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Whether you’re preparing to accept a new job offer or you’re angling for increased responsibilities at your current position, you’ll need to strategically plan how to negotiate a salary.
We know that the idea of asking for a raise or a higher salary, or even a low-ball job offer, is intimidating, even scary. There’s a myriad of reasons to accept the first offer or your existing wages:
There are huge flaws in these arguments, though. You risk hurting your financial prospects, delaying retirement, and placing yourself economically behind your coworkers by accepting the first salary offer you receive. We’ll teach you how to strategically calculate your worth and successfully negotiate a comfortable salary, as well as how to accept or walk away from an offer.
Before you can even approach the hiring department or your manager with a salary negotiation, you need to do your research and know exactly how much your fellow workers in similar positions are being paid, how much you can ask for, and how much you can comfortably accept and still pay your living expenses.
The following steps can help you make an informed argument for your salary request, complete with competitive numbers and quantifiable metrics that give you greater leverage during the negotiation process
Before you can ask for a specific salary, or accurately calculate how much you’re potentially worth, you’ll need to find out the average salary for people working in your desired position, the specific industry, and your geographic area.
You need to look within these parameters because pay scales can vary differently based on education, years of practical experience, cost of living, gender, and race. By analyzing multiple people with varied backgrounds within your general location and experience level, you can understand how much your fellow workers are paid and how much you can safely ask for.
You can find this information using two methods: asking people within your field, experience level, and chosen job title how much they earn and by using online sites like LinkedIn, Payscale, and Glassdoor.
Asking workers within your field: We’ve long been taught that it’s taboo to share salary information with others, but there is a growing conversation around pay discrepancies and inequity. You can help bridge this gap by reaching out to people inside and outside of your network who live in your local region and work in the same job position and industry. You can try using a polite message such as:
Provide a summary of your experience and thank the person for considering your request. Just know that not everyone will respond to this message, but you may receive a few messages from fellow workers who appreciate pay transparency.
Online salary calculators: If you’re shy or uncomfortable asking people about their salary, there are online resources where people can anonymously share their salary information, job titles, and general location. You can use the following salary calculators to estimate a salary range, but keep in mind that this information is anonymously shared and probably wasn’t verified.
This salary range won’t be the highest or lowest salary number you’ll consider. The number that you calculate here will be a reasonable compromise salary that you’ll be satisfied earning. You need to decide on this salary range before you can calculate a higher starting point so that you can negotiate as close to this salary as you can.
Use salary reporting sites like Glassdoor to evaluate average salaries. Note the pay differences between years of experience, education and training, promotion histories, and gender or race. You’ll need to do this to ensure you’re paid a fair and unbiased wage.
Carefully analyze where your experience level, contributions, and earning potential falls on this chart. For example, if you have three years of experience, you can’t justify asking for a salary match as someone with 10 years of experience, but you can match a salary for five years of experience.
This is the starting point for your negotiations — you want to start with as high a salary as you can reasonably justify because the hiring manager or HR will probably counter with a lower number. The higher you start your negotiations, the more likely the hiring manager or HR will counter with an offer that meets your financial requirements.
Use salary reporting sites like those listed earlier in this article to evaluate average salaries within your region and job title. Add 10-20% above the base goal salary you calculated.
As important as calculating the highest salary you can aim for, you need to determine the bare minimum wage that you can accept from a job offer. You can use an online calculator to calculate your area’s average cost of living, but your finances are unique to you. To calculate, you need to create a budget sheet that includes the following:
No matter how excited or eager you are for a new job opportunity, you can’t accept an offer that sinks below your lowest salary requirements. Doing so could strain your finances in the long run, create stress, negatively impact your job satisfaction, and reduce your lifelong savings potentials by setting you financially behind your fellow workers.
Before you accept or decline an offer, look at the market value of the offered benefits. The salary calculations that we mentioned above should be flexible, especially if the company offers extra incentives like paid holidays, medical stipends, 401(k) plans, or student loan support. Let’s offer a quick comparison:
At first glance, your best offer comes from Company 1. But Americans pay an average of $483 a month for basic medical coverage, or $5,472 a year. The travel stipend offered by Company 2 would save you $2,400 a year on gas, parking or transit passes. When you combine the value of the benefits packages, Company 2 offers an estimated $37,872 a year, making it the better choice.
Research the market value of the following benefits and see how they might increase the face value of an offered salary:
You may need to do a little digging to find the market value of some of these benefits such as childcare support, medical support, or shares and equity. For example, to calculate the cost of childcare support, you’ll want to see what childcare services the company offers and how much the average out-of-pocket payment of comparable service would cost you. Those out-of-pocket savings will add to the value of your salary.
You can calculate the value of other benefits such as student loan payments or stipends by looking at the proposed monthly contributions, multiplying them by 12, and adding them to your salary.
You want to critically examine each point of your salary request for all the pros and cons of your request. You’ll want to work on eliminating the cons. Pay special attention to any cons where a manager might decline or downplay your request with an explanation of a low budget, a criticism of your work, or a request for additional examples to justify a higher wage. Anticipating these arguments can help you prepare a solid defense that might convince a manager to meet your salary increase request.
