Salary negotiation is something that everyone should learn. Increasing your income early in your professional life can help set you up for a more lucrative career, stable finances, and comfortable retirement. And every time you don’t ask for a higher salary or raise, you limit your potential earnings from that moment on.
The fact is, you have little to lose. According to LinkedIn, less than 1% of people reported that a job offer was rescinded after they tried to negotiate their salary. And 80% of those who negotiated saw some increase in their compensation package.
Read on for negotiation tactics and strategies to help you climb higher on the compensation ladder.
Best Salary Negotiation Tactics
To negotiate your salary, you need a well-prepared, data-supported argument as to why you deserve higher pay. The next task is to deliver that argument confidently and convincingly. Here’s how.
Research the National Average Salary
Before you begin the negotiation, check the national and local average salaries for jobs similar to yours. The best sources for this information are Glassdoor, SalaryExpert, Salary.com, Indeed, and the Bureau of Labor Statistics (BLS).
Once you have the data, compare your salary to others’. You may adjust your expectations based on the demand for the type of work you do and the cost of living in your area. The latter is why salaries vary from one region to another.
Salary negotiation is something that everyone should learn. Increasing your income early in your professional life can help set you up for a more lucrative career, stable finances, and comfortable retirement. And every time you don’t ask for a higher salary or raise, you limit your potential earnings from that moment on.
The fact is, you have little to lose. According to LinkedIn, less than 1% of people reported that a job offer was rescinded after they tried to negotiate their salary. And 80% of those who negotiated saw some increase in their compensation package.
Read on for negotiation tactics and strategies to help you climb higher on the compensation ladder.
Best Salary Negotiation Tactics
To negotiate your salary, you need a well-prepared, data-supported argument as to why you deserve higher pay. The next task is to deliver that argument confidently and convincingly. Here’s how.
Research the National Average Salary
Before you begin the negotiation, check the national and local average salaries for jobs similar to yours. The best sources for this information are Glassdoor, SalaryExpert, Salary.com, Indeed, and the Bureau of Labor Statistics (BLS).
Once you have the data, compare your salary to others’. You may adjust your expectations based on the demand for the type of work you do and the cost of living in your area. The latter is why salaries vary from one region to another.
Understand Who You’re Negotiating With
Understanding the hiring manager’s position and negotiating style will give you the upper hand and help you choose the right strategy.
According to the Black Swan Group, there are three types of negotiators, and each requires a different approach. This is valuable insight whether you’re negotiating your salary or trying to win a real-estate bidding war.
1. The Analyst
The analyst tends to be realistic and not stirred by emotional arguments. They base their decisions on data. With this type of negotiator, have plenty of salary comparisons to back up your desired salary.
2. The Accommodator
If the person you are negotiating with is friendly and talkative, they may be an accommodator. That means a good emotional argument may sway them. Present your data and comparisons, but also emphasize that your desired salary will ensure you are happy, engaged, and better equipped to do your job.
3. The Assertive Negotiator
This type of negotiator is a no-nonsense, get-to-the-point type of person. They view negotiating as a welcome challenge, so you’ll need to be on your toes. Your data, in this case, will be less effective, so the best approach is to state your demands confidently yet politely and be prepared to walk if they aren’t met. Be willing to revisit negotiations later if you do not succeed with the assertive negotiator the first time around.
Wait for a Job Offer to Negotiate Salary
It’s a good idea to delay salary negotiations until you have received a formal job offer. At that point, the employer has invested significant time in making sure you are the best candidate, so they are more likely to acquiesce rather than risk losing you. You can put off the conversation by remaining non-committal about salary until the time comes.
Let the Hiring Manager Make an Initial Offer
Often, a company will either tell you their budgeted salary range or ask you for your desired range. In either case, it’s customary to let the hiring manager make the initial offer before you start to negotiate. This will give you some idea of what you are working with.
Make a case for why you deserve a salary on the higher end of their range. Perhaps you have substantial experience or other skills that are unique to you, in demand, and valuable to the company.
Disclose Your Previous Job’s Salary
Some experts recommend not disclosing your previous salary because companies use it to gauge your worth. However, disclosing your salary gives the hiring manager an idea of what salary you might be expecting. When you start negotiating, you can still make a case for a higher salary based on your research into comparable jobs and your expertise.
Include any benefits you received from your past employer, such as bonuses, stock options, and other perks.
Discuss Current Job Offers from Other Companies
If you are lucky enough to have multiple job offers, you are in a strong negotiating position. It’s wise to tell a hiring manager you have another offer because it will encourage them to offer more sooner. The fact that you are in demand is proof of your value, and the longer they negotiate with you, the greater the chance that you could accept a competitor’s offer.
Choose an Appropriate Time
The best time to negotiate your salary is once you’ve been offered the position and before you sign a contract. If you are negotiating a pay raise with your current employer, your performance review is a good time to broach the subject.
