Just imagine it. You’re twenty minutes into a job interview, confidently rapping out a list of recent accomplishments in your respective field, and then it happens — the dreaded money question.
“So what are your salary expectations for this role?”
What you say could have a profound impact on your future cash flow. So, how do you handle the conversation that follows? Knowing how to negotiate your salary is a skill — and it’s one you can develop to level up your compensation.
Anxious about salary negotiation? You’re not alone
Only 36% of Canadian job candidates negotiated for higher pay with their last job offer, according to a 2020 Robert Half survey of more than 500 workers and 600 senior managers in Canada . Of those who chose not to negotiate:
- 19% said they felt uncomfortable negotiating.
- 12% said they were worried they might lose the job offer.
- 10% said they didn’t know the going rate for their position.
How much could you lose if you don’t negotiate your salary?
To understand the potential impact of salary negotiation, let’s look at the ten-year trajectory of two hypothetical employees. In this example, both employees hold the same position at the same company.
Employee A accepts their initial starting salary of $70,000. Employee B negotiates their initial offer of $70,000 up to $80,500 — a 15% difference.
Let’s assume both employees receive a 3% cost of living raise annually. Here’s how much these two employees would earn year over year.
|How negotiation can improve long-term earnings|
|Employee A||Employee B|
After ten years, Employee A will have earned a total of $802,453. While Employee B will have earned $922,827. That’s a difference of $120,374.
Now, $120k is nothing to sneeze at, but let’s take this further. Suppose Employee B took those extra earnings and invested them into an index fund that yielded an average return of 8% annually. After ten years, that $120,374 would have earned $64,474 in interest and swelled to $184,848.
Give that a second to sink in. $184,848.
How would it feel to add that sum to your retirement fund? Or the nest egg you’re building for your children’s higher education?
Canadians who choose not to negotiate their salary are leaving serious money on the table. Life-changing money, in fact.
So, how do you navigate the tricky terrain of salary negotiation with confidence and professionalism?
How to negotiate your salary: 6 tips from the experts
Here’s what the experts have to say about successful salary negotiation.
1. Research the market
Get a sense of the salary range for your position and industry by conducting market research. Online databases like Glassdoor and Payscale may help you get started.
“There are many sources online to get an idea of your fair market value for the role, but it is very important to talk to actual professionals in the field,” Sophee Payne, a career counsellor and coach in Vancouver, British Columbia, said in an email. Ask industry professionals to suggest a potential salary range for someone in your field with your skills and expertise, Payne suggested.
“Ask a recruiter,” says Georgia Harper, Canadian director of recruitment for The Headhunters Recruitment Inc. in Vancouver, British Columbia. Recruiters regularly discuss compensation frameworks in their daily work, explains Harper. “Just reach out. We’re accessible. You can find us on our websites and on LinkedIn.”
2. Know what matters to you
Salary is essential, but it’s not the only thing to have in mind when negotiating. There’s also sick leave, vacation time, benefits or the option to work from home.
Take the entire compensation package into consideration before you approach the negotiating table. If the salary offer is lower than you hoped, you may be able to negotiate for other benefits.
“Make sure you have a long list of things you want outside of salary that can make up the difference in what you want versus what they offer,” Payne said. “You could come out with a better compensation package by asking for more vacation or extended health benefits.”
3. Look for the win-win
“One of the things to think about when negotiating is that it’s a relationship,” Harper says. “You want a mutually positive outcome.”
Remember that you’re sitting down with your potential future employer. These are people you may work alongside for years. That means there should be some give and take, especially if you’re excited about the company and believe the position is the right opportunity for you.
“It’s really easy to slip into us versus them during negotiation,” Harper says “It really should be: can we find our common ground?”
Be ready to explain how your requests will set you and the company up for success. And don’t be so inflexible that you can’t land on a comfortable compromise. That said, if things aren’t working out the way you’d like, walking away is an option.
4. Be prepared to walk away
Interviewing with more than one potential employer may result in multiple job offers. And the more offers you have, the greater your bargaining power. If possible, consider job seeking while you’re still employed.
“To get the best deal, you must be willing to walk away. If you are not willing to walk away, you will likely leave something on the table,” George Horvath, a Toronto-based qualified associate financial planner and experienced negotiator, said in an email.
If you’ve already quit your job, and don’t have an income safety net, weigh incoming offers carefully before turning anything down. A lukewarm compensation offer may be worth accepting if you foresee the position offering ample opportunity for career advancement.
5. Learn from rejection
Negotiations don’t always pan out the way we’d like. But if you make a request — perhaps for a bigger salary or more vacation days — and get turned down, don’t be afraid to ask for more information.
“Sometimes the reason an employer can’t provide something has to do with fairness to everybody else,” says Harper. “And it can feel like you’re getting a no, but the reality is that they are caring for their team.”
Tapping into this information about your potential employer can help you anticipate how you’d be treated as an employee and whether you’d fit well with the company culture.
6. Revisit your salary as a tenured employee, too
Salary negotiations aren’t restricted to the pre-job offer stage. Annual reviews and promotions with your employer are also opportunities to raise your going rate.
“Know your company policy,” says Harper. “If there are salary reviews annually, then make sure you know what’s coming up.”
Whether you have the conversation during a regularly scheduled review or opt for something more impromptu, be ready to make a case for why your employer should increase your salary. Provide documentation of achievements that demonstrate your ongoing growth and increased value to your employer.
Can you lose a job offer by negotiating salary?
Losing a job offer is a risk you take when you step up to the negotiating table, but in Payne’s experience, it doesn’t happen all that often.
“For most industries and roles, no. And if it did, it would probably be a good sign that the employer is not for you,” Payne said in an email. “One exception that may cause the employer to rescind an offer is that the candidate is repeatedly crossing a boundary set by the recruiter or company.”
If you ignore a firm salary range and continue to push for more, you may risk souring the negotiation. Remember: you’re building a relationship with what will hopefully be your future employer. When both parties win, you set yourself up for professional success.
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