Looking for a new job can be very stressful for a myriad of reasons. Figuring out benefits, job location and pay rate are some reasons job hunting can be stressful. Pay rate, or salary can prove to be one of the most challenging parts of finding a new job. In most cases, deciding on a new job comes down to salary, after all, that is how we pay our bills and support our families. Some organizations are very transparent about their rates and what they can offer you for an annual salary, while others will give you a low-ball offer in an effort to increase their profit margin. Negotiating your salary can be a very intimidating task, but with the following tips you can feel confident when you approach the hiring manager for negotiation.
Protect Your Family’s Well-being First
There is no job or salary rate so enticing that you put it before your family’s needs and priorities. If you are single and you don’t have any family obligations, that’s a different story altogether. You are your family; you should make choices based on your family’s and your needs first. Consider your financial obligations such as student loans, car loans, church/charitable donations and mortgages/rent. If the salary offer does not meet or just barely meets your obligations, then you need to think about negotiating and sending back a counter offer. Knowing your financial obligations helps you to understand what salary rate would cover those obligations without leaving you living paycheck to paycheck, nobody likes doing that. As a side note, there is no reason to divulge why you need a certain salary. Do not divulge your personal financial information to them; they don’t need to know.
The 20% Rule
Almost 20 years ago when I was just starting out in IT and government contracting, an older gentleman who was just about to retire gave me some of the best advice I’ve ever received on salary negotiation. He said, “When a company gives you an offer letter, look at the salary and immediately add 20% to that rate and send it back as a counter offer.” That seemed like crazy advice. I thought they would take my counter offer and throw it in the trash. When I first looked for a new contracting job, I decided I would follow his advice. I was offered what I believed was a low-ball offer, so I added 20% and sent it back as a counter offer. To my surprise, they accepted my counter offer and sent back a final offer with the rate I wanted for me to sign! For 20 years now, I’ve used the 20% rule every time and have only had it not work one time – just once!
Don’t Get Put on the Spot
If you have ever been to a car dealer then you know the routine: The salesperson wants to keep you at the dealership and get you to agree to their price. The last thing a car salesperson wants to do is have you go home and think about it, but that is exactly what you should do. In the instance where you are sitting across from the HR representative and they have slid the offer letter across the table to you, if you don’t like the offer, don’t feel pressured to decide on the spot. It is perfectly okay to respectfully tell them you need some time to discuss the offer with your family/significant other. Of course, if it is the exact offer you want, and you are happy, then go ahead and sign it.
Be Flexible, but Firm
I know, it’s hard to be flexible and firm at the same time, but it can be done. The most effective salary negotiations happen with companies that will go back and forth with you on the rate and benefits. While your initial counter offer of their rate plus 20% might not get approved, they may come back with 15% plus a $5-$10k sign-on bonus. There are more ways to build a salary negotiation than just focusing on the dollar bills. Some companies will offer different perks like a bonus structure, some annually and other quarterly bonuses. Other companies might agree to pay 100% of your health insurance for you and your family, it just depends on what they can adjust on their end. What I’m saying is, be flexible, and don’t focus totally on dollars and cents. Instead look at the package as a whole. Work with the employer if they are willing to work with you – that is a good sign!
Don’t accept an offer or even a counter offer unless you are happy. The last thing you want to do is take a job because they offered you exactly what you wanted dollarwise, but the job isn’t challenging enough. Conversely, be open to taking a lesser salary if the job is exactly what you want and will make you want to get out of bed in the morning. Negotiating a salary is about more than just dollars, finding a job you love and one that will meet your financial needs is the best case scenario.