Knowing how to negotiate salary is a skill every employee should possess, as it can help them receive the compensation they deserve. Yet, most employees avoid negotiations for fear of offending their employers or sounding overly entitled.
However, none of this is a concern when you understand how pay negotiation strategies work. In this article, we will explore them in depth, discuss common negotiation mistakes, and teach you when it is the right time to ask for a salary raise.
Key Takeaways
You can negotiate your salary after receiving a job offer, during a performance review, when taking on new responsibilities, and after market value shifts.
Prepare for salary negotiations by researching your market, gaining a better understanding of your own worth, setting your numbers, and practising your pitch.
If your proposal is rejected, remain calm and consider asking for a compensation package or other perks instead.
Avoid accepting the offer too quickly, becoming too aggressive, undervaluing yourself, or relying on a verbal offer.
When Can You Negotiate Your Salary
There are several instances when you can negotiate your salary. Let’s take a quick look at each of these situations and uncover why they are good opportunities:
#1. After Receiving a Job Offer
Before you even receive a job offer, you’ll likely be asked to discuss salary expectations during an interview with recruiters. At this stage, you should mention a specific range, but leave further negotiations for another time. After all, it’s not wise to focus on salary before you’ve completed the recruitment process.
However, you can and should negotiate salary once you are officially invited to join the company. In most cases, the employer will offer a pay rate at the lower end of the range you mentioned during the interview. It’s up to you to convince them to bump it to the higher end.
#2. During a Promotion or Performance Review
Promotions and raises go hand in hand, but your employer might offer you less than you believe you deserve. In such a case, you should negotiate your salary; it’s a perfect opportunity, considering that your efforts and contributions are clearly recognised.
You can also discuss your salary during a performance review, especially if you receive positive feedback. Even so, don’t expect the employer to accept your proposal immediately; prepare a pitch that highlights your achievements in the past six months.
#3. When Taking on New Responsibilities
New responsibilities should come with a salary increase, as you’ll likely need to acquire a new skillset and invest more time and energy in your work. If your employer doesn’t recognise that on their own, you should remind them by having an honest conversation about your salary expectations.
#4. After Market Value Shifts
Lastly, you can negotiate salary when the typical ranges for your role change, and your pay no longer reflects the standard. This, of course, requires that you keep up with the industry trends, so stay in touch with other professionals in your field and thoroughly prepare your talking points for the negotiation.
How to Prepare for Salary Negotiation
To prepare for salary negotiation, you should research your market value, know your worth, set your numbers, and practise your pitch. Taking these steps increases the chance of persuading your employer that you deserve a pay increase.
Now, let’s examine these salary negotiation tips in more detail:
#1. Research Your Market Value
Your salary expectations during negotiations should be realistic, so it's essential to conduct thorough research beforehand. Look into typical salary ranges for your industry and, more specifically, for your role to determine how much you should be asking for.
This information can be found on websites such as Glassdoor or PayScale, which require you to input your profession and location to calculate your expected salary range. These sites typically use government data and information obtained from their user bases to perform calculations.
In addition, you can reach out to your professional network and ask for salary advice. This approach is especially useful if you know many people in your area who hold the same position as you.
#2. Know Your Worth
Once you know what a fair salary is in your industry, you need to determine your own worth by evaluating what you have to offer to the employer.
Consider the following:
Years of experience. The longer you’ve worked in the field, the higher your salary should be, especially if your experience exceeds the requirements. For instance, if the job description states that ideal candidates should have five years of experience, but you have more, you are entitled to ask for higher compensation.
Education level. Candidates and employees with BAs, MAs, or PhDs often receive higher salaries than those without any degrees. Of course, this applies only to relevant degrees that guarantee you possess specialised knowledge in the field you’re applying for.
Skills. Specialised and technical skills typically attract higher salaries, since they aren’t so easy to find. Consider which unique skills you bring to the table and prepare to use them as a major talking point.
