a detective. You want to collect information to understand salary negotiation parameters.

At appropriate times during an interview you want to ask questions about the position, it’s duties and responsibilities, and the company to ensure:

 

  • All job duties and responsibilities are listed in the job description
  • You understand what resources are available to you to perform the duties and requirements of the job (i.e. will you have the tools you need to support your success and help you excel or will you have to put in extra work and hours to be successful)
  • You understand how the company determines base pay and creates total reward compensation packages
  • You have the details you need to research the market and establish data-driven salary and total rewards compensation goals

How to Negotiate Salary in an Interview (Suggested Strategy)

As a job interview progresses and the employer expresses interest in hiring you they may make a verbal offer. If you receive a verbal offer, express your gratitude and enthusiasm, ask for the offer in writing, and ask for time to review the offer.

Fuse together the details in the job offer with the information you collected to compare your offer to what the market is paying for your skills. Use the information to set your must-haves and nice-to-haves and then follow up with the employer to see if the offer is negotiable.

If the offer is negotiable make specific counteroffers ensuring not to forget to negotiate for things like job perks, stock options, income impacting variables, and variables that will contribute to your overall happiness and total rewards.

Once you reach a mutual agreement make sure all the details of your salary negotiation are included in your Employee Offer Letter.

How to negotiate salary in an interview:

  • Express your gratitude and enthusiasm
  • Ask for the offer in writing
  • Request time to review the offer
  • Compare the offer to what similar companies in the market are paying for someone with your skills, education, experience, and track record of success
  • Set your must-haves
  • Set your nice-to-haves
  • Ask if the offer is negotiable
  • Make specific counteroffers to negotiate your total rewards
  • Ensure all final negotiation details are written into your Employee Offer Letter

How to Ask to Negotiate Salary

How to Ask to Negotiate Salary | How to Negotiate Salary

Asking if an offer is negotiable is critical to setting a positive tone for a salary negotiation. It is also one of the most overlooked parts of a salary negotiation.

Not asking if an offer is negotiable and beginning to negotiate salary can have detrimental consequences. These consequences can range from the employer having a defensive attitude (which doesn’t help you in your salary negotiation) to having a job offer rescinded (a rare extreme response).

To avoid these consequences it’s important to learn how to ask to negotiate salary. The process of asking to negotiate salary is simple. Here is an example:

How to Ask to Negotiate Salary (Example)

“Thank you for the offer!

 

I appreciate it and am very excited about the opportunity to join the company.

 

I know I can excel here.

 

I am wondering, is this offer negotiable?”

The three sentence “How to Ask to Negotiate Salary” example above:

  • Expresses gratitude
  • Shares excitement
  • Clearly asks if salary is negotiable in a direct yet soft manner

The employer will either respond with a “Yes” and ask you what you had in mind or they will let you know that the offer is not negotiable. If the offer is not negotiable you can either accept it, decline the offer, or ask when they need an answer and continue the interview process and use the offer as leverage to negotiate starting salary.

How to Negotiate Starting Salary

Once you’ve confirmed that an offer is negotiable you’re ready to negotiate your starting salary. To negotiate your starting salary what you say should:

  • Be gracious
  • Be rooted in market research data
  • Rooted in quantified personal performance data
  • Confident and friendly
  • Express enthusiasm to accept the position

Below is an example of how to negotiate starting salary.

How to Negotiate Starting Salary (Example)

“Thank you for being open to negotiating. I’m really excited about this position. The offer of $130,000.00 was lower than anticipated.

 

The primary focus of the position is to support the Chief Marketing Officer in organic customer acquisition via the creation of long and short form content.

 

In my last position I created and promoted 72 pieces of SEO optimized content that resulted in a flywheel that continues to generate an average of 723,500 new monthly unique visitors, the annual acquisition of 42,410 new customers, and $3.1 million in new annual recurring revenue.

 

Based on my research of similar positions and companies at the same stage the market is paying a base salary of $186,488.00 for someone with my skills, experience, education, and track record of success.

 

If the company can come up to this market rate I could, and would love to, get started in two weeks on Monday, September 8th.

 

What do you think?”

The how to negotiate starting salary example above:

  • Expresses gratitude for the ability to negotiate
  • Shares excitement
  • Clearly states the offer is lower than expected
  • Provides a data-driven word economy persuasive statement that connects their value to the duties and responsibilities of the job
  • States they have done market research
  • Makes a specific dollar ask
  • Adds a level of urgency and finality by providing a date that they would start if the company agrees to the specific dollar ask

Following this process to negotiate a starting salary increases your likeability, roots your negotiation in data, increases your credibility and perception of fairness, and communicates you want to quickly come to a mutual agreement so you can get started in the position. All of these details increase the likelihood of a successful salary negotiation outcome.

