04 Mar Chapter 5: The ultimate guide to negotiating your salary (AKA making more money)
I honestly believe the biggest problem with mastering negotiation isn’t that you don’t know how to negotiate, it’s just that you don’t have the confidence to negotiate. You either aren’t confident or think negotiation is a slimy, greedy game that you would like to avoid.
I’ve been screwed out of thousands of dollars many times during my career when it comes to salary negotiation, but in the end it’s been the best thing to ever happen to me. That rage inside of me drove me to write this guide with full confidence that it will help others. I know the old way of doing things doesn’t work (here’s looking at you, resume). If you want something you’ve never had you have to try something you’ve never tried. No one enjoys negotiating their salary with their current employer, as I’ve said, it’s easier to just go out and get a new job. But it can be done, as long as you follow my strategy, and regain that confidence that’s been beaten out of you.
This guide is more focused on how to not screw yourself during negotiation and how to get paid what you deserve. A performance review is not going to reflect what you’re actually worth as an asset to the company. If it happens that you end up getting paid more than anyone in your department, then so be it! You deserve what you deserve, and I’m going to do my damn hardest to make sure you get exactly that and not a penny less.
Ready to make some more money? Great, here we go.
Step 1: Know exactly what you want and deserve
Step 2: The answer to all of your negotiation problems: Leverage
Step 3: How to master any negotiation, step by step. (Where the rubber hits the road)
Step 1: Know exactly what you want and deserve.
Confidence can be the difference between a $60,000/year to $75,000 a year salary.
The more confidence you have, the better off you are in a negotiation. If you know exactly what you want and what you deserve, the better off you are.
I don’t mean that you should walk into an office and demand a salary and say: “Take it or leave it.” That’s definitely not what I mean and in fact if you do that, you will crash and burn.
Confidence is the ability to define your real value is and back it up with evidence and facts.
I know it sounds a little too far-fetched. Shouldn’t the work you’ve done already speak for itself? Well, that’s not how this works.
So, how do you get confidence? This works even if you are a pushover, although admittedly, it’s a little bit more work for pushovers.
It’s a 2 step process.
1. Know exactly why someone would hire you.
I’m not asking you to figure out a couple good reasons why someone would hire you. I’m asking you to figure out exactly why someone would hire you.
This is a simple concept everyone seems to forget: employers will hire you based on your perceived strengths. I don’t think you should fake it to you make it. It’s too easy to see past the fake-ness. Evaluating your strengths, what you’re better at than anyone else, is a great exercise that will not only aid you in salary negotiations, it will help you keep your interview skills, and LinkedIn story fresh and up to date.
No one likes talking about themselves, we would rather discuss other people and their relative strengths and weaknesses. The ability to evaluate and observe yourself in terms of what makes you successful in your industry, is something you must do in order to continue to advance. Unless, of course, your goal is to plateau, but plateau’s are a very boring, and financially stagnant places to be.
2. Know exactly what you’re worth down to the exact penny.
The kiss of death is finding out that someone in a similar role at your company is making a lot more money than you. There is no worse feeling in the world, trust me.
You would feel betrayed, worthless and eventually angry as hell. Angry that this company screwed you and that you accepted an offer much lower (than others, respectively) mainly because the company told you during negotiation that “this was the maximum they can give you.” Once you find out a coworker is making a larger salary, you realize this is bullshit. But by the time you do, it’s already too late, you’re locked into this salary. Your negotiation is over, and you were mostly forced into a corner about it.
Do you know how that happened? It happened because you didn’t know what you were really worth, and even worse, you didn’t know how they really valued you. That gap of information usually ends badly for the job candidate. Remember to always mind the gap.
So, how about we avoid this situation? Sounds like a plan. In order to do this, you need to start by negotiating right the first time and making sure you’re on the high end of their pay scale.
What everyone else does: They go on salary websites like glassdoor.com and view what other people at the company and similar roles are making. Then they come up with a salary based on that information.
I give that approach a 4 out of 7 possible points. Sure, it’s decent info to have, but it shouldn’t be the only activity that you’re doing.
These websites tell you what other people are worth, and not what you’re worth. Believe it or not, you don’t have to get paid exactly what other people get paid. In fact, who cares about other people? You should get paid the maximum value of what you are worth to the employer. And so what if that happens to be more than the standard? Better that you shoot for the moon and land among the stars, than to shoot for the stars and crash into a satellite. No one likes to crash and burn on salary negotiations, regardless of the industry.
So, Robbie – How do I found exactly what I’m worth to employers?
There is only 1 way, and you might not like this offer mainly because it requires work.
