Negotiating a Better Salary

By Marty Nemko

Negotiating is scary: “If I ask for a raise, might he fire me?!”

Negotiating is especially scary today. With employers cutting labor costs in every way possible—substituting technology for people, offshoring, downsizing, and converting permanent jobs into project-length positions--how in the world can you negotiate a salary increase?

Here’s the advice I give my clients on how to overcome the fear and get that raise.

1. Wait for the right moment. The right time to ask for a raise is right after you’ve achieved something significant, for example, completed a tough project under budget, or when your boss or other key person has complimented you.

But what if you’re a new employee? Your moment of maximum negotiating leverage is when you’re offered the position but haven’t yet accepted it.

2. Assess your negotiating position. Does the boss like you a lot? Is your job essential to the organization? Would it be difficult for the employer to find someone at your current salary who could replace you? Would a new employee need significant time and training to get up to speed? The more yeses, the more money you’re probably safe in requesting and the firmer you can be in responding to a “no.” As important, knowing, up front, the strength of your negotiating position will make you more confident in the negotiation.

3. Try to get your position upgraded. It’s easier to justify a higher salary if you can get your job description changed to include higher-level work.

4. Figure out how much to ask for. If possible, give your boss an estimate of how much your efforts add to the company’s bottom line, and certainly, try to obtain comparable salaries. You may get them at salary.com, a salary survey posted on your professional association’s website, and/or by asking colleagues and recruiters in and outside your workplace. Put those comparables onto a one-pager, and at the bottom, estimate your fair market value in light of those comparables. That will help convince your boss and give your boss something to show to higher-ups to justify giving you the raise. That one-pager will also add to your confidence in the negotiation.

5. Make your boss compete for you. Nothing enhances your negotiating position like another job offer or expression of interest. So, even if you intend to stay put, put feelers out. If another employer or headhunter expresses interest, you can legitimately tell your boss, “I’m quite happy here, but there has been interest from another employer, I have learned that I’m underpaid relative to the market, and so I wanted to talk with you about a raise.”

6. Ask for what you want. For example, “I appreciate your thank-you note, but recently, another employer has expressed interest in hiring me. I’m happy here and would like to stay but I got this list of comparables, and in light of that, I realize I’m significantly underpaid. What do you think?”

On average, women find it more difficult to ask for a raise. In the book, Women Don't Ask, Carnegie Mellon economist Linda Babcock cites research that men initiate negotiation four times more often than women do. If you believe you deserve a salary increase and don't ask for it, it's probably unfair to complain that you earn less than men do.

If the boss says money isn't available, you might try, "Would you like me to work fewer hours until the company's financial situation improves?" or 'Will you give me the raise in three months?" Get it in writing.

If the boss turns you down flat, calmly say, "I understand your position" and leave the room. That often scares the employer more than an aggressive response. Often, within a few days, an offer comes. If, after a week, you hear nothing, come back with, "It sounds like you think my request was unfair. What am I not understanding?"

If you can't get anywhere on salary, and even if you can, you might try for a non-cash, tax-free goodie: the right to telecommute, a more prestigious title, flex hours, an employer-paid week at a professional conference that just happens to be in Hawaii.

The newly hired may face a ticklish situation. For example, the employer asks, "What is your most recent salary?" Your heart sinks because your current salary is $20,000 less than the job warrants. Possible response: "I wanted the opportunity to (learn X, work on Y, or work for Z.) Now, I'd like to be paid fairly. What's the salary range that's been budgeted for the position?" or, "I took a poorly paying job because I wanted an interim position to figure out what I really want to do. This job is it. Now I'd like to be paid fairly. What is the salary range that's been budgeted for the position?"

What if your current salary is higher than your desired position can pay? Model answer: I was better paid for my previous position than this position can pay. I recognize that the job market is tougher now and, in addition, I'm excited about this job, so I'm willing to accept a lower salary."

Advice I’d Give My Child

Don’t overnegotiate. The extra money you get, after taxes, is rarely worth the ill feelings and risk of getting fired. Even if your tough negotiation prevails, your employer will expect top-dollar performance--screw up once and you may be in the doghouse. My rule of thumb: reject the first offer; accept the second.