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Jun 25, 2024

Money Talks - Master the 3 Stages of Any Salary Negotiation to Win

Talking about money with current or potential employers can feel off-putting to say the least. There’s so much at stake, especially when you’re trying to improve your life and financial status. It’s like they hold all the power to change things for the better… or not.

Well, that’s not entirely true. Sure, they’re the one controlling the money. But here’s something to remember: you’re the one providing the value. Without the solution you’re offering (in terms of your experience, accomplishments, skills, work ethic, etc.), there’s no return on investment for them.

So when you prepare for any salary negotiation, bear in mind that it’s a meeting of equals: value + value.

Knowing your value proposition is just one aspect. Communicating it with confidence is another.

If you have the skill, will, and fit for the job, then you’ll never accept anything less than what you truly deserve. Combined with this, is knowing exactly how to prepare for and approach the discussion to maintain that balance.

In fact, it can be broken down into three specific elements.

In the following blog post, we’ll dive into these three stages of any cohesive salary negotiation. Whether you’re an internal employee or if you’re in discussions with a potential employer, this process is relevant for both.

Stick around to the end, where we’ll also share some hot tips to further seal the deal.

The 3 Stages of Salary Negotiations

KNOWLEDGE IS POWER IN NEGOTIATIONS

Knowing what the salary range is out there for your job and industry and location. Knowing what benefits they can offer. Knowing the non-financial perks of their competitors. Knowing how you benchmark against the likely salary range in terms of experience and skills. Plus, understanding the psychology and mindset of the person in front of you.

Most salary negotiations can be broken down into three stages, each of which arms you with the knowledge we’re talking about:

#1 Research Your Worth #2 Benchmark Your Worth #3 The Discussion

Let’s take a look at each in turn.

Stage One: Research Your Worth

The first stage of any salary negotiation is knowing your value in the market. Even if the company has published the salary or an approximate range, you need to know how that compares to the industry standard. It could be that they pay very well in comparison, which indicates it’s a great company to work for. Or, if they’re aiming for a lowball, this might suggest an emphasis on cost control vs people.

That’s why thorough research on salary ranges for your position, industry, and location for comparison is essential. How to do that? Start with generally trustworthy sources like Glassdoor, Indeed, and LinkedIn to gather data. Explore local labor statistics office websites for additional insights. For internal negotiations, leverage internal salary data and compensation policies. Remember, knowledge is power in negotiations (we’re going to repeat that a lot in this post!).

Now, for comparison, delve into the specific company’s compensation philosophy and culture. Some organizations prioritize base salary, while others offer robust benefits packages or performance-based bonuses. Find out anything you can from the job description, current or older ads, Glassdoor, and so on. Understanding the nuances of your target company’s compensation structure, alongside data on industry standards, will enable you to tailor your negotiation strategy effectively.

Stage Two: Benchmark Your Worth

Once you’ve gathered your research, benchmark your worth against the job description. Determine how your experience, accomplishments, and skills match the requirements and give yourself an approximate match rate (e.g. 80%). This is lowest base minimum you should aim for. Do the same with the average external ranges you researched, if higher than what the company is offering. Assume a similar match rate, and note down that figure. This will be a valuable (pun intended) evidence-based number to potentially bump up the offer.

One more point: Consider the broader context of your negotiation. Are there industry trends or economic factors that could impact your bargaining power? Is the company experiencing rapid growth or facing financial constraints? Factor this in to the discussion. By analyzing the external environment, you can anticipate potential objections or opportunities and adjust your negotiation strategy accordingly.

We strongly recommend crafting a 1-page negotiation ‘cheat sheet’ summarizing your target salary range (based on company-specific and industry standards) and desired perks. This will serve as your roadmap during the negotiation process, ensuring you approach the discussion with clarity and purpose. Review this just before the meeting, to ensure everything is fresh in your mind.

Stage Three: The Discussion

You’ve done a lot of preparation to be ready for this moment. Well done! Which means that you can approach the discussion with a positive, constructive mindset, armed with evidence to support your negotiation points.

When you sit down, thank the other person for their time, and for the opportunity to discuss compensation. Express your enthusiasm about pursuing next steps with them.

If you’re an internal applicant, leverage your insight into the psychology of the person you’re negotiating with to tailor your pitch effectively (e.g. if you know the person prefers straight talking, then don’t beat about the bush. If they are fairly sociable, start off with friendly small talk. If you don’t know them, then pay close attention to their tone, expression, and body language as a guide: mirror these as appropriate.

Remember, your value proposition is at the heart of the negotiation. Clearly articulate what you bring to the table and how you align with the company’s goals and values. Showcasing your unique skills and experiences can help justify your salary expectations. Have source info ready in case they want to do further research.

