How I Negotiated My Salary For the First Time
Since I graduated college (10 years ago) I have had 5 jobs. Recently, I was randomly sought out by a rival firm. So, I accepted an offer for company #6. Job hopping has allowed me to increase my salary over $60,000 in the last five years. I was able to get a bigger jump in salary when moving jobs as opposed to only getting annual raises. Although I have asked for raises in the past, I have never negotiated my salary when offered a job. Not negotiating likely has set my salary back. Even negotiating for an additional $5,000 over my past 5 different companies would have equated to $25,000 more. That creates a much different starting point, leverage, and decision-making position.
However, I negotiated my salary for the first time for company #6!
I'll admit I was nervous and the conversation was awkward in my opinion, but the end result landed me more money and a salary I am more than happy with.
That said, I received lots of encouragement and help from Mr. FIREat40. Also, I had a plan of attack in how to address the conversation.
Plan of Attack:
- Determine your goal salary and minimum salary requirements. I examined my current salary and role. Then I assessed the new company, the expertise I am bringing, and my new role. I determined my goal salary for the new job (a 14% raise). And I also determined what the minimum amount of money I would accept (7% raise). After all, they were seeking me out!
- Outlined all possible salary scenarios. I made a chart of all possible salary scenarios. The chart started with the lowest salary option and no sign-on bonus to the highest salary (within reason) that included a sign-on bonus.
- Outlined all possible counters. Next to each salary option I determined, I listed a counter offer. The counters were determined with the following philosophy: the lower the offer, the larger the counter. If they tried to low-ball me, I would counter with a 21% raise increase. That is significantly higher than what I want, so the idea is that we could eventually get to a middle ground. Ultimately, the chart looked something like this:
- Wrote out why I deserve the amount I am asking for. If I was asked to justify why I wanted an increase over the amount offered, I wanted to have some key points outlined. I wrote down the value I bring to the company and the new expertise that I offer that the organization does not currently have.
- Practice. Mr. FIREat40 and I did a practice run in which we ran through a few scenarios and push back. That was a really helpful process when the real conservation happened.
- Support Team. Mr. FIREat40 was REALLY supportive during the entire process. He was actually the one that came up with the chart, because I would have undersold myself. He assured me not to feel bad about asking for more, not to second guess myself, and TO ASK FOR MORE - no matter what they offered.
So what happened?
In a previous conversation I was pressed on my current salary - although it is illegal where we live. I ultimately told them the amount I currently make. I knew this would likely to lead to a low-ball offer even though I was being recruited and headhunted by this firm.
And that's exactly what happened. The initial offer was a 5% raise with a $10,000 sign-on bonus. The sign-on bonus was a good surprise, but the low base salary was not happy news. So I looked at my chart and countered with a 18% increase in my current salary.
I then was asked why I think I should get that much. I was then able to look at my talking points and discuss the value I bring to the organization. And then asked how much they could increase the base salary.
They were able to come up to an 11% increase over my base salary along with the $10,000 sign-on bonus. This was very satisfactory to me and I verbally accepted the offer/job right then and there.
The conversation was little awkward, but after the negotiation things quickly changed to establishing a start date and other administrative items. The call ended on a happy note for all parties.
So for those negotiating salaries for the first time - there is really nothing to be scared of. Just determine your worth, outline why you desire it, and stick to your guns! Mr. FIREat40 is a firm believer that almost all people giving you a job offer expect you to negotiate. Unfortunately, some people fail to negotiate, leaving money on the table. There will be no easier time for you to get more money than when you are accepting a job offer.
I find that no one really talks about negotiating salary, so we would appreciate other tactics people have used in the process. Let us know in the comments below!