Best Answer for Salary Negotiation

Best Answer for Salary Negotiation | How to Negotiate Salary

The best answer for a salary negotiation is tailored to the details of each negotiation. The best answer for a salary negotiation is not a templated script or response. It is one that utilizes market data, personal performance data, and your must-haves as well as your understanding of the employer’s salary negotiation persona, BATNA, and company variables that may limit outcomes. For example, if you are negotiating a new job offer versus a salary adjustment at a current job the employer’s BATNA is different. This makes what you say to negotiate the best outcome different for each situation. As a potential new hire a BATNA for the employer could be hiring the second best person for the job. In this case the best answer for a salary negotiation takes into consideration the employer’s BATNA and how easy it may be for them to end the salary negotiation and offer the position to another person. The best answer for a situation where a potential employer could end the salary negotiation and offer the job to another person should include:
  • Quantified work data that relates achievements to the duties and responsibilities of the position
  • Quantified work data that communicates your achievements and abilities to relation to the bottom line of the company (i.e. Why you are worth more and the better option to a “cheaper” hire)
  • Areas of expertise in which you require no training and thus save the company money
  • Information on how quickly you can begin to make an impact, especially compared to new hires that require substantial training (which make less experienced applicants a larger financial investment to hire)
If you’re negotiating pay and total rewards with your employer and you’re a valued employee if you don’t come to a salary agreement the BATNA for the employer could be running a costly and time sucking process to hire and train someone because you resign to work at another company that will pay you more. In this case the best answer for a salary negotiation takes into account the leverage of being a valued employee and how much time and money the company would lose replacing you. The best answer for a salary negotiation in which you are a valued employee could include:
  • Quantified work data that relates your on-the-job achievements to the duties and responsibilities of the position
  • Awards and recognition you’ve earned for the company
  • What the market is paying for your skills and contributions
  • How long it would take to hire and train someone to replace you
  • How long it would take someone to get up to your level of productivity
The best answer for salary negotiation is specific to the situation and well-formulated. It is a clear and concise response that leaves no room for interpretation or doubt.

Negotiate Salary Script

Negotiate Salary Script | How to Negotiate Salary

Practicing what you’ll say when you’re in a salary negotiation will help you effectively and confidently communicate what you want without coming across unsure of yourself, emotional, or entitled.

A salary negotiation is part art and part science. There are many variables that should be taken into account. It’s important to note a salary negotiation script is not one size fits all.

Below is a salary negotiation script for a new job offer negotiation. If you’re getting ready to negotiate a new job, you can use the salary negotiation script below to practice an example of what you could say (if the situation is right).

Simply fill-in-the-blank spaces with your relevant information and practice saying the script out loud.

Negotiate Salary Script (for a Job Offer)

“I’m very excited about the potential of starting as the new [Position] at [Company Name]. The role aligns well with my skills, experience, and career goals.

 

Based on my research of the market and what companies at the same stage are paying for the job’s duties and responsibilities to be completed, the offer is lower than I expected for someone with my experience.

 

The position requires X. I have Y by Z.

 

The position also requires X. I have Y by Z.

 

Job duties also include X. I have Y by Z.

 

A salary of $ABC most accurately reflects what the market is paying for my skills.

 

If you’re able to meet this number I can confirm that I can start on [Insert date].

 

What do you think?”

Negotiate Salary Script (for a Salary Adjustment When You Get New Job Duties)

“I appreciate that my success and contributions have resulted in being trusted to also be responsible for XYZ.

 

Unfortunately, no mention of a pay raise has come up yet with the addition of the new duties and responsibilities.

 

I want to bring this to your attention as I’m sure it’s just an oversight.

 

To help correct the oversight I have researched what companies at our stage are paying a person with my skills, experience, and track record of success to complete these duties in addition to what I have always been responsible for.

 

The market is paying $X. A salary adjustment of $Y will fairly reflect the addition of the new duties and responsibilities.

 

Is the company able to adjust my salary so that I’m compensated for the new job duties and responsibilities I’ve been trusted with?”

Negotiating salary can be tricky business. It’s important to come across as confident and knowledgeable, without being overbearing or entitled. The negotiate salary scripts above are examples of what you could say to help you get the best possible salary, without jeopardizing your chances of being hired or losing your job.

How to Negotiate Salary with HR

How to Negotiate Salary with HR | How to Negotiate Salary

The function of HR is to protect the interests of the company. When you’re negotiating salary with HR, they will be looking out for what’s best for the company. It is their responsibility to ensure that an employee is fairly compensated in order hire and retain good employees and to prevent wage discrimination and/or wage theft lawsuits. HR is also responsible for overseeing the company’s compensation practices and supporting the creation of job families, a group of occupations that perform similar work and that require comparable training, talents, experience, and expertise. As previously shared, the way HR views salary negotiations is very systematic. As a result they are typically the least flexible to negotiate with especially when it comes to negotiating compensation that goes over an allotted budget (even if the market warrants it) or when negotiating a job title that they’ve worked to standardize within a job family. For these reasons, it’s important to be strategic when negotiating salary with HR.

