Between 18-25 years of age, I served in multiple roles in a super regional bank, from Branch Manager to Executive Vice President. While I was promoted over a dozen times to various departments and salary grades, there was one thing that was always consistent: my salary was always 40% more than my peers and even in one instance, over 75% higher than the average person in the same role. Over the years I learned a few tricks that may help you discover how to negotiate a higher or better salary.
Salary Negotiation: 5 Key Questions
Salary negotiation always comes down to these 5 basic questions. The more you know, the better equipped you will be to negotiate fairly in your favor, and less likely to lose the job you worked so hard to get an offer on.
What the role pays?
Be realistic and do research about what the role itself pays. Understanding what the actual pay of someone in that job has allows you to have the right expectation of the pay. A big mistake workers make when negotiating pay is their misunderstanding of the actual pay for the role they are applying for, instead their focus is based on their own existing pay and the increase they want to make.
What your impact will be?
An organization is usually willing to negotiate more with individuals who are in positions that directly impact the bottom line. Regardless that there is high bonus or incentive structures, every organization wants those people who will not only pay for themselves, but also bring net profits to the business.
Understanding if the position you are applying for qualifies as such and what that impact will be can enable you to have massive leverage in getting negotiations to turn in your favor, especially if you have a worthy track record in at the same role elsewhere.
What the range is for such a job within your organization?
Most organizations have ranges for each and every job. Back in my banking days, we used to pay managers who would work for me an average of $65,000 but the range varied drastically for the same role. The lowest for that position was $58,000 and the highest $101,000 for the exact same job.
Most of the hiring managers had the ability to pay up to 50% of that range, but anything higher required approval. While they could pay up to that 50th percentile, many HR managers made offers that started much lower.
Understanding if there is a range for the role you are applying for is very helpful and it enables to know the hiring manager’s limitation and also if its worth pushing for further approval. Keep in mind HR managers work on vacancy rates, but executives do not, meaning the wrong push may result in the offer being made to someone else.
What your worth is on the market elsewhere?
Regardless that you are an internal candidate or external recruit, knowing what someone else will pay for you to work at his or her organization enables you to understand your worth in today’s market place, and therefore allows you to negotiate your next promotion well.
Every 2-3 years, I highly encourage everyone on applying for roles they have always wanted or are one step ahead of where they are today. By understanding what others pay, you are able to see value if your company matches pay but you can easily get a feel for how your industry may have changed from when you were originally hired as well.
Who you are negotiating with?
Negotiations are always between two people and knowing who the person sitting across from you is, including their title and limitations in authority, allow you to know if this is the right person to push to getting what you want.
I have personally realized that when I was interviewing with HR, I would never get the salary I wanted, and in some cases I was even told there was no way around it. When I was, however, sitting in front the right hiring manager, I would end up giving it my all and also mention that I couldn’t work there for less than a certain dollar number.
The person whose role is to hire the right person for their team cares more and therefore will be more likely to pay more for the right person. HR, on the other hand, focuses on filling vacancies and doesn’t have a vested interest in seeing people succeed.
What does it all mean?
At the end of the day, keep in mind that there is more to a job than the entry salary you are offered such as the experience itself, the potential association with the company, or perhaps even the great leadership you would be working under.
Unless you plan to stay in the role more than 5 years, then make sure to understand what you are really giving up before declining an offer that may seem too low.