These are just a few common arguments, or cons, that a manager might use. We’ll offer a few suggestions on how to effectively counter these arguments under the next tip, but you’ll need to anticipate counterarguments tailored to your job and experience.
A solid counterargument for each potential con you anticipate prepares you for the negotiation table and helps you play up the potential pros you identify, and will:
If you actively think of any argument your manager can pitch before you approach the negotiation table, you can prepare a strong counterargument that gives you better leverage in the discussion. Here are some common arguments, or cons, and how you can prepare for them. But you’ll also need to look at your former annual reviews, feedback, or areas of improvement that could be used against your request like the following:
After you analyze each special circumstance and create counterarguments for each con to your salary request, you need to practice your argument. Memorize each argument. If you have each counterargument and evidence committed to memory, you’re less likely to get flustered during your proposal. You’ll appear cool and collected, which will add to your confidence level and give you a leg up during the negotiations.
Now that you have all of the prep-work and research at hand, you’re ready to bring up your salary with the deciding party. Here’s how to confidently engage with either the department head or HR representative and negotiate your salary.
You may feel nervous to negotiate with a person of authority, especially while negotiating for your financial livelihood. You need to mentally prepare and boost your confidence before you walk into negotiations. There are some physical and mental exercises that you can try. Please note that everyone hypes themselves up differently — some of these suggestions might work, some might not.
Focus on the positive — you might be worried about coming across as demanding, ungrateful, or putting your position at risk. However, there is nothing wrong with asking for a fair salary that reflects your professional contributions. Salary negotiations should be seen as the meeting of two qualified individuals working together to propose a reasonable compromise. You walk away with a reasonable salary and your manager helps facilitate an environment where a potential or current employee is content with their role. Especially if the salary negotiations work in your favor.
You want to put your best foot forward. Starting negotiations with your highest salary calculations places you at a healthy starting point. It’s unlikely that your manager will agree to that first number, but they may surprise you and agree with your starting point and approve the increase.
It’s far more likely that your manager will counter with a lower number. But starting with this high number widens the negotiation range and can help you counteroffer your way to the goal salary that you calculated during your comparison research.
Remember that a negotiation isn’t a fight. A firm but polite demeanor ensures that you’ll walk away with a good salary and working relationship with your colleges.
READOUT: Don’t forget that you’re facing a person with limitations and company-issued constraints. Be ready to analyze the counterarguments that your manager or HR representative makes. Critically analyze their reasons in real-time and, if they have iron-clad restrictions on salary caps, offer them alternative requests in the form of benefits that can reduce your monthly budget needs and help you make the most of the salary they can offer.
Once you and your manager finish presenting your arguments and reach an understanding, you may need to be patient. Your manager or HR rep may have the power to present you a finalized offer at the end of your negotiations, but it’s more likely that they will need time to prepare and approve a new offer. They may need to place additional requests through their financial and legal departments before they can offer you a new salary.
Once you finish your initial negotiations, thank the manager for their time, send a follow-up after three days, and be patient but persistent.
The negotiations are done and a second offer has come your way. Here’s how you accept, decline, or re-approach the new salary offer:
It’s time to critically analyze the new offer. Is it close to the goal salary you initially set out to earn? Is it higher than your lowest possible salary? Does the new offer come with increased benefits that place you closer to your goal salary?
Don’t fixate on the monetary value of the offer. If your salary is lower than you anticipated, can you still find value in the offer? Does your salary package come with increased career opportunities or flexibility?
If you’re not happy with the new salary offer, it can help you to ask the manager how they came to the final number. This can give you a better understanding of how the company functions and structures its workforce, as well as where they’re willing to compromise. For example, you can ask the manager about set income caps, raise schedules, promotion possibilities, equity packages, and salary limitations that can help you further your salary negotiations.
If the manager or HR rep is firm on the salary, you can stretch this salary by doubling-down on additional benefits. You can request additional paid-vacation days, additional stock options, and reimbursement opportunities to be included in your salary offer. These additional perks can elevate the value of your salary.
If the manager or HR rep indicates that they’re still open to negotiations or schedules a follow-up meeting to discuss the salary package, feel free to re-engage in salary discussions. If there are no salary caps, you may be able to counter a higher income or increase your benefits package.
However, you need to approach this carefully. If you noticed that this latest salary package needed to go through multiple parties for approval, it’s unlikely that you’ll be able to negotiate further.
Don’t engage in further salary negotiations for the sake of winning. Remember, you’re negotiating with your future coworkers and managers. If the salary offer is close to your initial goal or comes with additional benefits that you successfully requested, graciously accept or decline the offer.
Remember, you can always renegotiate your salary with the company later in your career, especially once you start to contribute to the company’s success.
However, if you’re a current employee with increased responsibilities and your reasonable salary request was declined with no negotiations or offer to revisit, it may be time to consider a new job. A company that refuses to discuss a salary increase for increased contributions may not value you or contribute to a healthy workplace. If you’re interested in finding a new job, we offer resume-writing guides and an online Resume Builder to help you get started.