Tips on how to negotiate salary with HR:

  • Prior to negotiating salary, ask questions, such as:
    • What is the budget for the position?
    • How is compensation calculated?
    • What does the total rewards compensation package include?
    • What is negotiable?
    • Are there benefits and job perks not listed in the total rewards compensation package? (For example, being assigned a mentor to help you achieve your career goals)
  • Ensure your market research compares apples to apples by using sources with similar job duties and responsibilities as well as companies at the same growth stage, that are operating in the same industry, and that are in the location the company uses to benchmark compensation
  • Be prepared to compromise by knowing your must-haves and nice-to-haves
  • When you receive an offer ask “Where does this offer fall on the compa ratio scale for this position?”
  • Consider HR’s priorities to strategically format and articulate your counteroffers
  • Use data-driven word economy to make clear and concise counteroffers that illustrate your value to the company
  • Carefully review the final Employment Offer Letter to ensure all negotiated details are included

How to Negotiate a Higher Salary

How to Negotiate a Higher Salary | How to Negotiate Salary 

The process to negotiate a higher salary is part art and part science. The art resides in building rapport with the person with whom you are negotiating. The science resides in understanding what needs to be communicated and in what format to make a persuasive case for a higher salary.

Before we get into the art and science of how to negotiate a higher salary, let’s cover variables that can cap your salary, make it harder to negotiate a higher salary, or make it easier to negotiate a higher salary.

Variables that influence how flexible a company will be with a salary negotiation include:

  • What the market is paying for similar positions
  • What the market is paying someone with your skill level and experience performing the duties and responsibilities of the position
  • The budgeted salary range for the position
  • The company’s processes to set salary (are processes standardized or not)
  • The type of company and its stage (e.g. Public company, Series C stage, Seed Stage, Non-profit, SMB, etc.)
  • What city the company uses to calculate base pay for your position (and is it the same city for every person in the role regardless of location or does the city where the work is performed impact base pay)
  • The position’s level (e.g. Entry level, Mid level, Senior Level, or C-Suite)
  • If the position is a leadership role responsible for leading the success of a department, team, and/or others
  • If the position is an individual contributor with no leadership responsibility
  • If the position directly contributes to revenue generation or not (e.g. a Chief Product Officer, a User Experience Designer, Marketer, or Sales Engineer versus Payroll, Accounting, Human Resources Representatives, Administration)
  • How important the position is to the company (e.g. An international snack food chips company hiring software developers will likely pay less for a software developer than a funded Series B or Series C technology startup. This is because a global snack food company’s view of a software developer is to support the manufacturing and distribution of its snack chips whereas a technology software startup views the function of a software developer as critical and very important to the company’s success.)
  • How much the company wants to hire you
  • If you have salary negotiation leverage such as competing offers

These variables can contribute to your ability to negotiate a higher salary. Keeping these variables in mind will help you set salary negotiation goals that are well-informed (and realistic).

How to Negotiate a Higher Salary (The Art)

When a person feels a connection with you and they feel appreciated they are more likely to go out of their way to help you. Building rapport is key to unlocking “the art” of negotiation.

Below are some tips on how to build rapport with the person(s) you negotiate with:

  • Be genuine and authentic
  • Naturally use the name of the person(s) with whom you are negotiating
  • Sincerely express gratitude at appropriate times throughout the negotiation process
  • Make small talk, if appropriate, and try to find something in common
  • Mirror body language (without being creepy)
  • Keep your body language open, never fold your arms
  • Lean in slightly when listening and speaking
  • Nod your head (at appropriate times when the other person is speaking)

In addition, to building rapport with the person(s) you negotiate with to negotiate a higher salary you should:

 

  • Show passion
  • Believe you deserve the highest base pay possible (just make sure the base pay you believe your deserve is rooted in data)
  • Be confident and friendly
  • Listen intently, salary negotiations are extremely nuanced it’s important to listen more than you speak
  • Stay the course, when you say something and expect a reply from the other person and they don’t say anything wait for them to respond, silent pauses can work in your favor
  • Be persuasive not argumentative
  • Be flexible, but not too flexible

How to Negotiate a Higher Salary (The Science)

The science of a salary negotiation is understanding the process, what needs to be communicated, and how best to communicate it. In order to negotiate a higher salary you must:

 

  • Ensure you understand salary negotiation terminology such as: total compensation, total rewards, and “desired compensation type” versus “desired salary range” (if you are unsure that you and the person(s) you are negotiation with are using a term in the same way or if you are unsure what a specific term means it is critical that you ask to avoid a costly salary negotiation miscommunication or mistake)
  • Research the market
  • Account for variables that will increase or decrease the company’s negotiation flexibility
  • Get salary negotiation leverage such as multiple competing offers
  • Never share salary history
  • Ask questions regarding the company’s budget for the position
  • Ask questions about the job’s duties and responsibilities to ensure you negotiate compensation for all duties and responsibilities
  • Set personal must-have goals based on market data and personal achievement data
  • Confirm that an offer is negotiable
  • Negotiate for your base pay goals plus benefits, job perks, other monetary incentives such as stock options, as well as variables that make up your total rewards
  • Counteroffer using data-driven word economy to clearly communicate your value
  • Ensure every detail of your salary negotiation is included in the Employee Offer Letter, if a detail is omitted the company does not have to uphold the detail

How to Negotiate a Higher Starting Salary

Now that you have a good understanding of how the art and science of a salary negotiation work together to increase your salary, let’s dive into how to negotiate a higher starting salary. To negotiate a higher starting salary you need to: 1.) confirm the offer is negotiable, and 2.) clearly communicate your value. To clearly communicate your value what you say should:
  • Reference a job duty or responsibility from the job description
  • Use metrics to highlight how you have previously achieved positive outcomes for the job duty or responsibility or similar to the job duty or responsibility
  • Counteroffer using a specific (not rounded) dollar value
Below is a template to help you learn how to negotiate a higher starting salary:

How to Negotiate a Higher Starting Salary (Template)

“I appreciate your offer and I’m very excited about the position.