By combining your research, salary benchmarking, and the discussion tactics above, the negotiation is far more likely to end in your favor.

Bonus Tips to Ace the Negotiation

Negotiating On-The-Spot

Imagine you’re in the meeting, eagerly anticipating the salary offer. And then bam! They lay out the number, but it’s not quite what you were hoping for. How do you handle this situation and negotiate for a better offer right then and there?

Firstly, keep your cool and remain calm. Even if their initial offer catches you off guard, keep calm. Acknowledge and thank them for the offer. Seek clarification on the details, such as any benefits and potential for salary growth.

If the offer works for you, agree to the terms. If not, express appreciation and calmly emphasize your qualifications and the value you bring to the table. Provide specific examples of past successes to justify your request for a higher salary. For example:

For external candidates: “With my background in project management, I’ve consistently delivered outstanding results. For example, I led a team to launch a new banking product ahead of schedule, resulting in a 20% boost in the bank’s market share within three months. I’m confident I’ll make a similar impact on your organization. That’s why I’d like to ask if there’s any wiggle room in your offer.”

For internal candidates: “Leaning on my experience in project management within this company, I’ve consistently delivered exceptional outcomes. For example, leading a team to successfully launch a new banking product contributed to a 20% increase in our market share in just three months. I wonder if there might be any flexibility in the current offer?”

After presenting your case, stay silent and wait for their response. If they offer a favorable answer, fantastic. If not, express appreciation for their time and ask if you can have some time to think things over.

Negotiating a salary offer in real-time requires quick thinking, confidence, and effective communication. But if you stay calm, express appreciation, and present a compelling case for why you deserve a higher salary, you can increase your chances of securing a better offer on the spot.

The Power of Silence

Imagine you’re in a salary negotiation. You’ve just laid out the compensation package you’re looking for and the person on the other end is letting it sink in. Here’s the one thing you’re going to do now.

And that’s to shut up.

Say nothing. Go silent. Wait for them to make the first move.

The reason you’re going to do that comes down to human psychology. Silence is uncomfortable in conversation. Unnatural, even. Conversation is all about turn taking, right? When the other person finishes their turn, we have a strong impulse to take our own turn. Imagine if your friend says something to you, and you say nothing back. It confuses them. They’ll likely be the first to speak, even if it’s just to check that you heard them. But you’ve manoeuvred them into doing that, even if they’re unaware of it.

By strategically shutting up, you subtly put the ball in your court. The longer the silence goes on, the more discomfort they’ll feel, and the more likely they’ll say something other than “no”.

On the other hand, if you tell them what you want and get nervous when they don’t say anything after a few seconds, how are you feeling? What do you do? You’re probably going to start yapping away to fill the silence. What that’s doing is subconsciously reminding them that they have the power in this conversation. That’s not a response you want. You want the opposite.

So that’s why it’s so important to state what you want, and then be quiet. Resist the urge.

Knowing when it’s time to walk away

When you go into a salary negotiation, the last thing you’re thinking of is what to do if it doesn’t go your way. But you need to know how to gracefully bow out if things don’t quite align.

If you’ve been going back and forth, discussing numbers, benefits, and responsibilities, but the final offer just isn’t hitting the mark for you, what do you do?

You have two options. You can keep negotiating, which probably doesn’t make sense if both sides are stalemating. Or you can tell yourself it might be time to politely excuse yourself from the negotiation table.

But here’s the kicker: even if you choose to walk away without getting what you want, do so with grace and professionalism. Thank them for their time and the opportunity, regardless of the outcome.

Why would you do that? If they’re not giving you what you want, why should you take the high road?

I’m going to tell you why. How you handle yourself in these moments speaks volumes about your character. Leaving on good terms, even in disappointment, leaves a lasting impression and keeps doors open for future opportunities.

Conclusion

This blog post has delved into the three parts of any successful salary negotiation: research, salary benchmarking, and the discussion itself.

In addition, we explored how to handle negotiations on-the-spot, especially when the figure wasn’t what you expected. We also shared a little-known but incredibly powerful tactic: strategically staying silent to elicit a response from the other person and adjust the power balance. Finally, we acknowledged that sometimes, it might be better to just walk away.

If you’d like to dive into the art of salary negotiations in more detail, check out our video tips, trainings, and guides at www.jobleads.com

For more insights, tips and strategies related to this topic, be sure to read our other articles: 10 Benefits & Perks to Negotiate Beyond Salary in a Job Offer & What’s an elevator pitch - and how will it land me great jobs?