Not negotiating a fair salary at the beginning of your career is a mistake that is incredibly costly over time. Why? Because even a small bump in pay translates into bigger annual raises and possibly bigger bonuses as well, year after year. In fact, according to Professor Linda Babcock, a Professor of Economics and Co-Founder of Carnegie Mellon’s Negotiation Academy for Women, not negotiating a fair salary at the beginning of your career is like leaving anywhere between $1 million and $1.5 million on the table in lost earnings over your lifetime.
Yikes.
Even with so much at stake, however, twentysomethings just starting out in the work force may find salary negotiations awkward and intimidating. This is particularly true for women. Studies have shown that as a rule, men initiate salary negotiations about four times as often as women. In addition, women enter negotiations with pessimistic expectations so that when they do negotiate they typically ask for less; 30% less than men. Many women simply don’t think of asking their employers for more money; or if they do, they find the idea too intimidating to pursue.
If you are just starting out in the work force, here are six suggestions to help you feel informed, relaxed, and confident during your salary negotiations.
- Ask yourself the question first. The fact is, most people have no idea what a fair salary is for them. Women in particular don’t tend to give the question much attention; in fact, for many women, there’s a real reluctance to confront the question at all. So the first step is to ask yourself: What would be a fair salary for me? Get comfortable with the question. It’s important and deserves to be addressed.
- Deflect the salary requirement question. You may be asked for your salary requirements on a job application form or during an early interview. If possible, simply answer “N/A” on the form, or if you are asked the question in person, respond with something like, “I’m sure we can find a number that will be fair, but first I just want to see whether this job is a fit on both sides.” You will be in a better negotiating position after the hiring manager has decided that you are a strong fit for the job.
- Get the data. Don’t rely on assumptions or hearsay. To be in a strong position to negotiate a fair salary, you it helps to have current data: What is someone in a comparable role, in the same industry, being paid today? Accurate information will bolster your confidence as the negotiations warm up. If you use free salary data sites, like Salary.com, Glassdoor.com and Payscale.com, be aware that they generally rely on self-reported data, which may not be as accurate and, as such, less useful.
- Informational interviews are your friend. Interview a One of the best things you can do to prepare for salary negotiations is to interview as much as possible, even for jobs you don’t think you particularly want. In fact, with less at stake, you will probably feel more comfortable asking hiring managers (for example) what the market is like in that city for someone with your particular skills and experience. Take the opportunity to learn as much as you can during these interviews. Use all the feedback you get to form a clearer picture of the industries and career paths that interest you – and that demand your talents. All this interviewing will enable you to come to each succeeding interview more prepared: knowledgeable, relaxed, and armed with real information.
- Strategize with a coach. Once you have the salary information you need, it’s time to plan for the actual salary discussion. Consider asking a professional salary coach for help. A good coach is able to assess your situation and recommend specific tactics to use in your negotiation. You may also want to find a mentor, someone experienced and knowledgeable in your field, to help you prepare.
- Don’t be afraid to get creative. Negotiating a fair compensation package is about more than just salary. Some new hires negotiate for other valuable benefits such as additional vacation time, flexible hours, a fully loaded new work laptop, or even unusual perks such as monthly dinners with the company CEO. Another way to be creative with your salary negotiation is to take a long term approach to getting the compensation package you want. Work out a long-term plan with your future boss to earn a raise in the future. The more specific the plan, the better. Specify deliverables and a time frame for each. Once you meet the agreed-upon goals, your boss will find it very difficult to refuse you the raise you’ve demonstrated you deserve.