How to negotiate your salary

“Successful negotiation is not about getting to ‘yes’; it’s about mastering ‘no’ and understanding what the path to an agreement is.”

— Chris Voss - FBI Hostage Negotiator

How would you like it if you could have the courage to negotiate for what you want? Can you imagine what you current job would've been like if you had just negotiated for an extra 5% during the job offer stage? Can you imagine negotiating an extra 10%? What would it be like if you could summon up the courage to negotiate your salary or bonus (or both) every year... providing that you deliver the results to justify such a move?

As introverts, one of our biggest weakness is articulating what we want, our true desires. Since we struggle to articulate what we want, one can only imagine how much harder it is then to argue for what we want... for what we're worth. We worry about how we might be perceived, we might be seen as a money hungry individual who is out of touch with our actual abilities, or we create catastrophes in our minds. What if the potential employer gets offended and hangs up the phone or worse, tear up the offer letter and go with their second choice.

I'm willing to bet that for most of us introverts (generalising a little of course) we hardly ever negotiate for anything and most of us have probably never negotiated our salary whether it be at job offer stage or on an annual basis. For the majority of my career, I have just accepted the first number that the employer gives me. I'm happy just to have a job offer (somebody out there likes me... yay!!), why would I risk it all but asking for a little bit more? 

Only more recently have I started to ask for more. Guess what? Not once have I had received a negative response. Not once have I lost a job offer. The worse thing that the employer can say is "no". That's it. Then it's up to us to take it or leave it. 

I recently listened to the the Jordan Harbinger podcast featuring Alex Kouts who teaches professionals how to negotiate (you can download Part 1 below). As I listened to the three part series, I realised that I had inadvertently stumbled upon the recommended mindset and the simple framework to be adopted when negotiating your salary. Most of us think negotiation is scary and most of us think we are terrible at it. So we do our best to avoid it and then justify to ourselves after the fact that the pain we've avoided was well worth the extra dollars we could've had. However, you'd be amazed at just how simple the framework is to help you become a better negotiator. You might not become Chris Voss, the famous FBI hostage negotiator. But you don't need to be... you're asking for percentage points more, not trying to save hostages.

By learning and then practicing the simple mindset and framework below, you will have the courage to negotiate for what you want. And as you get more comfortable, you will get better. The next time you need to negotiate your salary, you can comfortably ask for more rather than stay silent and regret it later.

MINDSET

Before you think about negotiating for anything (salary, price of a new car, house, etc.) there is a very important realisation you need to embed into your mindset. It’s something I’ve really not thought about until I actually got into it. In most cases, the other party you are negotiating with is just as hesitant to get into it as you are. Have you ever thought about that? All the fears and doubts you have about being seen like a selfish jerk who only cares about screwing down the other party, well, the person you are negotiating with has exactly the same fears and doubts.

Now obviously, if you are negotiating a billion dollar merger then the other party is likely to be far more experienced and doesn’t have those concerns. However, for most of us introverts, you’ll have a pretty low chance of running into one of those skilled negotiators when you are negotiating your salary, or buying a car, or even at the electronics store buying a new TV.

The fact of the matter is, for most of us, we only focus on our own fears and buy into the false projection in our minds that the other party is highly skilled and experienced. The reality is, they are just as fearful as we are. They want to avoid negotiating as much as we do, even if they don’t show it on their face. So let’s use this to our advantage and embed in our minds the realisation that the other party wants to end the negotiation as quickly as possible. In fact, it is the person who holds this realisation that has the power. We can drag the negotiation out for as long as possible or use the hint of a quick win to push for what we want.

ESTABLISH YOUR OUTCOME

Like we’ve mentioned in our previous blog posts, before doing anything, start with establishing a clear view in your head of what the outcome is that you want. Establish in your mind what the most ideal outcome is, and anything above that is a nice bonus. Or alternatively and depending on the situation, establish what is the minimum you are willing to accept, below which you will walk away.

When negotiating for your salary with a new job offer, establishing your walk away point is absolutely vital. There is nothing worse than an employee who has grudgingly accepted a salary lower than his/her expectations because that employee won’t stay very long or will become toxic and eventually get pushed out. Therefore, while you need to establish the upper price point you should push for, you also need a bottom threshold below which you will walk away. Unless there are significant non-financial benefits to the new job, do not accept an offer that is lower than what you think you are worth. Regardless of whether you are off the mark and overvalue yourself, or the employer is off the mark and undervalues you, starting a new job under such a misalignment of expectations is never a good thing.

Now, you might think that your future employer has all the power and could easily tear up your offer. However, you should remind yourself of the amount of money and time they have spent in going through the recruitment process. The volume of CVs they’ve had to review, the hours of interviews they’ve had to conduct, and the thousands of dollars they’ve had to pay to list their job so that they get the best candidate. When you get to the job offer stage, the last thing an employer wants is to go through the recruitment process again. Again, like the mindset, use this to your advantage and push for what you want… politely of course.

COMPETITION AND VALUE

Economists are famous for their model of elastic supply and demand. The higher the demand, and the scarcer the supply, the higher the value of the commodity in question. For those of us who are potential employees, it is exactly the same. Now, don’t make up lies about how many job offers you have on the table already if they are not there.

But before you agree to a salary, take some time to consider it. My favourite note from the podcast with Alex Kouts was the short and concise response below:

Thank you very much for your offer. I am really keen to join the organisation. I will consider your offer in light of other opportunities that I am considering. It would be useful if you could tell me whether there is any flexibility in the offer and when I should respond by.

That’s it, that’s all you have to do. It sets up the scene that you are looking to negotiate but at the same time, you are considering other opportunities. It raises your perceived demand, making you appear scarcer. You might again be fearful of writing the above statement, but think about it, what’s the worse that can happen? At this stage, the worse that can happen is you get an answer of “no”. Well in that case, you know their position and then it is up to you on whether the offer on the table is close enough to your desired limit or whether you should walk away.

GET TO ‘NO’ AND HELP THEM SEE THE END IS CLOSE

This is where it all comes together. The famous FBI hostage negotiator Chris Voss often makes an important point. We’ve always been taught that we should ask questions to get the other party to say ‘yes’ because it sets up the tone in the other party’s mind to acquiesce to our demands. But in negotiations, all this does is waste time as you tip toe around. Instead, be clear on what you are looking for. Each time you get to a ‘no’, you establish the parameters and can start focusing on what is do-able.

The final action to help improve your negotiation success is to help the other party see that the end is clear. Again, quoting Alex Kouts in the podcast, be clear on how close you are to finalising the deal:

Thank you very much for your offer and I’m really looking forward to joining. I think we are really close. If we could agree on x dollars then I’m willing to sign the offer and hand in my notice this afternoon.

Photo by bruce mars from Pexels