The first step to successful salary negotiation is finding out what you should be paid
Think you’re underpaid or want an salary increase? Or even if you’re about to negotiate your starting salary package. In any negotiation it helps to have some facts. The problem with salaries is that there are so many variables. Factors such as location, experience, qualifications etc. make it difficult to work out what you should be paid. This article will explain how to find out your market rate. Additionally when you go into a salary negotiation focusing on price, this becomes a confrontational exercise of dividing value based on a power struggle. We will also show you how to get paid more by taking money out of the discussion.
What are you worth?
Well I’d like to say that if you’re reading my article and you’re curious and developing yourself then I think that you are awesome. You are unique, irreplaceable and I’d never want to place a monetary value on you. But your employer does place a value on you based on the (perceived) value you create and compared to the market. Creating value and perceived value is what I cover in salary negotiation. But first let’s start with the market value.
The job market works a lot like other markets. It’s subject to the forces of supply and demand and the same item can command different prices in different locations.
Factors that affect pricing in the job market include:
- Job title,
… and the list goes on.
Plus these factors are continually changing. That’s why it’s so difficult to work out what a market rate is. The best thing is to use a salary calculator service that continually monitors all of these factors. A salary calculator that I’ve had success with in the past is: http://www.payscale.com/wizards/choose.aspx?TK=about_sstart (and it’s currently free)
Salary negotiation – the role of value
There are two components to value in negotiating: Maximizing value and perceived value.
Increasing the Pie – Value Maximization
Some people think negotiating is about extracting the maximum amount of value from the other party. But this is just divisive negotiation and results in confrontation and bad feelings after the negotiation. Not the way you want to start a new job! It’s better to increase your share by increasing the size of the pie.
In a salary negotiation this is done by understanding what is important to each party. For example flexible working conditions could be extremely valuable to an employee but cost nothing to the employer.
The Role of Value Perception in Salary Negotiation
The frustrating thing about new employers is they don’t know what you are capable of. They offer you a salary that you think under-values you but as far as they’re concerned they’ve made a fair offer and they see no reason to offer you more. Avoid this stand-off confrontation by moving the job negotiation away from a discussion about money. This is a highly effective salary negotiation technique.
In a salary negotiation, arm yourself with the facts to know where you stand. As in any negotiation you will do better when you can increase the size of the pie for both parties. And how you go about communicating your value is as important as the value you bring.
Do you have any comments, tips or suggestions for successfully negotiating your salary? Help the rest of us out by sharing in the comments below.
The Interview Success Series
This is part of the Interview Success Series. This series covers how job seekers can get the job they want. This series contains inside information from experienced recruiters.
Interview Preparation Coaching:
Are you a job seeker about to interview? Find out how to prepare for your interview here.
Making the step up to boss? Find out how in WWW.BOSS.CAMP. The program includes topics such as:
- How to motivate employees,
- What are bad employee motivators,
- What you must do as a manager but isn't on your job description,
- How leaders get power.