The single, most effective way to understand your worth is to interview and get as many job offers as you can.
I call this “exploring your options.”
The more you interview, the better you become at speaking with future companies that might have the dream situation you’re looking for.
The more offers you receive, the more information you have about what your real worth is to employers. The more information you receive, the more effectively you can negotiate your salary and focus on your worth and how it will enhance the value of your new company. Your worth monetarily is connected to what you can accomplish for the company.
If after a slew of offers come in, and you still think you deserve more, then the next step is figuring out what the real issue is. Maybe it’s a different job in a different industry. Maybe you’re not stressing the value you would bring to an employer. If you’re not getting the responses you’re looking for, there is a missing element in the process that you’ve not yet evaluated.
When I was applying for consulting roles, every offer came in between $120,000 and $125,000 a year. And I mean every single damn offer. It didn’t matter how I negotiated it. Now don’t get me wrong, this is a great wage to have, but I wanted to break that ceiling. I knew I was worth more, but I wasn’t conveying my strengths to the employers properly. I was still viewed as a junior resource.
This realization allowed me to enter into a different phase of my life which prompted me to learn new things, explore different skill sets and finally smash that ceiling forever. It took swinging for the fences and not getting the desired result for me to see there was a hole in my approach. Keep track of your results, and be honest with yourself. We have to continue learning more and trying different things in order to be the best, and if your value isn’t being represented in the offers, some crucial part of your message might not be getting across to where it needs to go.
Step 2: Leverage, The Answer to all of your negotiation problems
Nothing else matters when you have leverage. If you don’t have leverage in a negotiation, you can throw every single negotiation tactic, tip or trick out the window.
Sometimes, it doesn’t matter how you phrase something. No leverage means you have no negotiation power.
Leverage is the difference between making $75,000 a year or making $90,000 a year for the same job.
How do you get leverage?
A strongly defined skillset
A strong network
A well defined online brand
Leverage #1 – A strongly defined skillset
As mentioned earlier in this guide, it is enormously important to understand your strengths and to communicate your strengths during interviews and via your online persona.
If you know what you’re good at, have some sort of proof that you’re good at what you do, and a prospective employer needs exactly what you’re offering– then you my friend have some leverage.
In addition to having a strong skillset, you need to become a double or triple threat, as I previously mentioned. This technique was coined by one of the greatest copywriters I know: Neville Medhora.
Here’s an example blatantly stolen from Neville’s article. It’s that good.
Single Threat = Knows a skill. Value = $
Double Threat = Knows a skill + another useful skill. Value = $$
Triple Threat = Knows a skill + another useful skill + yet another useful skill.Value = $$$$$$
For example, let’s say someone selling a high-priced product in the financial industry is trying to find a copywriter. Which one do you think would be the most in demand?
95% of workers are single threats. You have zero leverage as a single threat.
Double threats and triple threats are the job candidates that employers want to hire.
So, if you’re reading this and complaining about your job prospects, ask yourself this question:
What kind of threat are you? How can you increase your value by increasing your threat level? In today’s market we are no longer safe staying comfortable at single threat levels.
Leverage #2 – Connections
I hate it when people say “It’s all about who you know.”
Yes, it is true, but I’ve also seen people who are extremely well- connected and still struggle with their career. It’s mainly because those well connected folks, can’t clearly explain their value to their network.
So, instead of “It’s all about who you know,” it should be “It’s all about who knows how I good I am at what I do,”
That’s what you should strive for when it comes to connections.
If you’re looking for more information regarding building a professional network, refer to the ultimate guide to building a professional network.
Leverage #3 – A well defined online brand
I can’t count the number of times I looked someone up on LinkedIn and then met them in real life for the first time, and they were the exact opposite of their LinkedIn profile.
They looked different, what they actually did for a living was much different than they put in their profile.
Your profile needs to be aligned with who you are in real life. It should be the most up to date version of who you are and what you’re doing, that any given day when a person glances at it they find the same information as they would if they met you for an update over coffee that day.
If you’re looking for more information on how to create an amazing LinkedIn profile, take a look at this guide.
Leverage #4 – Social Proof
Social proof, also known as informational social influence, is a psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation. [wikipedia]
Take a look at these statistics when it comes to how we purchase things:
- Over 70% of Americans say they look at product reviews before making a purchase. [source]
- Nearly 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. [source]
The same applies to hiring. Do you know how much easier it is to get a new job if you’ve ever worked at Google, Facebook or Apple? Every company will assume if that you are good enough for Google, you’re good enough for them. So, working for a brand name company early in your career IS social proof.
