How to Negotiate and Win!
Negotiation. Some of us love it, some of us hate it. We are continually negotiating with the people and world around us, yet many of us don’t feel comfortable negotiating where it matters most; where we spend 40+ hours per week. Stick with me, and I’ll show you why and how to negotiate and win!
The Impact of Negotiating (or not Negotiating)
Let’s say you started a new gig five years ago. You were grateful to receive the job offer and didn’t want to ruffle any feathers by pushing too hard. It’s understandable. But did you realize how much money you were leaving on the table?
Assume the starting salary/pay is $50,000. Also assume that since then, everyone in the company has received a 2% per annum raise for inflation. What’s your current salary after five years (start of the sixth year)?
Here’s a handy online calculator to do the math for you.
You now have a $55,204.04, which is 10.4% higher than you started.
What if you negotiated a 10% pay raise before you started that new job, where would your salary be at now?
This new ending salary of $60,724.44 is 21.4% higher than your initial salary offer! Would you instead have the 10.4% pay increase or 20.4% increase five years from now?
Realistically, you’ll probably have a promotion in there. If you negotiated on your way into a company, you’re more likely to negotiate for a higher pay bump once you get promoted. You do not lose for negotiating!
Negotiating is About Respect
When you don’t negotiate, at all, your new employer (consciously or subconsciously) respects you a little less. You see, you’re your own Ari Gold, it’s YOUR responsibility to stick up for yourself and ask for that raise or that higher starting salary. If you don’t negotiate at all, it looks like you’re desperate for the work.
Granted, there are some jobs or contracts that have a fixed rate, and that’s it. I understand this. We’ll address this later.
Shift the Perspective
Before you run into your boss’s office, guns blazing, there’s something you need to know.
It ain’t about you.
Your boss or customer has a business to run. If they’re halfway competent, they’ll never pay you more than your value to the firm. Unless you do accounting for the firm, you’ll never know precisely what that value you bring is, in a quantifiable amount.
I bring this up, so you don’t run in and say you deserve a raise because of how hard you’ve worked or because you went to XYZ university or because your expenses went up. Common sense, but I’ve seen this happen.
Instead, figure out what value you bring to this current job or your new job.
What is Your Value-Add?
Hard working? Post-2008, it is expected of you to be hard-working. Between globalism and volatile financial markets, plus the memory of the last crash, everyone is hard working.
Did you go to XYZ school? Your mum’s proud of you, but that’s about it. Nobody cares. What do you bring to the table?
“I have a Princeton degree and work my ass off! I’m special!”
“I’m the only person here who can code, I help out with the accounting every quarter, and since I started, A metric has improved by B.”
Take your ego out of the equation and realize that you are a commodity. Become a hot commodity by understanding your business and the value that you bring to it!
It’s Not Just About the Money
Let’s say you’ve done all this, and they still won’t budge on salary. Do you stop negotiating?
Ask for additional company benefits, like a higher 401(k) match or a company car. While company cars are a somewhat antiquated concept now, you never know. Ask for flex hours so you can work from home on Fridays or for additional paid time off. Ask for your company to pay for additional training that will help you add more value to the company (and get a better job if your current company doesn’t value you).
I recently started a new job in an utterly different career-field: management consulting.
My new company tried low-balling me in their first offer.
So much so that I was shocked.
I responded that my background makes me especially valuable as a consultant and that given my years of experience as well as a graduate degree, I expect my compensation to reflect that.
My comp is up by 20%, and my starting rank is higher than the job they recruited me for.
Negotiate and Win
I know it can be intimidating, but it’s on you to represent yourself and maximize your career earnings. The better you are at this skill, the better you are in business, and the sooner you can retire early, or “make your nut.”
So, take a step back, go over the value-add that you bring to your work, and negotiate to win!