Salary negotiation is nerve-wracking, whether you've landed a new job or are angling for a raise at your current employer. Here are four strategies to help your next salary or raise negotiation end successfully.
1. Don't be afraid to negotiate
While salary negotiations can be stressful, don't let fear and anxiety get in the way of being paid what you're worth. After the 2008 financial crash and during the ensuing recession, many people were happy to have a job at all -- any job, at any salary, says Lydia Frank, senior director of editorial and marketing, at PayScale.com. As the economy improves, businesses have more flexibility in their budgets and are starting to loosen the purse strings.
"Many people were afraid to ask for more money, or to ask for a raise in an existing position - and they didn't have negotiating power. But what we've seen more recently is that a significant portion of people who take that risk and ask for a salary increase do get something," Frank says.
Salary's not the most important aspect of a job, but it can make a difference in your overall satisfaction, your willingness to stay with your employer and your level of engagement. And disengaged employees end up costing their employers money.
2. Know your value
An organization's talent is one of its biggest assets and can be a major competitive differentiator. Make sure you know -- and can demonstrate with tangible examples -- exactly what your value is to your company. "First, you have to be confident that you deserve a raise and provide specific examples as to why you deserve more money. They key is to show why you're valuable rather than just saying it. Tangible examples of previous projects are good, but quantifiable examples -- like how those projects have made money or saved money or man-hours for the company -- are better," says Michelle Joseph, CEO of PeopleFoundry.
If you don't ask for a raise, or don't negotiate starting salary based on your value, you're giving your employer a major break by undervaluing what you're worth. Of course, if you've got an inflated sense of your value, that can work against you in negotiations.
"The bottom line is, be realistic about your worth -- try to take as objective a viewpoint as possible," Joseph says.
3. Do your homework
Hard data is your best ally as you negotiate a starting salary or a raise. Sites like PayScale.com, Salary.com and Glassdoor.com are great places to start doing in-depth research about what type of salary range you should expect.
"Make sure you understand the going market rate for the position you want within a range, and take into account the external factors that can affect that range," says Frank. "Where's the position located? How many years of experience do you have? What's the size of the company? What's their financial state? What industry do you work in? Taking into account these factors gives you a pretty realistic read of salary range, and then you can walk in with confidence and facts to back up your assertions," says Frank.
If you're negotiating a starting salary at a new position, try to avoid listing your salary history, as this could negatively affect an offer -- if you've been underpaid in the past, your potential employer could use that as a basis for a lowball offer, according to Frank, and that can put you at a disadvantage right off the bat.
"...if you have a target number in mind that you think is fair, make your request a little bit higher -- but don't go completely over-the-top -- and, hopefully, the final agreed-upon number will wind up being your initial target," says Joseph.
4. Don't just consider salary
Finally, if your salary requirement is rejected, don't lose hope. See what other options you have to negotiate benefits and perks. "Remember, it's not just about salary; it's a compensation package. If you end up with a higher salary but horrible benefits, you'll end up paying for that out of pocket -- things like healthcare, vacation time, matching 401k programs, gym memberships," says Frank.
It's also worth asking if, in lieu of a higher salary, the company will allow remote work or flexible work opportunities, says Joseph. Or, see if there's a bonus initiative in place. "Bonus incentives can be great for both parties because it allows for a system of checks and balances -- the harder you work and the more you accomplish, the higher your year-end bonus, while the company benefits from your increased efforts, she says.
Sometimes it can be worth taking a lower salary if a company covers those costs, or offers remote work or other benefits; especially if there's a growth opportunity that will further your career.
"Where do you want to be a few years down the road? If you're looking at two competing offers, don't discount a company offering lower salary but that will give you the best path to growth," Frank says.