Negotiating a Starting Salary

At last! You applied for a new position, went through an interview (maybe even several), and now have an actual job offer. Like most successful applicants, you are thrilled and excited. However, you might feel the starting pay offered should be, well, a bit higher. What do you do now? You may be very skilled in your particular line of work, but negotiating salary might be way outside your comfort zone. Plus, you don’t want to appear ungrateful or mess up this opportunity over a few dollars, right?

Relax. Catch your breath. Negotiating an acceptable starting salary is usually just a normal part of the overall employment process. Nobody should be shocked or appalled if you try to bump up that dollar amount—so long as you do it reasonably and professionally.

Remember, the interviewer and human resources (HR) department have a responsibility to attract and hire the best possible employees at the lowest but appropriate price. Employers typically expect some salary negotiations before the candidate accepts. Therefore, they might lowball the first salary offer a bit so there is wiggle room to offer you more… if you ask. This way, in the end, you feel like you’ve negotiated a great salary deal and they’re still happy with what they have to pay. Sounds like a win-win to me!

Should I Have Discussed Pay Earlier?

No, usually not. Strategically, it is best to wait until you receive an actual job offer. Think of it this way. When the employer finally decides that YOU, out of all the other applicants, are the one they want, you gain some leverage in the negotiations. They also now have something to lose if they cannot negotiate an agreeable starting salary. They have invested time and money to find exactly the person they want to hire. Now, like you, they too don’t want the deal to fall apart over a few bucks.

During a job interview, be careful not to confuse obligation with negotiation. For various reasons, some organizations require their interviewers to mention a usual starting pay or pay range. They might say something like, “This interview is for a Level II position which has a starting pay level of $34.88 per hour.” Such a statement is typically NOT an invitation to begin salary negotiations. Again, wait until an actual offer is on the table, which puts you in a better bargaining position.

Evaluate Your Bargaining Position

Success in negotiating a higher starting salary also depends on what you bring to the table and what you can offer the employer. Consider an entry-level position that requires little or no experience and has only modest educational requirements. If you meet only the bare minimum requirements, you realistically have little negotiating power because you offer nothing more than any other qualified cookie-cutter applicant. Plus, other similarly qualified candidates might gladly accept the low starting pay offer—and the employer knows it.

On the other hand, when you bring valuable experience, skills, or education beyond that minimally required, which other applicants do not likely possess, you become more desirable to the employer. The question is really whether you can justify asking for more. And yes, sometimes you can.

According to the article Salary Negotiation: Always Ask for More or Take the Offer? on Military.com, “When I was a corporate manager, I rescinded offers when people tried to negotiate salary without sufficient justification,” says Gwen Ward, a principal at Fish Out of Water, a professional-development company in Leesburg, Virginia. “This revealed another view of their analytic skills that I apparently missed in the interview process. But in other cases, I met their counteroffers if their request was well-thought-out and leveraged their previous accomplishments to the department or company goals.”

If the organization values the extras you possess and wants those on board, they will be willing to pay more. Within reason, of course. So, what is reasonable?

Do Your Homework

I assume you have carefully researched the going market salary for the position you seek. You did this, right? If not, how do you even know whether the offered dollar amount is fair and reasonable? Suppose they offer $44,000 and you were thinking $85,000. In this situation, one—or perhaps both—parties obviously have very unrealistic expectations. You may have heard the expression “knowledge is power.” This is true! Knowing the going salary rate in your desired geographic area for similar positions in your industry will provide the power you need.

How does one find the market rate for a position? If you currently work in your field of choice, you may already have a good idea of an appropriate salary for your geographic area. Note that pay ranges can and do vary considerably by location, sometimes even within the same state. If you are considering taking a position in another location, especially in a distant state, be sure to research wage rates for that area, which may be higher or lower, usually due to the cost of living in that location.

Here’s an example. A coworker and I once attended a national conference attended by hundreds of participants from around the country, all of whom worked in our field. Since we had a car, we offered to give a ride to two other attendees who needed transportation back to the hotel. These individuals held the same positions as us and did the same kind of work. Along the way, the two, who were from a southern state, boasted about their excellent salary and, without being asked, proudly told us the amount. We didn’t have the heart to tell them that we, from the Midwest, were making twice that wage.

If you are considering moving or switching fields altogether, you may not have a good feel for an appropriate target salary. Here are some possible resources.

• Search online for job postings for your desired position. Some listings may include pay ranges.
• Some job listing sites, such as Indeed, Robert Half, and others, have searchable wage information as well as job postings.
• College career centers may have market wage rate information available.
• Visit the United States Bureau of Labor Statistics (BLS). This official government website provides searchable information for over 800 occupations, including salary ranges, employment outlook by industry, and more. Be aware that some of this data is updated annually, so it may be a year or so behind current amounts.
• Does your network of professional contacts include individuals in that field or in that geographic area? They may be willing to advise you of typical pay rates in that area.
• Some professional associations have databases of market wage rates available.
• If the position you seek may be unionized, the bargaining units in that locale may be willing to discuss typical wage rates for their members.

Note that data from online sources can vary, sometimes considerably, so always check several platforms to try to get realistic ranges.

Before negotiating, make sure you know both the current market salary for the position and your true desirability as a candidate. You must also know your own limit. At what dollar amount are you willing to turn down a job due to a weak salary offer? When you decide on this firm lower limit in advance, you will negotiate with more confidence, think more clearly, and feel less stress.

