There are many concerns you will have when starting a new job and the biggest one is probably compensation and how to negotiate a higher salary. After all, you want to be sure that you are going to fairly compensate for the work you will be providing, the experience you have and the education you are bringing to the table.
Before you accept your new position, you may not feel like you have much room to negotiate. However, most companies actually expect negotiations. If you are armed with the right knowledge, you can negotiate for a higher salary or better benefits than the company may be offering. In fact, most companies expect you to negotiate their first offer, and it is seen as a professional expectation.
One mistake many people make when accepting their first job offer is jumping at the first offer. Yes, landing a job can be difficult and it can take time, but you don’t want to accept an offer where you will not be fairly compensated for your work. This will only set the stage for feeling underappreciated and overworked and lead you to struggle more financially than you should.
Once you are offered a position, use the following information to your advantage so you can start negotiating a higher starting salary.
Research Your Value
Before you begin negotiating your salary, you need to research and understand how valuable your skills are in the market that you are seeking to enter. What are other companies paying for the same position? Knowing this can help you determine what the going rate is for the job you are applying for. Having this knowledge will help keep you from accepting an offer that is unfairly low, or keep you from trying to negotiate a salary that doesn’t make sense for the position.
Also, how does the company treat salaries overall? Today, a simple search can show you what a company pays their employees throughout the company. How do these salaries compare to other companies with the same positions? If it is lower than most companies, chances are you will be undervalued, and the opportunity for a raise may be low.
Know Your Salary Range
Before you apply for a job, you should have an idea of what type of compensation you would accept for the position. What is the very lowest offer you can see yourself accepting? What is your ideal compensation? The last thing you want to do is accept an offer that you will not be able to live off of. Understand your financial needs are. This will give you a starting point to begin negotiating your salary.
Be Honest About Your Salary Needs
When deciding how much you need to make to meet your financial needs, be honest with yourself. You also want to be honest when talking to a potential employer. If you can’t afford to take the offer that they give you, be honest.
If you are going to be struggling in the position financially, chances are you will begin to search for another job. This is not beneficial to you or the company that you are applying with. Being honest about your salary needs will give the company a more realistic idea of what your bottom line is.
Let the Employer Talk About Salary First
Although we may be tempted to ask about salary right away, the general rule of thumb is to wait for the employer to bring up salary. Most employers want to get a sense of your skills and abilities before offering a salary range.
We would be kidding ourselves if we said that salary didn’t play a major factor in accepting a job offer, and employers understand this. However, you want to avoid making it seem like this is your sole purpose for wanting the position.
If the employer does not bring up compensation in the beginning, then it is more acceptable to begin speaking about it after two-three interviews. When the topic comes up, provide a salary range, rather than a specific number. Avoid mentioning salary in your cover letter, or during your initial interview (also known as the courtship phase).
Prepare a Counter Offer
Once they offer you the position, the employer will likely open negotiations with their first compensation proposal. This will be the lowest offer, and most companies expect you to negotiate your price. Once you receive your first offer, be sure to give a counter offer of what you want for the position.
Almost half of all employees accept the first offer they receive, not realizing they are selling themselves short.
After you counter with your offer, the employer will either accept or give a counter to your offer until you both reach a number that is fair to both parties.
Salary Isn’t the Only Thing That Matters
When you begin talking about compensation, it’s important to remember that salary is only part of the compensation package. Many companies offer benefits that may make up for a lower salary. If you are trying to decide between two offers, salary is not the thing you should consider. Compensation is not always in dollars. Companies also offer compensation in student loan repayment, vacation days, insurance, continuing education, and other employee perks.
Ask About Their Performance Reviews and Salary Raises
Your starting salary for a new position is important. It is also important to know that you will have the opportunity to grow and receive raises over time. Sometimes you will not be offered your ideal salary, but you may want to still consider the offer if there is are ways for you to reach that salary through raises.
In your interview process feel free to ask about their performance reviews and how compensation correlates with your performance. If the job does not allow for professional growth and compensation incentives, you will want to consider this before accepting any offer.
How to Answer Questions About Salary History
If you can avoid talking about salary history, then you want to do so. However, the chances are likely that this will come up at some point. Many employers may try to base their offer on what your previous company had paid you. This is what you want to avoid. Ideally, you want to be paid for your skills and what you can offer the company. You don’t want your salary to be based on how a previous employer valued you.
If this topic comes up, be honest and do not lie about what you were being paid. Be honest. If your previous compensation does not reflect the amount you are asking for, be prepared to defend your asking rate. Base your compensation on your skills and how they are valued within the industry, rather than the amount you had been paid.
What Not to Do When Negotiating a Higher Starting Salary
There are many mistakes people make when they begin negotiating a higher starting salary. These mistakes can cost you the compensation you deserve, or even the job itself.
- Accepting the first offer that is given to you. As mentioned, almost half of employees accept the first offer that is given to them without every trying to negotiate for a higher salary. Making this mistake means you could end up being underpaid for the job you are accepting.
- Failing to negotiate benefits and perks. Remember, salary isn’t the only part of compensation, and much of it is given through the benefits and perks the company offers. One perk more and more employers are offering is student loan reimbursement. If you just graduated and are offered a position with this perk, it may offset being given a lower salary. Take into consideration how much you pay towards your student loans every month. Would this help you pay back your student loans quicker?
- Not researching your value within the industry. One mistake many people make is going into an interview or accepting a job offer without really knowing what they are worth. How much are your skills valued within the industry you are applying? How does the company you are applying to value its employees? The more research you do about the company and the value of your skills, the more likely you will be able to negotiate fair compensation. Without this research, you may end up being underpaid and accept an offer that doesn’t reflect the work you will be doing.
- Both parties should win in negotiations. Too often we focus only on what we can do for the company and what we can do for the employer. In reality, you need to also think about what the employer can give to you in exchange for your work. When negotiating a higher salary, both parties should feel like they are walking away with value.
- Give a salary range. When you are asked what type of compensation you are looking for, give the employer a range, instead of a solid number. This will give the employer room to negotiate within your expectations. This range should be based on the lowest amount you’ll take and your ideal salary. Again, remember that not all compensation is given through salary.
Before you accept any job offer, you need to know your worth. Understanding how valuable your skills and experience are within an industry will help ensure that you are paid fairly. We all want to be paid more. However, you can’t just walk into an interview and expect them to pay you what you want. Companies expect you to negotiate compensation, so feel free to counter their first offer. The first offer a company gives you is typically their lowest, and they are usually prepared to go higher.
Don’t be afraid or nervous to ask for fair compensation. Be honest with them and let your future employer know what you will need to accept the position. Also, compensation does not always come in the form of a salary and should be kept in mind during negotiations.
Originally published at www.studentloandiet.com on September 19, 2018.