 

Understanding the job’s duties and responsibilities I see the position requires XYZ.

 

I have previously [Insert what you achieved using metrics] by [Insert how you achieved the results].

 

The market is paying [Insert specific dollar value] for someone with these skills.

 

If you can come up I can get started on [Insert date].”

When you use this format to negotiate a higher starting salary you leverage your personal performance data and market data to make a counteroffer. The counteroffer is based on data. When you fuse factual points with tactics from “the art of a salary negotiation,” such as gratitude and likability, you increase your chances of negotiating a higher starting salary.

Salary Negotiation Conversation Example

Salary Negotiation Conversation Example | How to Negotiate Salary

It’s not often that we negotiate salary. Most people only negotiate salary a handful of times in their life. Not knowing what to expect in a salary negotiation can make the idea of negotiating scary, especially if you’ve never done it before.

One of the best ways to learn how to negotiate salary is to see a salary negotiation conversation example. By seeing how a real-life salary negotiation could play out, you can get a better sense of what to say (and what not to say) when it’s your turn to negotiate.

Below is an example of a salary negotiation conversation example. In it you will see:

  • How to graciously open a salary negotiation
  • How to make a counteroffer
  • How to use market data to support your salary negotiation
  • How to use personal performance data to support your salary negotiation
  • How to be flexible and compromise

Every salary negotiation is nuanced but in general they follow the same salary negotiation flow:

 

  • Offer
  • Seeing if the offer is negotiable
  • Back and forth counteroffers
  • Compromise
  • Mutual agreement

Salary Negotiation Conversation Example (Dialogue Part 1 of 3)

Employer

“Hi, we’re excited to offer you the job. Here’s our initial compensation package.”

Potential Employee

“Thank you for offering me the job! I’m happy to be considered, but I’m not sure this is the right fit for me.

Can we discuss the base pay?

It is lower than what the market is paying for someone with my skills, education, and experience.

Is the offer negotiable?

Employer

“We usually don’t negotiate salary for this position, but I’ll go ahead and see what I can do. What are you looking for?”

Potential Employee

“I’m looking for a salary that’s in line with my experience and skills.

I have ABC which has XYZ. This shows my ability to excel at 123 job duty.

I also have ABC which has XYZ. This shows my ability to excel at 123 job duty.

I believe $X to be an equitable base salary based on the market and my proven abilities.”

Employer

“That sounds like a lot more than what we’re offering. We usually start new employees at $Y.

Let me see what I can do. I may be able to bump you up to $Y, but that’s probably the best I can do. Will that work?”

Potential Employee

“That’s not quite what I am looking for, but I’m excited about the position and appreciate your offer. I’ll think about it and get back to you.”

Salary Negotiation Conversation Example (Dialogue Part 2 of 3)

Potential Employee

“Hi, I wanted to follow up on our previous conversation about base pay.

After some further research on what the market is paying for my skills and experience, $Y is low.

Would you be willing to increase the salary to $Xa?”

Employer

“I understand where you’re coming from, but we have a limited budget for this position. We can’t go any higher than $Y.”

Potential Employee

“I see. I’m really excited about this role and the potential of growing with the company.

To get me to $Xa would the company be open to:

  • Increasing my stock options by Q%,
  • Providing a signing bonus of $Z,
  • Implementing a monthly transportation stipend of $150.00 for travel into work for the two required days, as well as
  • A monthly work from home stipend of $75.00 to cover the internet upgrade I’ll have to make?

If we can do this then I can confirm that I can start on AB/AB/ABAB.”

Employer

“Let me look into this and see what we can do.”

Potential Employee

“Okay, thank you for considering my request. I really hope we can figure this out.”

Salary Negotiation Conversation Example (Dialogue Part 3 of 3)

Employer

“We are able to:

  • Increase your stock options by Q% vesting over four years with a one-year cliff,
  • Provide a signing bonus of $Z to be paid out in 12 equal parts during your first year of employment, and
  • Provide both your requested monthly transportation and work from home internet stipends.

Does this work for you?”

Potential Employee

“It does!

I really appreciate all your efforts and that the company recognizes my value.

I look forward to hitting the ground running on AB/AB/ABAB.

What are the next steps?

Employer

“We’ll write up an offer letter. Then once you sign it we will get everything ready for you to start on AB/AB/ABAB.”

Potential Employee

“Sounds great, thank you again!”

