8/6/2019 When and How to Negotiate Your Salary

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When And How To Negotiate Your Salary

in 66 Day Job Club,Job Hunting,Job Hunting Tools,Negotiating Your Salary,The Vault

You can get the salary you want by creating the Salary Negotiation Letter.

Salary negotiations for a new job or asking for a salary increase at your current jobrequire the same steps.

Here are just some of the common mistakes made during salary negotiations:

Not recognizing the job offer is a salary negotiation Not knowing how to answer and respond to the salary requirements question Putting your salary requirements into your cover letter or your resume Not knowing if the job offer is reasonable

Accepting an unacceptable salary offer Asking about salary during the interview Letting somebody else negotiate your salary such as the recruiter Letting somebody else tell you what you are worth such as the recruiter or your

friends Being too anxious about getting the job rather than negotiating your salary Not considering the true value of the benefits in your negotiations Not being prepared properly for salary negotiations Not asking for the salary that you want Not knowing what salary to ask for Not spending the time or money you need before the job offer comes

Thinking that by not stating what you want, the employer will pay more than theyyou expect Not knowing what salary you deserve

Some of the things you need to know when negotiating salary:

Know when to ask about salary Know how to ask about salary Know how to talk about salary Know how to present your salary requirements Know how to respond when asked about salary requirements

Know how much salary to ask for Know how to present your salary requirements in a salary negotiation letter

In fact, when you understand and apply good salary negotiation techniques, you will get ahigher salary.

The key to successful salary negotiations is having the information you need and beingable to present it correctly. All the information is presented in the Salary Negotiation

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Letter and by the end of this article, you will know how to create your letter and beprepared for your salary negotiation and the salary negotiation question when its asked.

With proper preparations, you can make thousands of dollars.

Creating the Salary Negotiation Letter is like finding money.

A $2000 increase is worth $2000 every year you work for the company. If you work forthe company for five years. The time and effort you put into the negotiations is worth$10,000.

Not bad for a small investment in time and money.

To get this kind of return will need about three hours of work and a small investment toget the information.

Lets get started on doing the work.

Here are three steps in salary negotiation and you should be starting them the momentyou start your job hunt.

1. Know The Salary You Are Worth2. Know What Salary To Ask For3. Ask For The Salary

Lets look at each step in the three step salary negotiation method in depth.

FYI in the following paragraphs I use the term executive. My choice of the word isbased on the work of Peter Drucker. He defines all knowledge workers as a person thatworks with their heads rather than their hands. This definition of executive includesengineers, programmers, sales people, lawyers, and most office workers.

Step 1: Know The Salary You Are Worth

When you know your true value as an employee and you learn to demonstrate your valueto the employer, then the salary you want and deserve will be yours.

The first step is to create a compensation summary. This is a document for your eyes

only. The compensation summary will detail your current salary and the industry norms.

The Salary Negotiation Letter is derived from this compensation summary. It does nottake long to create and is a powerful tool.

Your current compensation summary must include Base Salary, Bonus, short termincentives (such as a signing bonus), long term incentives, sales commissions, carallowances, memberships in a gym or country club, stock options, medical and dental

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benefits, retirement benefits, and miscellaneous benefits like tuitions paid for yourchildren.

Lay out the compensation summary with each compensation item on a single line.Microsoft Word has a footnote capability to provide a short summary of where the source

of the information comes from. If there were some assumptions, include them in thefootnote in a summary fashion. Keep it simple and short.

For each of the line items in the current compensation summary, put a dollar value on it.For things like stock options, put the current market value on it. Since you are leaving thejob, we can assume that the future value of the options are worthless. If your situation isdifferent, document it.

Make sure that you price the benefit in what it is worth to you, rather than what thebenefit is worth in the compensation documentation.

For example, lets assume your current employer offers dental benefits which includescovering the cost of an orthodontist. If you are a single guy with no children, this is auseless benefit and has no dollar value to you. If you have several children ages 12 to 16,this benefit can have a lot of dollar value to you.

Ignore individual amounts less than $1,000. If all the small amounts add up to over a$1,000 put them all in a miscellaneous category.

This should take about an hour if the information is readily available.

Step 2: Know What Salary To Ask For

The next step is to do research on what the industry is paying somebody like you. Thiswill be a second column in your compensation summary.

It may be good news you are getting more than industry average, or it can be bad news,you are getting less.

Your salary research will come from salary surveys and salary charts.

Salary surveys include year of graduation, a description of the job, variations in location,certifications, and bonuses.

Be aware salary surveys usually only include base salary and not the value of thebenefits.You can add the value of your current benefits to get a total compensationpackage.

The location of the job makes a significant difference in your salary negotiations. This isobvious and important. The cost of living in New York city is significantly different thanin rural Ohio. You want to make sure you are doing the proper comparisons.

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Your skills and experiences can change your salary expectations. You will need to findindustry salary norms that reflect you and your skills.

To get a higher salary find the proof you are worth more.

1. If you have 3 years of industry experience, but your responsibilities are that ofsomebody with five years experience, then you should be paid like that. Use thefacts from the salary surveys to find the information that coincides with yourresponsibilities.

2. Document why you are like somebody of five years experience. Get a referenceletter from a boss or co-worker documenting that in their opinion you working asif you have five year experience.

3. Use the job descriptions and responsibility levels from the salary surveys to adjustyour salary expectations.

4. Find salary surveys from the company you are applying to. If its not available, usea survey from a similar company to create your industry

Using the information available at theTheVault adding the industry norms to yourcompensation summary should take another hour or two. Be aware that when you are atThe Vault you will find other information to assist you in your job hunt. There are somecareer guides and other things available. If you start reading and learning more thingsabout job hunting, please dont complain that this step took longer than one hour.