Certifications. If you possess all the certificates your employer requires, you have a good basis for negotiating a higher salary.
#3. Set Your Numbers
Next, you need to decide on your ideal salary, acceptable pay, and an offer that would make you walk away.
Of course, your goal is to convince the employer to match your desired compensation, but if that’s not possible, you should have alternatives. That’s what acceptable pay is for; a realistic salary that works as a compromise between your and your employer’s wishes.
However, you shouldn’t settle for just any offer, especially if it’s significantly below your original expectations. Set boundaries from the start and stick to them; otherwise, you risk appearing insecure in your own worth and opening yourself up to future mistreatment.
#4. Practise Your Pitch
Lastly, to make a successful salary increase request, you should practise your pitch in advance. Preparation will help you sound more confident and convincing when you face your employer, and you’ll be less likely to forget important talking points due to anxiety.
If possible, ask a friend or a family member to help you practise and conduct mock negotiations. If you can’t find any volunteers, practise in front of a mirror or record yourself talking. Review the footage to see how you come across and whether you need to work on your tone, expressions, or posture.
How to Negotiate Salary After a Job Offer
Negotiating salary after a job offer may be challenging, as your employer doesn’t know you yet and doesn’t have concrete proof of your worth. As a result, you need to be particularly convincing and elaborate on your past achievements with as much concrete detail as possible.
Here are some good tips to keep in mind:
Salary Negotiation Tips
Reiterate your value as a professional. If your employer’s offer doesn’t align with your expectations, remind them of the skills and knowledge you bring to the table. Back up your claims with specific results you’ve achieved in the past if you want to be particularly convincing.
Take your time to review the offer. Ask your employer whether you can think about the offer and let them know at a later time. In most cases, they will agree, and this will give you some space to calmly consider your options. They might even follow up with a better offer to ensure you don’t choose another company.
Now that we’ve covered this, let’s see what exactly you should say during salary negotiation:
What to Say During a Salary Negotiation
“First and foremost, I want to thank you for this opportunity and reiterate how excited I am to start working for your company. However, before I accept your offer, I want to address the proposed salary.
Based on my [X] years of experience in [Your Industry] and the skills I will bring to your company, I was hoping to bring my salary closer to [Target Number]. After all, in my previous position, I achieved/managed/reached/exceeded [Specific achievement backed by concrete numbers].
I am open to discussing alternatives, such as additional stock options, extra vacation days, and increased performance-based bonuses. I’d love to hear your thoughts.”
How to Negotiate Salary During Your Performance Review
Negotiating salary during a performance review gives you a bit more leverage, as your employer knows about your contributions and achievements. As a result, you can easily steer the conversation towards a pay increase and are more likely to be successful.
Still, here are a few tips to remember:
Salary Negotiation Tips for Performance Reviews
Be realistic. Even if you believe you deserve a significant raise, you need to consider how much your company can give you. As an employee, you’ll have at least some insight into its financial standing and budget constraints, so don’t set your expectations too high if they can’t be met.
Prepare for pushback. Your employer might claim that the budget doesn’t currently allow for a raise or try to delay the conversation for another time. In such a case, steer it towards alternatives; talk about other compensation options that could serve as substitutes for a raise.
Now, here’s a simple script you can follow when negotiating salary during a performance review:
What to Say in a Performance Review
“Thank you for your feedback. I am glad to hear that my contributions to the company have been positive. With that in mind, I’d like to discuss my salary and see whether we can adjust it to reflect my achievements and responsibilities.
I’ve done some market research, and considering that I’ve worked at this company for [X] years and exceeded expectations in the last quarter, I believe a more appropriate salary would be [Target Number]. I am open to negotiation, and I hope we can reach a mutually beneficial agreement.
What If They Say No?
If they say no, you can’t react aggressively or emotionally; that would be immature and certainly damage your professional reputation. Instead, you should remain calm and polite, regardless of your true feelings.
