Hiring is booming! As the economy and employees emerge from the pandemic shutdown there are far more job openings than there are candidates. Should be easier to succeed at salary negotiations in this type of market, right? Yes, but there is still a right way to negotiate and a wrong way. Whether you are trying to stay with your current company or looking outside, here are some tips for proper and successful salary negotiations.
An Indeed survey found that 70% of managers expect candidates or employees to negotiate their salary and benefits. The same survey showed that 58% of respondents claim to have never or rarely tried negotiating their pay versus 12% who always try to negotiate. There is a gender gap here, too. Forty-four percent of women do not feel they are paid fairly for their work which is a stark contrast to 74% of men who agree or strongly agree that they are paid competitively.
On average it costs companies between 125% and 200% of your salary to replace you. This is significantly more than you would ask for in a salary negotiation. The average U.S. salary increase is 3%, but companies find salary asks of a 10% increase reasonable given the expectation is justified.
Do Your Research
One thing that is driving salary discussions and pay transparency is the availability of information about salaries on the internet. Use it! Online resources like Glassdoor and PayScale are invaluable. There may be specialized information on your particular career area put out by recruiting firms and professional societies that you can utilize.
Know how your company or the company you received an offer from is doing financially. How has Covid affected the company? If major layoffs and budget cuts have been the norm, now might not be the right time for aggressive salary negotiations, or maybe the position you are in or are being hired for is critical to the company recovering from the pandemic.
How to Ask for a Raise
Lead with gratitude. If you like your company and your work, make that clear. If you’ve received an offer at a desirable company, make it clear you are flattered and excited by their interest.
Frame the ask by how it is beneficial to the company to keep you or hire you, not just the benefit to you.
Aggression in salary negotiations is not the right approach. Don’t say “I’ve got another job offer and will leave unless you match the salary.” Instead say, “I love this company and I think I’m making a big contribution but another company pursued me and I was surprised at the compensation they offered. Can you help me close the gap so I can stay here?” Be positive and conciliatory.
Find something else. If base salary doesn’t seem negotiable, ask for something they will find it harder to say no to. The changes to the work environment and work relationships brought on by Covid has made companies open to more creative solutions. Are there projects you want to get involved in, additional experience or training you could monetize later, a better title that might be in a higher pay band that will set you up for an increase at your next review, a senior responsibility you take off your boss’s plate or even additional support where you can increase your management responsibilities or at least delegate more junior tasks. For offers with a new company is paid time off, a sign-on bonus or an earlier performance review negotiable. Of course, remote and hybrid work schedules are top-of-mind now, too.
Salary negotiations are critical to your long term financial and career success. Don’t avoid them!
Interested in talking how your salary fits into the competitive marketplace? Contact Smith Hanley Associates’ Executive Recruiter, Nancy Ragonese at firstname.lastname@example.org.