Salary Negotiating 101:
Salary Negotiating 101 shows you how to negotiate your pay from a position of strength, armed with documentation of your accomplishments, your value to your organization and research on salary comparisons in your industry.
Think you deserve a raise, but are afraid to walk into your boss's office and ask? Don't let ineffective negotiation skills hold you back. Business Management Daily, publisher of Administrative Professional Today and the Your Office Coach blog, created this report to show employees at all levels how to boost their career earnings by following the rules on negotiating a raise, hashing out the best pay package in a job offer negotiation and knowing their market value.
Salary Negotiating 101: Secret #1
Negotiating a raise: Do your homework first
Few job situations prove riskier than negotiating a raise, especially in these lean economic times. Most employees—no matter what their job titles—feel apprehensive about asking for a raise, especially when companies are so occupied with trimming costs.
Even though your organization's financial condition and the general economy will factor into your salary negotiating, that shouldn’t stop you from asking for the raise you deserve. And keep in mind that if you’re a good employee, your boss is likely to do what he or she can to get you a merit raise.
The best strategy: Make sure you can demonstrate some tangible work-related reasons that warrant a raise, and give a realistic picture of ways your work will continue to benefit the organization.
Proceed methodically, have a well-planned strategy and, above all, do your homework.
Discover strategies for determining your market value, assessing salary ceilings and how to best approach a formal raise negotiation in Salary Negotiating 101.
Salary Negotiating 101: Secret #2
Negotiating a raise: 10 tips for making your pitch
1. Get down to business quickly. State simply that you're here to negotiate salary, and present the documentation you have prepared.
2. Start with a point you can both agree on.
3. Present a solid record of your accomplishments and rely on it as your key salary negotiating tool.
4. Offer documentation, such as complimentary letters or emails and other forms of recognition from customers, co-workers or supervisors.
5. Keep your tone positive. Present your raise as a win-win situation.
6. Offer a salary proposal without waiting for your boss to take the lead. Be aware of any salary ceilings, but aim high. Any documentation you have about comparative salaries in other organizations can support your case.
7. Control your body language and don't be afraid of silence. Although it can be uncomfortable, silence allows both you and your boss to digest what has been said and to consider the direction the conversation should take.
8. Repeat facts if necessary.
9. Don't latch onto the first offer.
10. End on a positive note. If you are leaving the session with a raise in hand, ask when it will become effective. If you have not been so successful, ask when you and your boss can negotiate salary again: in three months, six months?
Salary Negotiating 101: Secret #3
No firm offer? Making a win out of a loss
If you're about to emerge from your bargaining session without a firm offer of a raise, strive for a conditional agreement.
You might ask whether you can negotiate salary again if you reduce staff absenteeism by 10%, for example, or increase the number of orders processed in your department by one-third.
Put together a list of projects you would like to undertake, along with profit or cost-saving projections, and present them when you negotiate salary again. This puts your request within the context of increased profits and lowered costs—boosting chances that your boss will stretch company norms to get you the most money possible.
Salary Negotiating 101: Secret #4
Check out salary comparisons
Make sure to do your research on salary comparisons.
Tip: Don't overlook informal information sources. Job advertisements sometimes indicate salaries, and while others in your professional network may be reluctant to tell you their earnings, they might share their salary scales.
Find out which salary survey sites Business Management Daily rates among the best in Salary Negotiating 101.
Salary Negotiating 101: Secret #5
How to get past the no-raise barrier: Counter 4 common objections
When reaching for that elusive raise, look upon the first "No" as Round 1. Then step back and explore other raise-negotiating methods.
In particular, learn how to counter the four most common objections you're likely to hear from a boss:
Objection 1: "A raise would put you above your job category maximum."
Advice: Point to your industry's pay scale. Don't compare your pay to that of others in your company. Cite salaries for comparable positions elsewhere.
Objection 2: "You already earn more than anyone else in the department."
Advice: Here's how you should frame your reply: "I may be making more than the rest, but don't you agree that if I work harder and accomplish more, I should be paid more?"
Objection 3: "The company has had a bad year."
Advice: Ask when things are expected to turn around, and if they do, what impact that will have on salaries. Faced with an ironclad ban, ask about rewards in other forms—for example, more vacation time or flexible hours.
Objection 4: "I'd like to give you more money, but odds are a raise won’t be approved."
Advice: Ask your boss to outline specifically what you have to do to get a bigger raise. Then establish a timetable for evaluation.
Salary Negotiating 101: Secret #6
Job offer negotiation: How to secure the best pay package
If you're trying to secure the best deal to join a new employer, don't be bashful. Your tenacity shows the kind of confidence and self-assured leadership that can enhance your stature from the outset. Many recruiting managers respect candidates who drive a hard bargain.
Here are 7 guidelines to follow when hashing out your pay package:
Salary Negotiating 101: Secret #7
Heed annual salary forecasts, economic trends
It pays to keep informed on key economic trends as most pay raises are at least partially tied to economic indicators—both nationally and locally.
For example, here’s a positive trend to note: Aon Hewitt found that the number of companies freezing salaries was down for the second year in a row in 2011, with the trend expected to continue in 2012. Only 5% of organizations froze salaries in 2011, compared to 21% in 2010 and nearly half (48%) in 2009. Approximately 4% of employers anticipate salary freezes in 2012.
Another trend: Smart employers aren’t handing out flat, across-the-board raises. Increasingly, employers are expanding pay-for-performance programs and giving greater increases to top performers.
A survey of 773 U.S. companies conducted by Towers Watson Data Services found that workers who receive the highest performance ratings will be in store for median salary increases of 4.5% in 2012—80% more than workers with average ratings will receive (2.5%). Workers with below-average performance ratings will receive median merit increases of only 1.4%.
Towers Watson’s survey also found that employers plan pay increases averaging 2.8% in 2012 for their salaried, nonexecutive employees. This represents a moderate increase from the average 2.6% raises for workers in both 2011 and in 2010. Similar raises for 2012 are planned for executives and nonexempt employees.