Other than that, you can also:
What to Do If They Say No
Ask for their reasoning to learn if there’s anything you might improve before the following salary review. Listen to the feedback carefully and implement the suggestions over the next few months to get the desired raise.
Negotiate non-monetary perks, such as extra vacation days, increased bonuses, stock options, or additional work-from-home days.
Know when to walk away from an offer that doesn’t benefit you and when to accept it. If none of your expectations are met, and your employer isn’t willing to compromise, perhaps it’s time to look for a different workplace that might appreciate you more.
5 Mistakes to Avoid in Salary Negotiation
Salary negotiation can be intimidating, but avoiding common mistakes can improve your chances of securing the compensation you deserve.
Let’s take a closer look at each to help you avoid them:
#1. Accepting Too Quickly
Always take the time to carefully consider the offer before accepting it, even if it initially seems appealing. This extra time gives you an opportunity to research the market and talk to other professionals in your field. Then, you’ll understand whether the offer is actually acceptable and prepare your counteroffer if it’s not.
#2. Being Too Aggressive or Emotional
Lashing out at your employer when negotiations don’t go your way is highly unprofessional and may significantly impact your reputation. In fact, you may even put your job at risk, depending on what you say. And if you’ve just received a job offer, it’s likely to be retracted.
So, keep your cool and don’t take anything to heart. If you believe you’re being treated unfairly, it’s better to walk away instead.
#3. Undervaluing Yourself
If you don’t believe in your own value, your employer has no reason to, either. In fact, it’s even better for them; they can pay less for excellent performance. To avoid this, be realistic; look into how much professionals with your skills and experience earn and don’t try to be humble. Ask for what you really want, as long as it’s within the standard range.
#4. Not Getting the Offer in Writing
Don’t settle for a verbal offer; they are easy to misremember, whether accidentally or on purpose. There’s also no proof of what you’ve agreed on, so your employer can easily change terms in a way that’s less beneficial for you.
However, written offers are legally binding and can’t be easily misinterpreted or ignored. Ideally, your employer will issue you one on their own; however, if not, you should insist on it.
#5. Ignoring the Full Compensation Package
When negotiating salary, most people overlook the fact that financial compensation isn’t the only option available to them. Remember that you may be entitled to additional benefits, and discuss those, too, highlighting how they can be a powerful motivational tool.
Create a Job-Winning CV Within Minutes
Salary negotiations are only possible if you secure a job, and to do that, you need an excellent application. Use our CV builder to create one in less than 15 minutes by following simple steps and entering the required information.
If you don’t want to fully rely on our builder, browse through our CV examples instead. We offer a range of options for various industries, so you’re sure to find something that inspires you.
Final Thoughts
Now that you know how to negotiate salary, we wish you luck in your future performance reviews and discussions with your employer. Remember to stay calm, composed, and professional, no matter what happens; rejection is usually not personal and often depends on numerous factors.
Before you can negotiate a salary, you need a job, and this is where our CV templates come in. Select the right one for your desired industry and role, complete it, and submit it to recruiters immediately. You’ll receive an interview invitation in no time!
How to Negotiate Salary FAQ
#1. Is a 20% counteroffer too much?
A 20% counteroffer is closer to the higher end of the acceptable range, but it’s not necessarily too much. When negotiating, it’s recommended that your counteroffer is 10–20% higher than the initial offer, but you can expect your employer to push for the lower end of the range.
#2. Can you lose a job offer by negotiating salary?
You won’t typically lose a job offer by negotiating salary, as most employers expect candidates to do this and don’t consider it offensive. However, your attitude during the negotiation can impact your image and lead to the retraction of an offer, especially if you’re rude, aggressive, and unprofessional.
#3. What should I do if the company says the offer is final?
If the company says the offer is final, you should consider whether it is acceptable enough for you to stay or if you should walk away. The third option is to negotiate benefits instead of the salary itself, so try that before deciding what to do next.