The advice we gave before relates to all salary negotiations, including promotions and transfers. Here’s a tailored approach that you can use to negotiate a new job offer since you’ll be negotiating with strangers who have never worked with you or understand your personality or accomplishments.
The average interview process includes various meetings with different people. You might be tempted to bring up your salary requirements at the first interview, but this might end the interview process before you have a chance to fully showcase your potential. Here are the common interview stages and when you can broach the topic of salary.
It can be tricky to determine how much to ask for, especially if this is your first time in a role or if you’re relocating from a city with a different cost-of-living requirement. For example, the salary range for the Bay Area is significantly higher than Austin, Texas due to the high cost-of-living.
To calculate a reasonable salary that meets your personal budget and experience level, you’ll want to use pay estimate sites like Glassdoor. Limit the search result to the job title for which you’re applying, the specific industry, and the city or region from which you’re working. Remember that this tool is effective for creating an estimated salary range, as these numbers are user-supplied and may not reflect true salary ranges.
During your career, you may receive a job offer that is more than 20% below your requested salary range. Don’t take it personally. The company might have financial restrictions that limit the amount they can offer you. For example, a start-up may have a restrictive series A fund, or a nonprofit may have an income cap for all personnel. Here’s how to negotiate a low-ball offer.
If the hiring manager seemed impressed by your resume and strongly indicated they liked you, you may be able to get a higher salary by letting them know you are disappointed in the job offer. This might result in one of two situations; the company doubles-down on the salary due to corporate limitations, or they propose a new offer with an increased starting salary or greater equity.
Do not offer them your salary range yet, as their current offer is significantly lower than your minimum requirements. They may not be able to meet your goal salary, but they might offer more than your lowest starting point if they revisit their offer.
Honesty is the best policy. If the company didn’t budge on their initial salary offer, you can share your lowest-acceptable salary number, explaining how that is the lowest salary you can afford in order to meet your monthly expenses, and share that you’re still interested in the work that the company is doing.
This informs the hiring manager that although you’re passionate about the job, you have financial reasons why you can’t accept it. Giving them a full understanding of your decision-making process could allow them to come back with a new offer that meets your financial needs.
If the company truly wants you and can at least meet your lowest salary, you should accept their offer if you’re interested in the position. You’re not likely to get a higher offer from them due to their financial limitations. If they can’t meet your financial requirements, you can politely decline the offer, thank them for their time, reiterate your financial constraints, and let them know that you’d love to revisit the conversation in a year or so.
This keeps an open line of communication with the company and lets the hiring manager know that your decision was linked to financial reasons and not a lack of interest in the company.
If you’re up for a promotion or have picked up increased job responsibilities, it’s reasonable to request a performance-based raise. Here’s how to broach a pay-raise request with your manager or HR rep.
Use the same quantifiable metrics that you would use on your resume to show how you contributed to the growth or profitability of the company such as cost-cutting measures, increased customer traffic, or successful projects. We’ll show you how to chart your growth of responsibilities and successful contributions below.
Create a tracking chart that notes what you were initially responsible for, when your job responsibilities increased, how often they increased, how often you met your job performance metrics. For example, if you developed a strong reputation at work and are frequently added to additional projects and teams, this can show how valued your contributions are to various teams.
You’ll use this chart to indicate how your role at the company has grown — it will help you justify the performance-based raise you’re requesting.
It’s one thing to say that you helped reduce your budget while increasing profits; it’s another thing to show how you reduced your budget by researching new vendors and negotiating a new contract while increasing site traffic with superior products.
It can help you to further illustrate these wins by creating before and after charts that clearly indicate how your contributions resulted in positive growth. A strong visual is worth a thousand words.
If you present a strong argument for a raise, but the company can only offer you a small salary increase due to financial constraints, you can offset the low raise with a request for increased benefits. If you can negotiate additional training programs, additional PTO, better medical coverage, or financial stipends, you can increase the value of your salary by reducing your out-of-pocket expenses.
A job offer is never guaranteed at any point in the interview process, even after signing an offer or starting at the new role. A company can pull their offer any time before your start date or terminate you within a given probationary period. Therefore, it doesn’t hurt to negotiate for a strong salary. Your skills and experience are valuable — a company should value them as much and you do.
You can justify a higher salary by analyzing the average salary ranges of people within your job title, industry, region, and experience level. If a colleague with a similar professional and academic background earns close to the salary range you’re requesting, you can use their salary as precedence for your argument.
You should never accept the first offer. A company is a business — most companies will prioritize saving money and getting the best possible deal. You should view the initial job offer as a starting point. Feel free to request anything 10-20% above the initial offer or increase the value of the job offer by requesting additional benefits.
As we mentioned above, you can counter 10-20% above the initial job offer salary unless your competitive research indicates that average salaries are significantly higher than the initial job offer. If you know that average salary ranges are high based on your experience level and region, you can counter with your highest salary expectation, explain how you reached that number, and indicate that you’re open to discussion.
Salary negotiations are unique to each person and company. A hiring manager may be authorized to accept a counter within a set salary range, but may need additional authorization to increase benefits or salary beyond that range. You may see a new offer within a few hours or days after your initial negotiations.