It helps to discuss a potential pay raise months in advance. That way, you and your manager can agree on what you need to do to earn a pay raise and document it in your performance appraisal. Once you feel you have achieved those objectives, bring up the subject of a raise again and explain why you feel you deserve a raise.
Be Confident
The more confident you are when negotiating your salary or a raise, the more convincing you will be. Hold your head high and make your pitch clearly and without hesitation. Start the conversation off positively, and explain why you think you deserve more compensation. Then give the reasons why. Don’t rattle off a bunch of things, but present one or two data-backed arguments. For example:
“I’m really excited to work here, and I know I will bring value. I appreciate the offer at $63,000 but was really expecting to be in the $70,000 range based on the market and my past performance. Can we discuss a salary of $70,000?”
If all this has whetted your appetite for negotiation, don’t miss this advice on how to be a world-class haggler.
The Takeaway
Negotiating a salary does not have to be nerve-racking. If you have done your research and have identified a fair salary based on the market and your skills, be confident and do not accept anything less. The more in demand your skills are, the more you can ask for in terms of salary.
Remember to consider other perks and benefits when negotiating. Extra time off or stock options may be more valuable to you than an additional few thousand. The worst that can happen is that you decline an offer and move on to another employer who will pay you what you are worth.
FAQ
What are the five basic negotiating strategies?
The five negotiation styles are competition, collaboration, compromise, accommodation, and avoidance. Competitive negotiation uses hardball tactics regarding the other party’s needs. A collaborative style uses a win-win approach and aims to meet the needs of both parties. Compromising is one of the more common negotiation tactics, but the result may be that neither party feels fully satisfied by the outcome. Accommodation is a style used when harm has been done to either party because it requires one party to “accommodate” or make repairs. Last, avoidance means avoiding negotiating entirely.
What are the best negotiation strategies and tactics to use when negotiating your salary?
The best negotiation tactics involve developing a convincing argument by researching the market rates for jobs similar to yours and considering the cost of living and the demand for your skills. Know the personality of the person you will negotiate with and choose a negotiation style that works for them. Next, pick the right time to negotiate and do so confident in the knowledge that you are worth the salary you are asking for.
What are the 4 C’s of negotiation?
The four C’s of negotiation are civility, competition, compromise, and compassion. When negotiating, it’s important to remain civil and avoid conflict by accepting that both sides have a legitimate point of view. It is inevitable that there will be some degree of competition during negotiation; each side wants to win. Compromise is often considered a sacrifice, but this ignores the idea that negotiation is a problem-solving strategy. Compassion contrasts with competition and calls for empathy and appreciation of the other side’s perspective. There must be a balance between competition and compassion in the negotiating process.
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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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My rent is astronomical! Can I negotiate a better price?
The surprising answer? Yes.
It may sound intimidating (or simply futile). But, with a little research and a well-thought-out approach, it may be possible to negotiate your monthly rent, and land a better deal.
Your chances of successfully lowering your rent will likely depend on a number of factors, including the going rate of comparable rentals in your area, the value you present to your landlord, and the state of the rental market and economy in general.
To reduce the awkwardness of bringing up the subject (because, yes, haggling can be uncomfortable), and increase your chances of sweetening your deal, you may want to try some of these smart negotiating techniques.
Related: Negotiating a house price
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The obvious payoff of reducing your rent is more cash left over at the end of the month.
But you may also want to consider the longer-term benefits. Let’s say you’ve successfully negotiated your monthly rent down by $100.
It’s nice to have that extra $100, of course. But over the course of a year, that monthly savings adds up to $1,200.
Let’s say you applied that $1,200 yearly savings to paying down credit cards or a student loan debt (rather than paying the minimum).
You might be able to save significantly on interest payments, and also boost your credit score (which could help you save money in the future by helping you to get loans and credit cards with better terms).
Recommended: What Credit Score is Needed to Rent an Apartment in 2022?
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Or you could funnel that monthly $100 saved into a checking and savings account and start building a down payment on a home (if you’d prefer to own vs. rent) or an emergency fund or working toward another savings goal.
If you were to invest an extra $100 into your 401k or other retirement fund each month, it could yield a significant income stream decades from now. (If you’re already contributing to these accounts, be aware of the annual limits.)
In addition, by learning how to negotiate, you’re also developing a lifelong skill of standing up for yourself and cutting better deals as an experienced negotiator, which could pay off in other areas of your life.
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As eager as you may want to cut a good deal, and as quickly as possible, it can be wise to time your approach to maximize your chances of success.
That means negotiating at the right moments, when your landlord may be more amenable to cutting a deal.
Those timed might include:
- The end of the month, when other tenants may have vacated the property and your landlord may enjoy the stability of a long-term tenant.
- 90 days or so before your current lease expires. That’s enough time to offer to sign another lease, but only at terms favorable to you. If you’ve been a good tenant, and the market is soft for new tenants, your odds of renegotiating a lower rent may be stronger.
- At the beginning of the calendar year. Typically, winter is a slow time for property rentals, especially in the colder climates when moving is more difficult, and it may be harder for landlords to find new tenants. Stepping into the vacuum with an offer to stay another year–at a lower monthly rental price– might give you some new-found leverage.
