As part of our mission to share our decades of combined experience with recruiting, this week we’re offering some lessons about how to figure out the thorny question of negotiating a salary.
Look around the internet and you’ll see a fair amount of salary negotiation advice. Some of it is fairly useful common sense – e.g. “Do your research before arriving at a number to target.” Some of it is contradictory – some online guides will tell you to “strike first” and mention your number before the hiring manager makes an offer, whereas others will tell you to hold out and let them make the first offer. Some of the advice you’ll see is borderline-ridiculous- – for example, the suggestion that candidates should sit in literal silence across the negotiating table until the hiring manager “blinks.”
At Argentus, we stand at the fulcrum between candidates and hiring managers. We only make money when both sides are happy, so we’re well-versed in smoothing over salary negotiations to arrive at a positive outcome. We’ve also seen lots of situations where salary negotiations go south and ruin a situation that’s a good fit otherwise. Like any negotiation, it’s a tricky and nuanced social process, and there are no hard-and-fast rules. But there a few tried-and-tested techniques that you can use to set yourself up for success. It’s exceedingly rare to use salary negotiations to get a massive raise beyond your expertise – but a few fundamental principles will help you get the salary that you deserve.
Here are a few of our tips:
1. Do negotiate, unless it’s an entry level role.
One thing we’ve noticed is that people working in fields with lots of negotiation love to negotiate their salaries. It’s true in Strategic Procurement, which is one of our biggest recruitment practice areas at Argentus, and it’s especially true at the senior leadership level where candidates are expected to negotiate with big suppliers for big cost savings and extra value. It makes sense: showing backbone in a salary negotiation is almost a final stage of the interview where you show your prospective employer how you’re willing to play hardball in negotiations for them.
But even if you’re not in a senior leadership position, and not taking on a job where you’ll need to negotiate, it’s important to recognize that you can negotiate when you’re close to securing a role. The biggest salary negotiation mistake that people make is assuming that they can’t negotiate at all. The exceptions to this are if you’re applying for an entry-level position (where you don’t have as much of a track record to use as leverage), or if you’re applying for a position where the job description has a hard and fast salary cap. Sometimes, there are internal factors (such as maintaining pay equity) that lead companies to have a hard cap, preventing new hires from negotiating higher. Which leads us to our next point:
2.Sometimes, you should be up front with your salary expectations early on – especially if you’re working with a recruiter.
A common piece of salary advice is to put off talking about your salary expectations until the last possible moment. The thinking behind this is sound: you want to build interest in your candidacy and reel the company in before revealing the price tag. Money is obviously the brass tacks fundamental consideration at the end of every job interview process, but if you make the interview process about the job, and ensure that’s a good fit, it’ll be easier to figure out a salary both parties can agree on later.
Which is true: however, there are situations where you’re going to talk about salary up front. Specifically, a recruiter isn’t going to submit you as a candidate for a role unless they know that your salary expectations align with the client’s expectations. For this kind of job search, you want to be up front with your salary expectations. This can actually make the process smoother for everyone because there won’t be any surprises. It lessens your ability to negotiate at the offer stage, but if you’ve done your homework you can ask for your target salary early on and avoid spending time on a role that isn’t going to pay as much as you want.
Note: it’s crucial, especially when working with a recruiter, to ensure that there aren’t any major surprises at the offer stage in terms of your requested salary. Sometimes candidates – whether they’re working with a recruiter or not – will mention a salary target early on, only to raise it drastically once the company is interested in hiring them. This bait and switch never works, because even if the company’s interest in your candidacy has given you more leverage, the dishonesty craters your credibility.
3. Base Your Negotiations on Research, Not Desire:
No matter what sort of approach you use, it’s important to base your salary negotiations on research rather than desire. “I wish I was making more” is not a good reason, when switching jobs, to ask for more than you’re earning now. Instead, try: “I’ve researched similar positions in this market, and based on my X years of experience and Y levels of proven contributions in similar roles I feel that Z is an appropriate salary.” That approach is more likely to give you results while proving your level of competency.
It’s worth mentioning here that companies (and recruiters) in negotiations will sometimes ask you what you’re making now. If you divulge that information, it can harm your leverage in a salary negotiation. Instead, speak in terms of what you’re targeting for your next role – but make sure that you base this number on research about the market, rather than whim. A lot of careers have fairly well-defined salary trajectories (e.g. Supply Chain, Procurement, Logistics), and companies also do their research about market rates. If you try to highball them, they’ll know. Which doesn’t mean you can’t seek a significant raise in compensation; it’s a big reason that people switch jobs. But the more research you can arm yourself with, the more leverage you’ll have in any salary negotiation.
4. Think About Compensation Beyond Base Salary, and Don’t Be Afraid to Ask for it:
Money will always talk in salary negotiations. It’ll always be the biggest thing. But other forms of compensation and talent attraction are becoming increasingly important. Work/life balance, work from home, vacation time, car allowances, relocation costs, stock options, and other factors are tools in your negotiation toolbox. This is especially true the more experience you have, and the more you’ve been able to demonstrate an impact in your previous roles. Sometimes companies are unwilling to raise base salary due to factors like internal pay equity, but in these cases they’re often willing to play ball with other perks. If you think there isn’t much breathing room in terms of base salary, and a company is getting ready to make you an offer, start thinking in terms of how you can leverage these other factors to increase your compensation – within reason, of course.
One other thing to consider is that sometimes you just can’t negotiate a higher salary. But that doesn’t mean you shouldn’t think about accepting a new job! More responsibility and more growth potential within the company can actually be far more impactful than a slight salary boost. Sometimes a lateral move can set you up for a massive leap in your career. In general, it’s important to take a strategic, holistic look at what a job is offering instead of fixating on base salary – as important as it is.
A Note about Counter Offers:
As we’ve written about before, there’s another situation to consider when you’re negotiating your salary for a new job: the counter offer from your current employer. Sometimes they don’t want to lose you. Sometimes people go about job searching trying to get job offers with lucrative salaries just to gain leverage to get more money from their current employer. But seeking or accepting a counter offer almost never works out. In our experience, candidates who accept counter offers from their current employers tend to only last another 12-18 months with that company. Either the company sees you as disloyal going forward, or recognizes that you have one foot out the door, or feels that you’ve used the competing offer to “extort” them into offering you a higher salary. In our experience, it’s better to negotiate for a higher salary for your current role based on research than it is to get competing offers and risk your credibility.
Hopefully this provides some good nuts-and-bolts advice about what to think about when it comes to negotiating salaries. These aren’t the kind of sales tactics that will help you fetch an unreasonable amount. Those situations never work anyway. Instead, we hope this article offers the kind of advice that will help you close the deal in a way that satisfies your goals without scuttling the entire process.