“Show me the money” as Rod Tidwell says in the movie Jerry Maguire. In this economy, knowing how and when to negotiate your salary is literally worth thousands of dollars. Here, Michelle Marks, MS ’93, PhD ’98, associate provost for graduate education in the Provost’s Office and associate professor of management in the School of Management, shares her insights on how to increase your starting salary, which she culled from a survey she recently co-wrote with Crystal Harold, Fox School of Business, Temple University.
1. Don’t skip the negotiation.
Our study found that those who negotiate increase their starting salaries on average by more than $5,000 than those who don’t. Over a 40-year career, this figure translates to more than $600,000 worth of earnings you would miss out on if you chose not to negotiate for a higher salary. Furthermore, research shows that most recruiters and employers are prepared to negotiate, so you are leaving money on the table by not trying.
2. Your approach to negotiating matters.
Be assertive and collaborative. Listen carefully to understand what the organization wants; try to incorporate their interests in your counteroffer. If they say they can’t do better on base pay, suggest a larger bonus structure or another creative way of achieving your interests. Make your interests known to the organization, and ask for what you want. And always do your homework before you negotiate. What can you find out about the salaries that people are currently making in the organization that wants to hire you and within the industry? If their offer is below the industry average, you can present industry data to strengthen your counteroffer.
3. Know your leverage points and your bottom line.
Do you have other job offers? Having other job offers gives you more power in a salary negotiation. Are you interviewing elsewhere? In other words, do you have an acceptable Plan B if this job does not work out? If so, sharing this information in an open (but not boastful) way can be helpful. Having an acceptable fallback plan (staying put or taking another job) takes some risk out of advocating for what you want. Also, knowing your bottom line ahead of time tells you when to stop negotiating and keeps you from agreeing to something you will feel badly about later.
4. Trade concessions.
If you are asked to concede to a lower salary than you want, try asking the employer to concede on something. For example, a shorter time until your initial performance review could result in an earlier salary increase.
5. Think about negotiating your entire starting package, not just salary.
Organizations that have less flexibility to pay higher starting salaries may have wiggle room elsewhere. Are there nonsalary factors such as training opportunities, travel, office location, vacation leave, or telecommuting that would make the job more attractive? Will the organization pay your tuition to go back to get a master’s degree? The ability to work from home one day each week can save you money and the hassle of a commute. Or maybe an extra week of vacation is just as valuable to you as a higher starting salary.