This is a salary negotiation conversation example. As you can see, it’s important to:

  • Confirm that an offer is negotiable
  • Know your must-haves
  • Root your negotiation in market research
  • Root your negotiation in quantified personal performance data that clearly communicates your abilities and value to the company
  • Be assertive but not aggressive
  • Be willing to find ways to compromise

Remember, as long as an offer is not presented as “best and final” or “non-negotiable” you’re not obligated to accept the first offer. If the offer isn’t what you’re looking for, be prepared to negotiate. With these tips in mind, you can confidently negotiate your salary.

When Not to Negotiate Salary

When Not to Negotiate Salary | How to Negotiate Salary

A part of learning how to negotiate salary is learning that there are appropriate and inappropriate times to negotiate salary. It’s important to be aware of when not to negotiate salary. Negotiating salary at the wrong time can have detrimental repercussions.

When not to negotiate salary:

  • At the beginning of an interview. If you enter a job interview and begin negotiating salary, it sends a red flag to the employer. If a potential employer has not signaled they are interested in hiring you and you start negotiating salary they may think you’re not interested in the details of the job or that you’re only interested in money.
  • When you are underperforming at work. If you are not performing well at work, it’s not the time to negotiate salary. Your employer may find the conversation off putting and use the situation to highlight your lack of performance. This can result in being placed on probation or even fired.
  • When you are emotional. Emotions can run high if you discover you’re underpaid or that you’re being lowballed. Your emotions may prompt you to want to jump into a salary negotiation. Entering a salary negotiation when you are emotional can have negative consequences. If you are emotional, it’s difficult to think rationally and make logical arguments. You might even make unintentional threats or give an ultimatum that loses you a job opportunity or gets you fired. When you’re emotional, it’s best to wait until you’ve calmed down before negotiating salary.
  • When you are unprepared. Successful salary negotiations are rooted in preparation. If you’re not prepared, it will be difficult to make a strong case for why you deserve a higher salary. Do your research, prepare what you’ll say, and practice what you’ll say in different scenarios. This preparation will help you negotiate in a friendly and confident manner and boost your chances of success.
If you’re unsure about when to negotiate, it’s always best to err on the side of caution and wait until after you’ve received a job offer, are performing well at work, or when you are level-headed and well-prepared.

How to Negotiate Salary Reddit (Beware of Bad Advice)

How to Negotiate Salary Reddit (Beware of Bad Advice) | How to Negotiate Salary

Given that resources to learn how to negotiate salary have been limited (until the creation of PayDestiny 😄💵) many people have sought salary negotiation advice in online forums like Reddit.

Unfortunately, this is very dangerous since most people are unfamiliar with the salary negotiation process from the perspective of the potential employee or employee and all employer roles that could participate in a salary negotiation.

In addition, a person offering advice may have “credentials” but offer advice from a limited and/or biased perspective. This can result in bad advice that harms the success of a salary negotiation and long-term earnings.

When seeking salary negotiation advice online people often search “‘How to Negotiate Salary Reddit.’ The top search engine result links to a forum thread where most of the advice is bad.

The thread starts with someone asking the question “How to negotiate a (better) salary?

Reddit Logo

How to negotiate a (better) salary? (Reddit Forum Question)

“I am in the market for a career change and have little idea what my skills are worth a little outside my current profession. If a prospective employer wants to discuss salary, how do I find out the maximum they are willing to offer?

Also, I know I should not throw out the first number, but how do I avoid it when they ask directly (ie What is your current salary? What are your salary requirements? etc…)

Thanks for your help.”

As of the time of writing this guide the question “How to negotiate a (better) salary” has been upvoted 822 times. The top comment, out of 381 comments, is:
  • 10 years old
  • Written by someone who states they are an executive recruiter
  • (Very dangerously) Upvoted 638 times
Of the nine key points the top comment makes eight of them are bad and harmful to a salary negotiation. How to Negotiate Salary Reddit (Reddit Response) | How o Negotiate Salary

How to Negotiate Salary Reddit (Beware of Bad Advice)

Let’s dive into the key points of the top response to the question “How to negotiate a (better) salary?”

🚫 (Bad) The top comment is from an executive recruiter whose lens on the salary negotiation process is very different than a team lead or owner who are the best employer personas to negotiate with. This makes the advice limited in scope and biased based on the individual’s job function as a recruiter, their limitations, and job goals.

✅ (Good) The top comment says “…decide for yourself what you want. Decide in your head as early as you can…” This is good advice if you have done market research to support the development of your base pay minimum, base pay “moonshot” goal, must-haves, and nice-to-haves.

🚫 (Bad) The top comment does not recommend the use of market research or personal performance data to determine your base pay minimum, base pay “moonshot” goal, must-haves, and nice-to-haves.

🚫 (Bad) The top comment gives the following instructions: “When asked what you want (it is inevitable), tell them “I would really like $T (target) but I could be flexible for the right opportunity.”

This advice helps recruiters gain salary expectation information that helps to set an anchor that can result in lowball offers. While the recruiter may seek to understand where you fall within their hiring budget the question still results in setting a salary negotiation anchor.

They could simply not ask for your salary expectations and share the salary range for the position instead. This would allow you to determine if the budget for the position is inline with what you’re looking for.

