Salary negotiations can help boost your income when changing jobs
Whether you’re actively looking to make a move or being lured away by a recruiter, a new job offers many opportunities for growth. Discovering how different organizations run and tackling the learning curve during the first few months is part of the fun, and struggle, of making a change.
Switching employers can also greatly benefit your financial future. While staying at the same job could lead to a modest annual raise, you might be able to negotiate a much larger jump in pay when changing companies. Negotiating a job offer can be daunting, but consider what happens if you don’t negotiate – you might wind up earning less than a hiring manager was willing to offer.
Do your homework to find an appropriate salary range before negotiating. Whether you are a veteran or a novice negotiator, you may want to spend time researching before sitting down at the table. Keeping in mind that compensation can vary depending on location, look online for studies or personal accounts that reveal the salaries of someone in a similar role.
Several for-profit companies compile and share compensation information online, and the Bureau of Labor Statistics has pay data based on occupation and geography. You could also reach out to recruiters who focus on placing candidates in your industry as they’re accustomed to discussing compensation.
The more data on your profession’s compensation you can get the better, because you want to be able to make a fact-based request. Ask for too much and you risk being seen as unreasonable or out of touch. Ask for too little, and that might be all you get.
Job seekers often get stuck on who says a number first. While advice ranges, one thing is for certain – you don’t necessarily want to use your previous salary as a starting point. Especially if your research reveals you’re below the current market rate, you want your next offer to reflect the experience and talent you bring to the table. If you’re being pressed to respond first, answer with the salary range you’re aiming for during your job hunt.
Don’t get stuck on money – keep the big picture in mind. It can be easy to fixate on the cash portion of your compensation when negotiating, but sometimes there isn’t any wiggle room in the budget. Look at the big picture of your potential pay and benefits. Perhaps a lower-than-desired cash offer is offset by a generous retirement contribution matching program, great healthcare benefits, stock incentives or bonus opportunities.
When the total compensation doesn’t meet your expectations, try to think outside the box and give the hiring manager alternative options. You could request additional paid time off, the freedom to work from home one day a week or a professional development stipend. After all, flexibility and personal growth can be more valuable than money.
At smaller companies, you could ask for a quarterly lunch with an executive in your department or your direct supervisor. A lunch won’t cost the company much money, but it could give you insight into the company’s future, let you know which skills to focus on developing and strengthen your personal relationship with higher ups.
Back up your request with valid reasons. Aim to reinforce each of your negotiation requests with a valid, relatable and quantifiable reason. When asking for more money, point to experience or skills that distinguish you from other candidates. Less traditional requests, such as meetings with an executive, could be justified by your dedication to self-improvement and desire to stay in touch with the company’s needs.
Bottom line. While changing jobs and negotiating an offer can be a challenge, moving to a new company could accelerate your salary’s growth. Before jumping into negotiations, take time to research the market, consider your overall wants and validate your requests. Presenting a coherent argument can help win over a hiring manager and set you apart from other candidates.
Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.