You have just a handful of chances to dramatically increase your earning power. No, it’s not when annual review time rolls around. Demanding that your boss match a counter-offer won’t work either.
The best chance of increasing your lifetime earning potential is before you even start a job—when you’re at the negotiating table, striking the deal.
When asked to name the greatest invention in human history, Albert Einstein simply replied, “compound interest.” Think about it. If every time you get a new job you negotiate a salary 5 – 10% higher than the original offer, over time you’ll earn significantly more as raises and bonuses are compounded on top of your current salary. Not negotiating your salary could mean you sacrifice half a million dollars of earnings!
As women, we’re often conditioned by our families and our cultures to be cooperative rather than competitive. Of course, cooperation isn’t a bad thing. But in this case too little competitive drive can lead us to accept salary offers that are less than what we’re worth in the marketplace, putting a drag into our overall earning potential from the very beginning of our careers.
When you next sit down to discuss a new job offer, keep the following tips in mind:
- Have realistic expectations – Think ‘realistically high.’ Use research on websites like Salary.com to discover the appropriate range for negotiation, then start on the high-end. You need to drive the salary parameters by setting a high bar.
- Tactfully decline to reveal your current salary – Never show your cards. This is especially true if you know that you’re currently below average in pay. Leave the salary fields on job applications blank and have a polite answer ready when asked: “My current salary is competitive.” If significantly pressed, be honest, but don’t give away this information easily.
- The first person to say a number loses – When asked what salary you expect, say something general, such as: “I’ll require a salary in line with what I am worth in the marketplace.” If you voice a number too early, you risk undercutting your worth. For example, if you say that you won’t take less than $65,000 and the employer was prepared to pay $85,000, they may make you an offer for $70,000. You’ll think you got a great deal, but in reality you could have started at a significantly higher level.
- Be prepared to walk – The best time to look for a new job is when you already have a job. The confidence that you’re professionally secure will give you the position of power during a negotiation. If you’re unemployed, do everything you can to instill yourself with self-assurance. If the new offer doesn’t meet your expectations, be ready to turn it down. There will be an even better offer down the road. Don’t settle!
- Prepare, practice, and prepare some more – Salary negotiation is a learned skill. Read a book like The Smart Woman’s Guide to Interviewing and Salary Negotiation and research career advice websites. Enlist a friend or colleague to help you role play a negotiation scenario.
By intentionally and carefully preparing to negotiate the best possible salary for yourself, you’ll be making an investment that pays compound dividends over the course of your career. Never leave money on the table!