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.
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