The Employer Has Limits Too

Negotiations are fine, but keep in mind most employers have limits and restrictions imposed by internal policies or human resources. The person you are negotiating with may or may not have the authority to decide the final starting pay level. Most positions have an established pay range, low to high. Pay ranges are usually tiered in increments (often called steps) based on some factor, such as years on the job. The starting salary will be somewhere within that range.

The hiring manager may have some wiggle room within the low range of the pay scale, but it is not uncommon for a higher-level manager or human resources to have the final say. Not all managers are good negotiators, so HR may require justification if they want to offer you a higher starting salary. The hiring manager may even ask you for some time to discuss this with HR; that is normal.

HR departments must ensure salaries are reasonable compared to the job market, handled equitably throughout the company, and not discriminatory. In heavily unionized organizations, bargaining contract restrictions regarding pay may exist which the employer must observe.

Flexibility of starting pay may also depend on whether you are applying for a promotional position with your current employer. HR departments often use a prescribed formula to determine the new pay level for someone transferring internally to a higher-level position. In this case, there may be less room for negotiation.

Let’s Blame the Budget

Then there’s the budget. Management develops and approves an annual salary budget that assigns dollar amounts to every position or department. Don’t be surprised if the budgeted amount is used as a negotiating tactic to avoid offering more money initially. The employer may try the excuse, “Oh, we only budgeted $66,000 for that position, so I don’t see how we could possibly offer the $69,000 you are asking.” In reality, if the organization has many employees and a sizable salary budget, there is almost always some wiggle room. Don’t fall for that trick, especially if the pay difference is relatively small. If they really want you, they can probably find the money somewhere in the budget.

Do Salary Negotiations Always Work?

Every situation is different, and things can go either way. I remember getting a job offer for a position I really wanted, but the salary was just too low. Despite my efforts to negotiate, the employer would not budge from the initial offer. Not even a penny. So, I declined the job and walked away. I was so disappointed! However, turning down that job was the best thing I ever did. I kept searching for a similar position and soon after found one with better pay, one which also opened the door to many more future opportunities.

Another time, I was offered a position and pushed back a little on the initial pay offer, citing my experience and credentials as justification. Much to my surprise, the employer responded with a new offer considerably higher than I expected. One thing is for sure: if you merely accept the first salary offer, that’s all you’ll get.

Look at the Whole Compensation Package

Consider the compensation package as a whole and don’t get hung up on only the per-hour or per-year salary. Benefits may play a significant role in the offer. For example, a lower out-of-pocket monthly cost for healthcare coverage can boost your take-home pay. Some companies offer very attractive 401k or similar programs with generous matching funds. However, employers typically define available benefit packages, so some parts may not be negotiable. Other considerations such as a company car, proximity to the new employer, reliable public transportation, or working remotely can reduce your costs and effectively boost your spendable income. A great overall compensation package may be a sound reason to accept a slightly lower salary than you had initially targeted.

What Do I Say?

OK, so you believe you are legitimately worth more than the current offer. Although it may be uncomfortable, you’re even willing to try to negotiate a higher starting salary. However, unless your current job involves regularly using that skill, you are likely not an experienced negotiator. Plus, unlike you, the company representative negotiates salaries with applicants all the time. How do you pull this off?

First, separate yourself from the emotional aspects of the conversation. Treat it like any other business discussion, even though it is about you. You must remain objective, polite, and professional. Keep your voice cool and calm. Although each of you may push back a little—after all, that is how negotiations work—neither side should try to threaten or bully. If the professionalism breaks down, the negotiations are over and will fail.

Still wondering what to say and how? Here are two excellent articles that both offer examples of suggested negotiation dialogue:

• How to Negotiate Salary Offers & Make More Money by Kirsten Chorpenning
• The Exact Words to Use When Negotiating Salary by Rebecca Healy

These articles present realistic scenarios of how a sample dialogue might go between an applicant and a hiring manager. I suggest thinking about salary negotiations in advance. Rehearsing what you might say can reduce stress and help avoid being caught off guard.

Ready to go for the Big Bucks?

Let’s summarize some of the critical points regarding salary negotiations:

• Recognize that negotiation of starting pay is a normal part of the hiring process.
• Accept that you will likely need to engage in such negotiations.
• Discuss salary only when you have bargaining power, usually when an actual job offer is on the table.
• Know your true desirability as a candidate.
• Do your homework and know the market pay rates in your field and geographic area.
• Receiving a job offer is exciting, but don’t let it cloud your judgment. Know your lower-dollar limit, the point at which you will walk away from a poor salary offer.
• Recognize that while hiring managers and employers have budget limits and authority levels, they also usually have some wiggle room. They may also need time to obtain approval to offer a higher starting salary.
• Keep the negotiations polite, professional, and objective at all times.
• Think about and practice in advance what you might say. You will be less nervous, and the words will come more easily.
• Remember that salary negotiations may not always be about dollars alone. If you are happy with the overall compensation package, you win.
• Accept that not all salary negotiations are successful. If you did your homework, asked for a fair and reasonable salary, and handled yourself professionally, but the deal still fell through, don’t beat yourself up. Chalk it up as good practice for next time.

Good luck!

Agree? Disagree? Feel free to leave a comment and share your experience or thoughts!

Featured image courtesy of Maklay62/pixabay.

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