This advice benefits the job function of a recruiter more than the outcome of a potential employee or employee’s salary negotiation.

Rather than provide a dollar value that results in setting a salary negotiation anchor you could say something like…

Best Answer for Salary Expectation in an Interview

“I’m excited about this position. Unfortunately, at the moment I don’t have enough information about the duties and responsibilities.

 

What is the salary range for the position?

 

{You’re given the range}

 

Alright, let’s set [$X, the top of the range] as a placeholder for now and we can work together to figure out the absolute right number when the company knows more about my skills and experience and how they relate to the job’s responsibilities and when I know more about the position.”

🚫 (Bad) The top comment states, “Depending on the strength of the company, they will either a) give you what you want or b) give you a bit less — in my experience it’s never usually more than about 10% less than what you stated.” The recruiter confirms that sharing a salary expectation results in the creation of an anchor used by the company to benchmark and decide what base pay they will offer you. In addition, they state “in my experience” but do not share what market they recruit for, the job family they recruit for (i.e. role seniority), and/or the demographics of the people they typically recruit. Demographics shouldn’t matter but they do. If the person is typically hiring White men and saying the company will offer 10% less than what is asked for then this advice is only relevant to White men as Women, Black, and Latine professionals are statistically paid less than White men. It is dangerous to give blanket statement salary negotiation advice when many variables factor into a salary negotiation. 🚫 (Bad) Advice to make a counteroffer is given but they do not mention the need to confirm that the offer is negotiable. Making a counteroffer without confirming that the offer is negotiable can surprise the person you are negotiating with and even cause them to be placed on the defensive. In extreme circumstances, if the offer was hyper competitive and/or the person went out of their way to present an offer they thought you would appreciate, the offer can be rescinded. 🚫 (Bad) The top comment’s advice to counteroffer is to target the “middle point.” This is very bad advice especially if an offer is not standardized and not calculated using a formula. An unstandardized offer can be biased resulting in the recipient making a counteroffer on an offer that is low based on a perception of their value rather than their value in the market based on their experience. The middle point on an offer can be very different depending on gender and race. Statistics demonstrate women, especially women of color are paid less than White male peers performing the same job duties. If a person who receives a low offer applies this advice they will end up being paid below market. The appropriate dollar value to counteroffer is based on the company’s formula to set base salary (i.e. using the city the company uses to benchmark compensation) and what companies at the same stage pay a person with your level of skills, education, experience, and track record of success to complete the job’s duties. It is very reasonable to use market data and personal performance data to make a counteroffer that is higher than the “middle point.” 🚫 ❌ (Very Bad) The top comment advises “accepting a lower salary gives them more room to give you raises in the future…” You should never accept a lower salary to give room for raises. In this case, this advice favors a recruiter trying to place you into a position and fulfill their job duties “under budget.” The salary you accept should reflect what the market is currently paying. Whatever raises you receive down the road should reflect what the market is paying at that time for someone with your skills, experience, and the value of your contributions to the company. In the case that the company has a poor pay raise policy where all employees get X% of a pay raise then accepting a lower salary upfront will result in you always being underpaid. This is very bad advice. 🚫 ❌ ⚠️ (Bad and Potentially Illegal Advice) The top comment says to share your salary history. The response states “And I wouldn’t recommend lying about your last salary either — I have had clients ask for W-2’s to verify your previous salary, so my advice would be to not risk it.” It is illegal to ask for salary history in 21 states. Moreover, sharing salary history creates an anchor that will result in a lowball offer. If you are asked for your salary history you can professionally decline to share your salary history without derailing your salary negotiation. For example you could say something like…

Salary History Answer (Example)

“I believe it’s very important to maintain the confidentiality of my current and former employers. I’m not comfortable sharing my salary history.

 

In addition, the job functions are not the same and the company type and size are different. Any comparison would be apples to oranges.

 

On the topic of salary, I’m interested to learn how the company calculates pay. What formula do you use to calculate base pay and annual pay increases?”

In this statement you are presenting yourself as professional by wanting to maintain employer confidentiality. Additionally, you flip the question to gain information on how the company “calculates base pay” signaling you’re looking for a company that has equitable compensation practices.

As outlined above when searching for things like “How to negotiate salary Reddit” it’s important to use the information you’ve learned in this guide to filter out outdated, biased, and generally bad advice.

How to Negotiate Salary (FAQs)

How to Negotiate Salary (FAQs)

How to Negotiate Salary (FAQs):

What is a reasonable amount to negotiate on salary?

A reasonable salary amount to negotiate for is the dollar value difference between what you are offered or currently paid and what companies at a similar stage are paying someone with your skills and experience to perform the same job duties and responsibilities.

If the offer is low or you’re underpaid this amount may feel like a lot but if the amount reflects the difference between what you are paid and what the market is paying then it is reasonable.

Let’s walk through an example.