Big warning dont ask your friends for their information and be careful of free

surveys on the Internet and magazines. They are worth what you pay. Why? becauseit costs money to create a good salary survey. It is worth something of value. The moredetailed it is, the more value it has. That is why companies pay for quality surveys. That

is why you should also be willing to do it.

Step 3: Ask For The Salary

When your salary request is based on facts you are in a strong negotiating position.

Steps 1 and 2 have put you in a strong negotiation position. If you have not gotten thefacts, then you wont be able to negotiate from a position of strength. Your results willreflect the time and effort you put into creating your compensation summary. The

high the quality of the information the higher the salary you will get.

Facts give you self confidence because they are not opinions. People respect facts. When

your salary request is based on facts, you dont appear greedy, ruthless, sleazy, or petty.You will appear confident, self assured, and in control of the situation. This is how anexecutive talking about their compensation should act.

Now its time to create your salary negotiation letter. Its based on your compensationsummary. The salary negotiation letter is your key to getting the salary you want.

Layout the salary negotiation letter with your name at the top and mark it confidential.

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Select the column from your current salary or the industry norms based on whether yourcurrent compensation is above or below the industry norms. Choose the higher amount,since that is what you want as a compensation package. If your value is above theindustry norms based on your experience or certifications then create a second column,with your expectations on it.

The foot notes documenting why you are worth more than the industry norms or yourprevious salary are critical to the success of the Salary Negotiation Letter. Thesefootnotes can refer back to the research you did. Say something like As per jobdescription in The Vault research report xxx

If your compensation could significantly change from year to year add another columnfor next year. Typically you will need this extra column if your salary is dependent onexternal factors such as total company sales, share value, etc.

It is normal for VP level and above compensation to use two columns since a senior

person is affected by company results more significantly.

A little more about the footnotes on the Salary Negotiation Letter. You must footnoteclearly and consisly (two or three sentences at most) as to how you came to its value. Ifrelevant include assumptions of percentage increases in company sales, promotions, etc.You dont need to justify the numbers, just explain the source or assumptions.

Creating the Salary Negotiation Letter should take another hour or so.

You may need different versions of the salary negotiation letter depending if there is awide variance based on location. You may also want to have versions for different jobs.

Since you have the raw information, changing the salary negotiation letter for a specificjob in a specific location shouldnt take long.

When the Salary Negotiation Letter is complete you are ready to answer the salary

requirements question with confidence.

You may or may not need the salary negotiation letter as we will see in the SalaryNegotiation Scenarios.

Lets examine the various scenarios that will happen in your salary negotiation:

Salary Negotiation Scenario 1: The interviewer asks you what your current salary isor the compensation you expect.

If you are earning less than the current industry norms, focus the salary negotiationson the industry amount. Answer the salary requirements question with I am looking fora compensation package within the industry norms which is x dollars a year. They willrespond with surprise or accept the number. If they respond with surprise, you state Thissalary is based on the salary surveys from The Vault. And I am more than willing to

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provide you with the detailed figures. And if they ask, then provide them with yoursalary negotiation letter. This will probably end the discussion since your footnotes makeit clear you have done the research. They may ask for your raw data. Feel free to provideyour raw information as well.

To get the higher salary, stick to your guns. You have done the research, you know whatyou can expect, you dont have to give in unless your research was not done properly. Ifyou use The Vault information correctly, you can keep your head high.

If you are earning more than the current industry norms, you will need to focus thenegotiations on your value. Answer with the number from your salary negotiation letterAgain, they will respond with surprise or simply accept the number. If they respond withsurprise, you state This salary includes all my compensation and reflects my abilities. And if they are surprised at the number, offer them the salary negotiation letter, if theyare not surprised, keep the letter in your pocket.

Salary Negotiation Scenario 2: The interviewer doesnt ask what your currentsalary is or the compensation you expect. This scenario isnt that common.

Dont say a word about compensation, wait for the job offer.

When you receive your offer of a job, compare the offer to your salary expectations. Ifthe offer is higher than both the industry norms and your current compensation. Besatisfied because you know the offer is good. If the offer is lower than what you want,call your contact and say Thank you for your kind offer, but, I have researched what Iam worth to your company and I would like you to raise the offer. I can provide you myresearch. If they dont ask for your research or they say the offer stands, then its time to

move on or except an offer below what you want or deserve. This is a decision you needto make. Many times people take a job at a lessor salary for many valid reasons, such aslocation, what they will learn, the prestige of the job, or the fact they like the companyand the work.

When To Start Your Salary Negotiations

The best time to follow the Three Step Negotiating Formula is when you start your

job hunt. If you are already having interviews, get the information you need today,

salary negotiations is the next step and you need to be prepared.

If you are just starting your job hunt the salary surveys research will identify job titlesthat you may not be aware of but you are qualified for. These titles will help you searchfor a job on the job boards. They will help in your online resume.

Doing the salary survey research will provide you descriptions of jobs that you caninclude in your resume. It will tell you what employers consider important. If there is aresponsibility in a salary survey that makes a position worth more, and you have that

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responsibilyt in your current job, add it to your resume. Its something employers feel isimportant.

Once you have your salary negotation letter in your hand, you will be prepared for thesalary question.

Here are the ways creating your Salary Negotiation Letter can help you. Only by havingthe facts will this work for you.

1. Having the salary negotiation letter available gives you the confidence to answerthe salary question when it comes up in the interview.

2. When the salary question comes up in the interview your answer will be neitheroffensive nor wimpy. You will have have facts and understand what is a fairsalary for you.

3. The Salary Negotiation Letter lets you negotiate from a position of strength.4. Knowing what reasonable salary expectation will let you plan financially.

5. The better the research you do, the happier you will be with the job offer and thebetter the offer will be.6. You will get the salary you want.