Why are we all so bad at one of the most important aspects of our career, salary negotiations?
No matter how much we prepare for an interview, this is the point where we all fumble the ball. It reminds me a lot of buying a new car. I know cars, I have been in sales my whole life and I know all the games car dealers play. I decide what car to buy, I know the price I want to pay and the best finance options available. Most importantly, I call to find out the market value and exact payoff of my current vehicle, which I intend to trade in. I’ve thoroughly prepared myself to answer that inevitable first question from the dealer, “What do you owe on your trade?” My tactical response will be, “What I owe on my current car is of no concern, you give me the best deal on the car I’m interested in buying and let me worry about whether it’s a good deal for me.” Easy, right? So, when he asks, I take a deep breath and say, “$19, 472.69.”
The same principle applies when we are negotiating a new salary or a raise with a current employer, we mishandle the opportunity and then kick ourselves for weeks because we potentially lost out on an opportunity to earn more. It is much more common for me to have a resume review with a candidate and find them underpaid for their experience, tenure and education than it is to find a candidate that is overpaid. If an employer can underpay you because you sell yourself short in the interview, you WILL be leaving money on the table. Employers are always happy to pay you less.
In an interview, we know we should say,
“I prefer to not discuss my current salary as it’s not relevant to this new role.”
“What is this current position worth in terms of salary to your company?”
“Salary isn’t the only factor in my decision, I am just as concerned about making the right career advancement for my career and what that would mean in salary potential five years from now”.
Yet, what do we say when asked what our current salary is? “63,891.90 and I would need to make at least that to make a change.” No! Stop the presses… this is NOT the right thing to say but we do it every time. It is time we all start to look at salary differently because more often than not it is the driving factor in making a career change and if you are a hiring manager, this is just as important to you. You are probably losing a good employee because of a pay issue and it will cost you dearly to replace that good employee. According to one estimate , in order to replace a worker earning $60,000, reported costs to interview, hire, onboard, train and assimilate a new employee could run as high as $150,000.
Fortunately, there are resources out there for job-seekers looking to improve their skills. Recently, I met Jim Hopkinson, the author of Salary Tutor: Learn the Salary Negotiations Secrets No One Ever Taught You. He offers salary negotiation articles and resources on his site Salary Tutor, (www.salarytutor.com), and works 1:1 with clients to help them discover how much they’re worth and gain confidence for their interview. It seems to be resonating: More than 10,000 students signed up for his free salary negotiation intro course in the first year alone.
“Candidates can be at a distinct disadvantage during a negotiation, because it’s a skill that is rarely taught. Meanwhile, they might be going up against an experienced HR representative that negotiates salary dozens of times per week.”
Employers, if you are reading this, when employees all start to understand their value and market themselves accordingly then your job will get a bit tougher.
According to Jim, “So many job-seekers are so anxious about the topic and aren’t sure what to say, so they simply accept whatever is offered, leaving money on the table. However, nearly all employersexpect some kind of give and take around an offer, so if the candidate takes the time to put in the effort, do the research, learn a few skills, and role-play how the interview might go, they can reap huge rewards. I’ve seen an $11,000 increase from a single email counter-offer, and a $63,000 increase when changing positions.”
Salary should not be our only concern when considering a new position, however we need to do a better job of knowing our worth and the market level salary for the position for which we are applying. We owe it to ourselves to have the negotiating skills to win the best salary that we can obtain. If we better negotiate a salary that will not only cover our current living expenses but also help us to plan and prepare for the future, we will find that we don’t have to change jobs as often. Our career changes will then be driven more by opportunities that arise from our experience, work knowledge and expertise. In the end, we will follow a more rewarding trajectory to the career we have always envisioned.
In closing, I would like to bring both sides closer to the middle…
Hiring managers, please remember that pricing is a signaling device. When thinking about what to pay an employee it is best to not be “penny wise and pound foolish.” In the words of Thomas Paine in the American Crisis, “What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value.” Pay fairly.
Employees, know your value, know the market, know your requirements for not only your current expenses but future expenses and then go to the table prepared to earn what you are worth. If you have done your homework and have solid reasons for the salary you ask for, you might be surprised when you get just that.
You can find a great wealth of information on increasing your career earnings at Jim’s website,www.salarytutor.com.