In this example:

  • You work as an entry-level Quality Assurance (QA) Engineer in San Diego, CA
  • Your company determines salary using markets rates from San Diego, CA (not another city where the company is headquartered)
  • The average current salary for an entry-level QA role in San Diego, CA is $74,900.00
  • You’ve been at the company for 1 year and 2 month
  • You’re base salary is $69,400.00
  • You overhear a conversation in which the entry-level QA engineer with no experience is being compensated $75,560.00 (above market average)

To prepare to negotiate a reasonable amount you want to factor in:

  • The difference between what is paying paid to new entry-level roles without experience $6,160.00 ($75,560.00 – $69,400.00)
  • What companies at a similar stage are paying for a QA Engineer with 1 year of experience
  • What the market is paying for someone with your skills, experience, and achievements

Continuing on in our example, let’s say after we do our research we determine that companies in San Diego, CA at the same stage as our current company are paying $82,125.00 for someone with our skills (including bilingual contributions), experience, and achievements.

The reasonable base amount to negotiate for is $12,725.00. The formula for this amount is:

  • $6,565.00 + $6,160.00
    ($82,125.00 – $75,560.00) + ($75,560.00 – $69,400.00)
    The difference between what companies are paying for someone with 1 year of experience and your skills, experience, and contributions plus the difference between what the company is paying new entry-level hires in the same role as you minus what you are earning.

If you discover other people with equivalent skills and experience hired at the same time as you were paid more you could also negotiate for back pay and frame it as “correcting oversight.”

It is absolutely reasonable to negotiate for any amount, even if it seems high, if the amount can be supported with market research data and personal performance data.

How do you counter offer a salary?

To successfully counter offer salary:

  • Research what companies at a similar stage are paying for people with your level of experience to perform similar job duties and responsibilities
  • Confirm that an offer is negotiable
  • If an offer is negotiable make a counter offer by expressing your enthusiasm for the position and your gratitude for the opportunity to negotiate
  • Present a specific dollar value counter offer
  • Present quantified reasons as to why the specific dollar value amount reflects your value in the market
  • If there are budget constraints be prepared with areas of compromise such as additional paid time off (PTO) or a larger signing bonus
  • When you reach an agreement make sure to get all details in writing

How to negotiate salary sample

Negotiating salary is not something we do often. To help you become familiar with the process here is a how to negotiate salary sample:

“I’m very excited about the potential of starting as the new Executive Assistant for Ms. De Leon and Ms. Escobedo at Unicorn Company. The role aligns well with my skills, experience, and career goals. Thank you for the offer!

 

Based on my research of the market and other similar roles at companies that have raised a Series C round of funding, the offer of $102,500 is lower than I expected for someone with my experience.
In addition, the position requires the same Executive Assistant duties for two senior executives, not just one.

 

The position also requires drafting both of their internal and external presentations. I have created monthly stock report presentations for Fortune 100 CEOs by using my data analytics skills to analyze performance and accurately set projections.

 

Job duties also include managing travel logistics. In my past role I saved the company an average of $52,000.00 quarterly while upgrading accommodations by implementing a workflow of how travel is booked through the use of specific credit cards and companies.

 

A salary of $164,350.00 most accurately reflects what the market is paying for someone to be dual Executive Assistant and who has my skills and track record of success.

 

If you’re able to meet this number I can confirm that I can start next Monday, September 5th.

 

What do you think?”

In this how to negotiate salary sample:

 

  • Enthusiasm is expressed
  • Gratitude is expressed
  • The persuasive argument is rooted in market data and personal performance data
  • A specific dollar amount is asked for
  • A start date is provided to add a sense of urgency to help facilitate a mutual agreement
  • An open-ended question is asked regarding the counteroffer provided

A successful salary negotiation is dependent on the variables above. Each variable strategically helps to confidently and professionally negotiate salary.

Is it rude to negotiate salary?

No. It is not rude to negotiate salary. In fact, it is expected that you will negotiate salary when you are offered a job. In a 2021 survey of 324 organizations 90% of employers said they are willing to negotiate salary. Employers are open to negotiating salary and many make intentionally low initial offers expecting a salary negotiation. Unfortunately, despite the expectation of a salary negotiation 58% of people accept job offers without negotiating. This results in leaving upwards of a million dollars on the table over the course of a career. It is not rude to negotiate, companies expect a salary negotiation. Just make sure to graciously confirm an offer is negotiable before making a counteroffer. Confirming that an offer is negotiable and getting the green light to negotiate sets the foundation for a positive salary negotiation.

How do you respond to a low salary offer?

If you receive a low salary offer the process to negotiate a higher salary is to:

  • Thank the employer for the offer and request time to review it
  • Research what other companies at the same stage are paying someone with your skills, experience, education, and track record of success to complete the job’s duties
  • Create a list of your quantified achievements as they relate to the duties and responsibilities of the job
  • Use data from your market research and personal performance data (i.e. list of quantified achievements) to set a base pay “moonshot” goal to negotiate for, your must-have base pay minimum (i.e. the minimum dollar value you will accept or you will walk away from the offer), must-have benefits and job perks, and nice-to-haves
  • Confirm that the offer is negotiable
  • Present a counteroffer using data-driven word economy
  • Use your nice-to-haves to work with the employer to find a mutual agreement
  • Get all agreed-to final details written into your Employee Offer Letter
  • Thank the employer

The best way to get a higher offer is to use data to make logical counteroffers while being gracious and friendly. Each of these actions increases your credibility and likeability which help to facilitate a positive outcome.

