Career Management - Archive Salary Negotiating

Salary Negotiaton Archive

Getting the Salary You Want
Saying "Okay" can cost you plenty!
by Becky Heidesch

Depending on where your salary is to begin with, you could lose thousands of dollars by simply saying "okay" during the negotiations process. Believe it or not this is what most people say in response to a salary offer. What they are saying is "I'll accept what you've just offered, thank you."

Unfortunately, more times than not this small word has become the very word that ends the salary negotiation process. For the employer - this is the word they are often times waiting to hear. If you can learn one small technique for negotiating a higher salary - learn to "Hmmm" or pause without a word - and watch the effect it can have.

If you're in a middle management position, and the employer says, the position pays $50,000k", an "Okay" response will freeze it right there. But a "Hmmm" response could increase it, and another $5,000 a year which could earn you another $13,668 over three years. Let's take a closer look at what accepting that "first number" can mean over a 3 year period.

Here's a sample situation for an average $50,000k position with an annual 5% salary increase. Employee "A" accepts $50,000. Meanwhile "Employee "B" negotiates for $5,000 more.

Employee "A"

Employee " B"

Starting salary

$50,000

$55,000

5% after year one

$52,500

$57,770

5% after year two

$55,125

$60,637

5% after year three

$57,888

$63,668

3 year difference

$ 7,888

$ 8,668 + initial $5,000 = $13,668

Now you can start to see how accepting a low "starting offer" can add up over the years in lost compensation. Just imagine if you stayed 7 or 8 years! The same goes for all levels - simply pausing or "hmmming" in the process will give you negotiating power.

Research has shown that a "Hmmm" response can drop another ten grand in the bank for high-level executives, and senior-level execs can put a son or daughter through a year of college by swallowing the "okay".

A big fear in negotiating salary is that the employer will change his or her mind about hiring you just because you ask for more. If you've interviewed well (and you must have done that or you wouldn't be getting an offer!), you're the front-runner already! Choosing the second best or going through the whole recruiting-interviewing-hiring process again will cost a company much more than the $5,000 anyway in the long run. Odds are, you'll get that little extra, and the employer will still consider it a good bargain to avoid that hassle.

And what's the worst that happens if you don't? Your new boss will know that you believe you're worth more and treat you better. Besides, you probably aren't even pushing employers higher than they expected to go anyway. Good managers always start low to give themselves negotiating room. They might even really want to give you more, but if you say, "OK," you tie their hands! There is no gracious way for them to raise the offer.

Another good salary tip is considered the "flinch". Salary negotiating experts consider a "contemplative" first response to an offer a "flinch." Even if you're so excited about the offer that you're ready to jump up and down - control yourself - hold back your excitement and enthusiasm and it might get even better!

How do you do this effectively? First, make sure you repeat the figure they give you before going into the "contemplative" routine. By doing so, you are showing the interviewer that you haven't fallen asleep or tuned him out! Then, you say something like, "Hmmm," or, "Does that include a signing bonus?" Hmmm. Isn't that a little low?" Or, "Hmm, really???

Paradoxically, when you do this, you don't just get more money from your potential employer; you make him or her feel better about it, too! How can that be you might be asking?

Here's an every day example. Let's say you're selling your sports convertible. The interested buyer asks, "How much do you want for the car?" You say, "$12,000." If he or she says "Sold!" right away, how do you feel? What's your first thought? Right! You think, "Darn! They agreed too quickly. I was too low. I could have gotten more!"

Now notice what happens if the buyer flinches and says, "Hmmm, is that the best you can do?" You say, "Yes. I have done my research; that's a good deal on this car; it's the best I can do." By the time you close the deal, you still get $12,000, but you also get the inner satisfaction of winning in the negotiations by sticking to your price.

Chances are, your future employer won't come back with a "Yes, I've done my research," etc. Instead, he or she will offer a bit extra to sweeten the pot-they've got room to give a little, remember? Remember - it is OKAY to Negotiate! In the end, you'll both come out ahead. You, with more cash in hand and more motivated in the starting blocks; the employer, with a heightened respect for you.

While it's true, then, that "Anybody can negotiate salary," it's more true to say, "Everyone should negotiate salary." No matter what your level, there's easy money to be made by refining a few negotiating skills. Remember, whatever the job, whatever the position, if you catch yourself saying "OK", pause and instead repeat the offer at loud and say Hmmm. Give it a try, and remember it never hurts to practice or role play with a supporting partner.

Good luck and let me know how you do! bheidesch@wssservices.com

Salary Books to Consider:
The Smart Woman's Guide to Interviewing and Salary Negotiations. Julie Adair King. If you've never done this before (male or female), this is the book for you. Covers: low-impact negotiation-styles, handling nervousness, researching the situation and rehearsing your case.

Perks & Parachutes: Negotiating Your Best Possible Employment Deal, from Salary and Bonus to Benefits and Protection, John Tarrant. Covers employment contracts, both formal and oral; compensation (salary and bonuses); performance measures and termination arrangements. Also included, for your reading pleasure, is the actual text of Michael Eisner's contract with Disney.