If there’s one thing I love to do, it’s to negotiate. I know it can be intimidating and sometimes scary, but I tend to see it as a game. I’ve negotiated every single job offer I’ve received—some successfully, and others not so much—as well as various car, house, and other purchases. I am by no means an expert, but I’ve learned a few things and have helped both friends and clients with the process of negotiation.
WHY SHOULD YOU NEGOTIATE?
Without getting into the reasons for the gender disparity, women are less likely than men to negotiate. Alternatively, women are more likely to face backlash when they do. With that said, if you don’t negotiate, you’re facing a potential stagnation of, or long-term decline in salary and benefits that can compound significantly over the course of a 30+ year career.
Given the potential for a negotiation to fall through, a lot of people simply accept an offer as presented. A couple reasons to consider negotiating include wanting more money or other benefits such as additional paid time off (PTO). Of course, an increase in pay is the most likely request. The vast majority of offers presented fall within a range. The initial offer usually falls within a specific range. If the salary range is between $100,000 and $120,000, a company might, for example, offer the candidate $105,000. For the most part, they expect you to negotiate. It is built into the process and in their initial offer.
Your negotiating skills can be seen as a tremendous asset. Showing your ability to have the conversation and successfully bargain can be a huge benefit for you. When my sister, an attorney, was offered a job recently, I coached her through the negotiating process, and her prospective employer was incredibly impressed with her bargaining skills. Not only did she successfully negotiate for a higher salary, they were even more pleased about their hiring decision.
HOW TO GO ABOUT THE PROCESS
Before negotiating, the most important thing you ought to do is prepare. I definitely do not recommend outright requesting a higher salary without rationale. Here are a few suggestions:
- Do as much research as you can. Use sites like Salary, Glassdoor, and Indeed to find out what typical ranges are for the position. For tech roles, I especially like to use Levels.fyi as a source. Also, in your interview, feel free to share some of the things you have successfully achieved in the past and how you might apply those skills to the new role. For instance, “I can bring value to this organization by implementing XYZ.”
- Do not demand more money or threaten the hiring manager. Ultimately, the best outcome for both you and the company is a mutually satisfactory job offer. The goal is for you to be compensated appropriately, not to extract as much money as you can from the company. This can result in unrealistic expectations from you or financial burden on the employer.
- Identify the range of the position early on. I prefer to have this conversation at the onset. If you’re expecting $120,000 and later discover—after a few rounds of interviews—that the salary range for the position falls between $90,000 and $100,000, you’ve wasted both yours and the company’s time. However, if the range falls within your expectations, I wouldn’t throw out a number too early. With that said, if there are other benefits you’re attracted to, I think it’s fair to signal that to the employer early on. Don’t wait until you’ve been offered a role to mention that you, for example, only seek part-time employment or need to work from home 50% of the time.
- Practice. If you are at all nervous, role-play with a friend or family member. Think ahead about what you’re going to say and how you’ll respond to the possible responses you receive. You should know ahead of time if there’s a number you just won’t go below. Also, be prepared for them to decline your offer. Again, I know this can be scary, but it doesn’t mean you’ve botched the whole process and ruined your prospects. This has happened to me, and I have typically responded with something like, “Well, I’m disappointed, but I’m still very excited about the opportunity and I look forward to working together.”
WHAT EXACTLY SHOULD YOU NEGOTIATE FOR?
Salary is the most common thing that is negotiated, but there are plenty of other things to consider. Not everyone cares all that much about receiving a few extra thousand dollars. You might prefer extra PTO, flexibility in your work schedule, or even a different title. What are the options? Again, it depends on what your priorities are, but you could consider negotiating for:
- A higher starting salary
- Equity—or a path to equity—in the business
- A signing bonus
- An extra week or two of PTO per year
- The ability to work from home
- Flexible work hours
- Travel expectations (how often, and the level of travel)
- Professional development/continuing education budget
- Frequency and timing of performance reviews
- Bonus terms and target (i.e., X percentage of salary)
- A different title or other modification to the job duties
SOME FINAL THOUGHTS
I recently had a conversation with other financial planners on this topic, and there were some great gems unearthed from our discussion. Such as:
- Consider interviewing for a job you don’t actually want. It’s great practice and can give you more confidence negotiating since there is no major risk.
- Remember that there is a LOT more to your success in a role than money.
- The skills used in negotiating are transferable to many other areas of our lives, both professional and personal. Take the opportunity to work at advocating for yourself in as many settings as possible. Again, not just for the sake of it, but because it’s great practice to be able to voice what you need and why.