There are also a few things you can leverage as social proof. Here’s a small list of social proof that you can utilize:
- Being mentioned in an article by a business magazine such as Inc, Forbes, Fortune, Huffington Post, etc.
- More than 10 comments on a blog post you wrote.
- More than 10,000 views on a Youtube video you created.
- Being the speaker or panelist at a well-known conference
- More than 20 recommendations on your LinkedIn profile.
It is important that others see you being validated by others. You can do this without bragging, trust me. There are several areas on your LinkedIn profile that you can include these validations without looking like you are bragging.
Chapter 3: How to maximize any negotiation
Ok, so you have confidence and leverage and now you want to kick some ass during the negotiation? No problem, here’s how.
There are too many books written on negotiation strategies. Some are extremely helpful and I’ve linked a few of my favorites at the bottom of this section.
With that said, I’m going to dive into the most common tactics that can help you maximize your compensation.
Let’s do a quick recap.
- Know why someone would hire you.
- Know what you’re worth.
- Have leverage.
Here’s what comes next.
Maximize Tip #1 – Start High and Know your ZOPA (Zone of Possible Agreement).
The more information you know about what their upper limit is, the better off you are.
Here’s a video I did about this exact topic that goes into deeper detail.
Maximize Tip #2 – Negotiate to a better job title, thus increasing your salary by default.
So, you think you’ve reached their maximum salary limit for your job description? One thing that I’ve done with great success is to start my interviews by asking about the job title above the one they are interviewing me for.
You have to be careful with this, but in some circumstances this makes perfect sense.
So, let’s say the proposed job title is Level 8 Consultant. I would push for a Level 9 Consultant. I did that once and I was able to raise my salary by 35% by just moving up the ladder.
Maximize Tip #3 – Avoid negotiation over email as much as possible.
Want to make a counter-offer? Get on the phone and say it over the phone. Avoid email like the plague.
Several reasons why I recommend this:
- You now have a written record of exactly what you said. It can come back to haunt you, especially if you didn’t say something properly. Your employer now has the proof, which they can bring up again and it can hurt you later. At least over the phone, the exact details or wording are not set in stone, because there is no record. This is almost always to your advantage.
- Tone of the email can be misconstrued and cause issues. You might seem like a greedy bastard over email, but over phone you can do it in a much softer way and have some great reasons why you’re asking for a new compensation structure.
Maximize Tip #4 – You can negotiate more than compensation.
Vacation, your work schedule, your work location are the most common items you can and should negotiate.
My only recommendation for this is to really understand what is and isn’t possible to negotiate. This can definitely work out with your favor when base compensation is not available.
Maximize Tip #5 – When someone tells you “We’ll talk about this after you join,” assume you’ll never get it.
You know when someone says, “Well, this is something we can consider in 6 months.”
Sure, that’s a great gesture, but my answer usually is “Why not now?”
I would also set the expectation to yourself that you’re never going to get it in 6 months. Too many things change in 6 months and it will almost never be in your favor. I know that’s cynical, but you should always protect yourself first, because the company certainly is only focused on their own gains. Why shouldn’t you be?
Maximize Tip #6 – Negotiate with the hiring manager, not the recruiter or Human Resources
I know this isn’t always possible, but when given the opportunity, you should push the negotiation conversation to the hiring manager. The recruiter’s main job is to get you to accept the offer letter at the lowest fair compensation possible. They aren’t trying to screw you, but they’re not trying to get you the highest compensation either. They weren’t in every single interview and have a limited view on what your true value is to the company.
The core to negotiation is to understand your value to the company. The hiring manager has a better idea of what your value to the company is than the recruiter, so because of this, you’re able to push the limit a little higher than you would with the recruiter.
The recruiter often has a “max limit” that they can hire you at. They are instructed to not pass that limit unless instructed to by leadership. By dealing with the hiring manager and leadership directly, you can have an honest and transparent conversation about your value to the company and why you’re worth much more than the original offer.
You’ve done your best to prove your value and at the last second they send you to HR or Recruiting to extend the offer.
Stand Strong. Be Thankful.
You can say “No,” and be respectful at the same time. Don’t get coerced into anything you don’t want to do. If you have a gut feeling something is wrong with the negotiations, walk away and don’t look back.
Get what you’re worth! I cannot emphasize this enough. Know what you deserve and go for it like your future depends on it– because it does. Don’t take anything less than what you’re worth.
Resources I recommend
When it comes to negotiation, I read or buy anything that Deepak Malhotra offers. He’s a Harvard professor focused on negotiation. Here are two books and a video I recommend you buy if you want to go deeper into negotiation, not just salary negotiation.