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To help build your case when approaching your property owner about a rental deduction, it can help to know the lay of the land.
If you can prove that you could live more inexpensively in a nearby rental, your landlord may be more inclined to grant a discount, rather than lose your business to the competition.
For that reason, it’s a good idea to do a little digging and comb through online listings to find out the rents of comparable units or properties in the area.
Perhaps a similar one-bedroom apartment for rent has an amenity that’s not offered at the apartment you’re currently in or considering. You might point out how these factors make the landlord’s rental terms somewhat higher than the going market rate.
When you speak to the landlord, it may help to have a printout of comparable apartments that are slightly lower in rent and, if the unit has been unoccupied, have this information on hand as well.
You may also want to check what other apartments in the same complex or rented out elsewhere by the same landlord currently cost. This can help keep you from overpaying for an apartment and may also help you negotiate a lower rent.
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If you can afford it, adding a lump-sum payment – say, three months of rent upfront – may strengthen your bargaining power, and boost your odds of reducing your overall rent payment.
That’s because many landlords prefer having rent in hand, and not having to worry about late or no rental payment from tenants.
What’s more, offering an upfront, lump-sum payment is one way to show a landlord that you’re serious about being a solid tenant.
A landlord may be more amenable to doing business with a tenant who is willing to go the extra mile – and may be more likely to get on board with a rental discount.
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If you particularly like the house or apartment you’re renting, you might consider offering the landlord a longer lease in exchange for lower rent payments.
If, for example, a landlord is offering a 12-month lease to a new tenant, at a fixed monthly rental price, and you agree to extend that lease to 18 or 24 months, you might be in a stronger position to ask for a rental discount.
All things being equal, landlords tend to favor tenants who’ll be around for the long haul, and may be more likely to green-light a lower rent for a longer lease arrangement.
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Landlords typically loathe empty apartments, so if you can help fill a rental unit with a referral or two, it might put you in a better negotiating position to ask for a rental price deduction for helping out.
Rental unit owners usually have to pay for classified ads to lease their open units. In addition, landlords often have to put some sweat equity into showing units, chasing down tenant leads, and vetting potential lease applicants.
By bringing your landlord good, qualified, and stable tenants, you may be able to become a valuable asset for your landlord and help build a more robust case for a rental deduction in the process.
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Yes, the primary goal in a rental negotiation is to bring the price down.
But in case that conversation proves fruitless, you may also want to consider some other perks or benefits you could ask for in lieu or a rent reduction.
Some ideas:
- A prime parking space (especially in urban areas.)
- New appliances and/or fixtures in your home or apartment.
- New or larger storage space.
- “First dibs” on better apartments or homes in your complex, once they free up.
- A waiver of fees and charges on things like gym memberships, parking privileges, community rooms, water or trash removal, or other services and amenities.
- Extra parking passes for guests.
- Allowing you sublet for the summer (if you plan to be away).
- One or two months free
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Nobody likes to be ambushed on financial matters. That’s why you might have more success if you call your landlord well ahead of when you need to sign the lease, and politely let them know that you’d like to discuss the terms of the lease and are wondering if they would be open to a price reduction.
You might then suggest having a meeting (in person tends to be best, since it can be harder to say “no” to someone when you’re sitting face-to-face) some time in the next week or two.
This gives your landlord some time to consider the situation–while also giving you some time to build your case.
In addition, giving your landlord some lead time shows you’ve put some thought into the matter–-and it also shows you respect your landlord’s time and schedule.
Keep in mind that you have a right as a renter to negotiate rent, but being diplomatic and respectful to your landlord will likely yield a better result than being aggressive.
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When you do meet with your landlord to negotiate the terms of your lease, it can be helpful to make a good case for keeping you on (or bringing you in) as a tenant.
For example, you might want to have a record of all your on-time payments, your solid credit score, and any history of providing referrals for this landlord.
You may also want to mention your willingness to extend your lease, that you’re courteous to other tenants, keep the property in good shape, and any other points in your favor.
Any and all of these factors could help persuade your landlord to give you a better deal.
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Once you’ve successfully negotiated your rent downward – or otherwise improved the terms of your lease– and have a verbal agreement, it’s a good idea to get the deal in writing.
Having both parties sign off on the new rental agreement provides you with document proof that you have a new deal in place, in the event there is any misunderstanding down the road.
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While rental leases may appear set in stone, they’re more flexible than many tenants think, especially if the rental market is soft in your area (meaning more rentals than renters).
Whether you’re applying to rent a new apartment or signing a new lease on your current rental, you may be able to negotiate a better price if you’re able to show two things: that the rent is higher than similar units in the area, and that you are a model tenant who pays rent on time.
It’s also a good idea to come to the table with some alternatives to a rent reduction (in case your landlord is firm on price), such as a better or free parking space, new appliances, or waiving the membership fee to the on-site gym.
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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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