Ace your salary negotiation
While negotiating for a higher salary might seem daunting, whether you’re starting a new job or asking for a raise, smart strategies can make it easier.
Many people don’t ask for a higher salary because they fear offending their manager or appearing too aggressive. It is important, though, to ask for and negotiate a higher salary. It can give you a lifetime of higher earnings that can total more than half a million dollars.
Awkward as the conversation may seem, making more money often means asking for a higher salary. However, many people don’t even ask.
While research here is limited, a survey by personal finance website Nerdwallet in the United States found that only 38 per cent of new university graduates negotiated their salary, even though 80 per cent of hiring managers were open to discussing it. And women were even more reluctant than men, with 29 per cent fewer women saying they would negotiate job offers.
Seasoned employees are hardly any better. Research by recruitment firm Robert Half found that only 39 per cent had negotiated a salary in a new job. Research by compensation website PayScale’s showed that 57 per cent of people have never negotiated for a higher salary at all.
Research also shows, though, that asking for more makes a huge difference.
A study led by Associate Professor Michelle Marks from George Mason University in the US showed that an employee who negotiates a starting annual salary of S$55,000 would earn S$600,000 more over the course of their 40-year career than someone who accepted S$50,000, assuming average annual pay increases of 5 per cent for each person.
PREPARING FOR NEGOTIATIONS
While negotiating for a higher salary might seem daunting, whether you’re starting a new job or asking for a raise, smart strategies can make it easier.
Start by tracking your successes and building a portfolio of reasons why you should get a raise. If you delivered more revenue, a better customer experience, higher efficiency or other benefits to your company, be ready to tell exactly what you did to add value. If you’ve recently scored a big win or finished a successful project, use that milestone to make the case.
Next, figure out how much you should be paid.
Singapore sites for salary comparison firms such as Glassdoor.com and Payscale.com can tell you how much you should be making. Glassdoor indicates that an assistant vice president at DBS would make about S$90,000 a year, for example, while the Michael Page Singapore Salary Benchmark shows that a software developer with 10 to 15 years’ experience makes about S$120,000 a year.
If your salary is less than what it should be, it’s time to negotiate. Knowing the pay gap is especially important for women, since Ministry of Manpower data shows that women make 18 per cent less than men.
If your research reveals that you’re being underpaid by 20 per cent, for example, that gives you a place to start and data to explain exactly how much more you should make.
PITCHING YOUR REQUEST
Once you’ve established why you deserve a raise and how much to ask for, practise the conversation. Consider your organisation’s performance, culture and market conditions as well as your manager’s style.
Make sure you sound enthusiastic, confident and reasonable. You could say something like, “Thanks for taking the time to meet me. I’d like to discuss my performance, the contributions I’ve made, and how that positions me in terms of salary and opportunity here at the company.”
Research led by researcher Jens Mazei from the University of Munster in Germany showed that women who have negotiation experience and information about salary ranges can do better, so preparation matters — especially for women, though also for men.
Then, schedule a meeting with your manager to talk specifically and only about salary, rather than talking about it as part of another conversation.
Start by talking about the value you bring to the company rather than making any apology.
Then, wait for your manager to make an offer rather than giving your number first, since you don’t want to anchor yourself too low unknowingly.
When you do respond, stating a precise number is helpful. Research by Columbia Business School’s professors Malia Mason and Daniel Ames showed that asking for a specific amount such as S$5,015 rather than a rounded–off amount such as S$5,000 can give you the upper hand during a negotiation. The person making a precise offer is successfully giving the illusion that they have done their homework, leaving other person believing that there is less room to negotiate.
If your manager does not initially accept your request, demonstrate that your requests are justified by showing how the company benefits from your expertise by citing those examples of how you have added value to your workplace.
If you don’t get an increase in salary and are willing to accept something else, you could alternatively ask for more stock, benefits, flexible time, vacation time or bonuses.
Critically, if you don’t get a raise, don’t get discouraged. Most managers will respect you for asking for what you deserve. And, you can always ask again later.
Since not negotiating a higher salary or asking for a raise makes such a tremendous difference in your lifetime earnings, it’s essential to ask when you start work and then continuing asking regularly.
Preparation, practice and confidence can give you far higher earnings than you might ever have expected.