What happens if you ask for too little salary?

If you ask for too little salary and don’t correct the error you will end up leaving a lot of money on the table over the course of your career.

It is not impossible to fix the error however it can be difficult based on the personality of the person you are negotiating with and their employer salary negotiation persona.

If you realize that you asked for too little salary, be honest and let the employer know you would like to revise what you asked for based on new market research data.

To fix the error of asking for too little salary you could say something like…

“I’m really excited about this opportunity and would love to get started on [Insert Date]. I previously asked for $X however based on new market research I’d like to revise that ask to $Y. This number better reflects what companies at a similar stage are paying for someone with my skills, experience, education, and track record of success.”

Should I accept the first salary offer?

Unless an offer is presented as “best and final” or “non-negotiable” you should never accept the first salary offer. Most employers expect a salary negotiation and 90% of employers say they are willing to negotiate salary. On average making just one counteroffer increases an offer by 7.4%. Accepting the first salary offer is a mistake that can result in leaving $1 Million on the table over the course of a career.

How do you negotiate more money after accepting a low salary?

Negotiating more money after accepting a low salary is not impossible to do but it is difficult to do. It can cause the employer to become annoyed and defensive. In the worst case scenario they may even rescind the offer you accepted.

Negotiating more money after accepting a low salary is very delicate as the employer already thinks “the deal” has been made. To negotiate more money after accepting a low salary offer it is important to be honest you could say something like…

“I’m really excited about this position and to start on [Insert Date].

 

In my excitement I overlooked some data that reflects what companies at a similar stage are paying for someone with my skills, experience, education, and track record of success.

 

My starting salary has been set at $X however based on new market research I’d like to revise it to $Y.

 

$Y better reflects what the market is paying for someone with my experience. Can we revise my starting salary to better reflect what the market is paying?

 

I apologize. I let my excitement get the better of me and appreciate it if you would be open to working with me on this. Is this something we can do?”

 

This statement:

  • Expresses excitement to start the job
  • Shares that you made on error
  • Communicates you have data that supports the revision of your base salary
  • Is humble
  • Is gracious

It is important to note that it may not be possible to negotiate a higher salary once the job has been accepted. In this case it is important to consider if you are willing to accept a job in which you will be underpaid (and the employer is aware that you are aware that it is underpaid).

Can negotiating salary backfire?

Yes, a salary negotiation can backfire. The two top reasons a salary negotiation backfire are:

  1. Not being prepared
  2. Being argumentative not persuasive

There are a few things you can do to prevent a salary negotiation from going awry and backfiring:

  • First, do your homework and come to the negotiating table armed with data about salaries for comparable positions in your industry. This will give you a realistic sense of what you should be earning, and it will help you to avoid over- or under-shooting your target number.
  • Second, make sure that you communicate your qualifications and value to the employer before entering into salary negotiations. This will help to prevent the employer from low-balling you, as they will already be aware of your skills and experience.
  • Third, confirm that the offer is in fact negotiable. By having the employer say “Yes” you are setting the stage for a negotiation that you are both aware you are in. If you start negotiating and the offer isn’t negotiable it can cause the employer to become annoyed, angry, and defensive.
  • Finally, don’t get emotional during the negotiation process. Never make threats or give ultimatums. Try not to get too attached to a particular number. This can lead to tunnel vision and not allow you to see other ways to negotiate total reward variables like stock options that get you to the compensation number you want.

By following these simple tips, you can help to ensure that your next salary negotiation goes smoothly – and doesn’t backfire.

Does hiring manager decide salary?

A hiring manager can be a person who decides salary. Who ultimately decides salary in a company depends on the company’s processes. Some hiring managers have complete autonomy while others may need to get a department head and/or HR to sign off on an offer.

If you’re unsure who makes the salary decisions for your role – ask. You can ask something like “Who in the company is involved in the salary decisions for this position?” The answer to this question will help you clearly understand if the hiring manager decides salary.

Do recruiters expect you to negotiate salary?

Recruiters may work internally for a company or be an outsourced third-party vendor. A recruiters expectations regarding salary negotiation will depend on how a company uses its recruiters. Some companies will use recruiters as an intermediary and point of contact to make job offers while others will just use recruiters to fill a pipeline with qualified potential hires.

A recruiter may not expect you to negotiate salary; they will however expect you to share your salary expectations. Sharing your salary expectations greatly impacts your salary negotiation outcome.

They will expect you to share salary expectations because it’s their job to fill the new hire pipeline with applicants that meet certain parameters, a defined salary range is one of these parameters.

A recruiter will use salary expectations to: 1.) see where your expectations fall within their hiring budget, and/or 2.) set an anchor for a salary negotiation (that is conducted by someone else using information they share, they help facilitate as a go between, or that they conduct).

To prevent setting an anchor that can result in a low offer it’s best to never communicate salary expectations with a recruiter. Rather ask the recruiter for the budget for the position or the position’s salary range.

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