Author Topic: Salary negotiation - Finally getting a hang of it  (Read 3032 times)

Gone_Hiking

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Salary negotiation - Finally getting a hang of it
« on: March 03, 2018, 08:57:45 PM »
I wasn't actually looking for a job.  I had one (background described on the thread https://forum.mrmoneymustache.com/share-your-badassity/the-badass-way-of-handling-a-layoff/), but working below qualifications was testing my patience.   So when a friend told me her boss was looking for some help in the area closer aligned with my set of skills and asked whether I was interested, I didn't hesitate and shared my CV.

Long story short, I found myself with a job offer last week.   The salary was within market range and a nice 30% bump from the current job, but, after successfully negotiating a lowballed offer last year, I thought that it couldn't hurt to ask for more.  So I called the boss and countered 6% higher.  Over-the-phone handshake was reached at 5% above the initial offer.

A short conversation translated into a couple of hundred dollars more to squirrel away every month!

Miss Piggy

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Re: Salary negotiation - Finally getting a hang of it
« Reply #1 on: March 04, 2018, 11:00:56 AM »
Good job! Not a bad outcome at all for just a few minutes of work!

hgjjgkj

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Re: Salary negotiation - Finally getting a hang of it
« Reply #2 on: March 05, 2018, 10:14:35 AM »
Any specifics on your approach>

Valvore

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Re: Salary negotiation - Finally getting a hang of it
« Reply #3 on: March 05, 2018, 11:20:47 AM »
Wow! That's great! 35% is a huge bump. Congrats

Gone_Hiking

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Re: Salary negotiation - Finally getting a hang of it
« Reply #4 on: March 05, 2018, 07:57:52 PM »
Any specifics on your approach>

This was the second time when I successfully asked for higher starting salary.  Both times, I talked directly to the hiring manager.  Talking to HR had never gotten me anywhere in the past.  I also knew the going market rate for the position. 

Conventional wisdom says one should never ask for more than 10% more than offered.  This may be true except in two cases:  when the offer is lowballed or when the offer comes  above the market rate.  Both indicate that the HR doesn't do comparative analysis when preparing offers and both make me wonder what else HR does not do.  One those happened to me a year ago and my counter offer was different then than now.  When I negotiated a year ago, the company's initial offer was 30% below the market.  I countered with the market rate.  The second offer was 23% above the initial offer and still 10% below market rate.   This time, the offer was a going market rate for somebody with 5 years of experience.  I decided to ask for 6% more to account for my additional experience, but not for 10% because I believed the salary offered was already fair.

And then, there is a way to ask, and here is my approach.  First, I explain that I am very happy to receive an offer and I will happily join the company.  Then I inquire whether compensation aspect of my position would be something we could discuss.  If the answer is yes, then I bring in the market data, set of skills, etc, and then I throw in the number.  And then I shut up.  The manager responds that they will see what they can do and, after a couple of hours, or a day, the manager returns the call and names the second offer.  In my case, the second offer was 5% more than the initial, and that has me pretty happy.  I have a way to ask for raises, too (grin).

I hope this is helpful - I would love to hear who else has been successful in getting a higher pay and what techniques were used.

hgjjgkj

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Re: Salary negotiation - Finally getting a hang of it
« Reply #5 on: March 06, 2018, 08:10:49 AM »
Thanks for the thoughtful write up this is very interesting and beneficial! I hope to use this some day

Warlord1986

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Re: Salary negotiation - Finally getting a hang of it
« Reply #6 on: March 06, 2018, 08:28:46 AM »
That is so awesome and I am so glad I got to read it. :)

I negotiated a higher salary negotiation when I started this job too. It was a good feeling, but I don't think I was as neat about it/as confident as you were. I might steal your script for next time.

acroy

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Re: Salary negotiation - Finally getting a hang of it
« Reply #7 on: March 06, 2018, 08:31:16 AM »
Badass, nice!!

Finances_With_Purpose

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Re: Salary negotiation - Finally getting a hang of it
« Reply #8 on: March 07, 2018, 12:29:07 AM »
Nicely done!

expatartist

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Re: Salary negotiation - Finally getting a hang of it
« Reply #9 on: March 07, 2018, 12:31:30 AM »
Excellent job and writeup of your negotiating strategy, congratulations!

Linea_Norway

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Re: Salary negotiation - Finally getting a hang of it
« Reply #10 on: March 07, 2018, 12:53:20 AM »
Congrats.
It is smart of you to know the market value of the job and not bargain for a salary above market value. In that case they could have just replaced you with someone else who wanted to work for the market value.

My DH once had an applicant who wanted a significant higher salary than market value. This meant that the company has to increase this guy's external hourly rates, which would make them less competitive in the market. This guy didn't get the job.

Xlar

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Re: Salary negotiation - Finally getting a hang of it
« Reply #11 on: March 07, 2018, 10:41:51 AM »
Can you give some tips on how you calculate the market value? This is always an aspect that I struggle with.

Dicey

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Re: Salary negotiation - Finally getting a hang of it
« Reply #12 on: March 08, 2018, 02:01:16 PM »
Excellent! Now please tell us your mustachian plan for all those new green recruits you'll be training.

Gone_Hiking

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Re: Salary negotiation - Finally getting a hang of it
« Reply #13 on: March 08, 2018, 07:48:14 PM »
Can you give some tips on how you calculate the market value? This is always an aspect that I struggle with.

I was fortunate to have salary scales from the pharmaceutical company that are used in my local market.  That was the entry point.  I also used salary.com to look for specific positions.  Glassdoor has a Know Your Worth tool, too, but I find that it does better in larger job markets such as Phoenix or Chicago, but it doesn't do a good job for smaller markets.  Glassdoor, however, reports self-reported salary ranges for different positions within a given company and that information is helpful after outliers are removed.  Aggregating this information might take a bit of work, however the results give a good picture of salary potential.   Best of luck, salary negotiators!

Linea_Norway

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Re: Salary negotiation - Finally getting a hang of it
« Reply #14 on: March 09, 2018, 12:38:45 AM »
My DH has 2 people working for him. One of them is very good (manages his projects well, has happy customers and requires little support from DH). This guy was some years ago hired for a low income. He mentioned to DH that he thought his pay was low, compared to the union branch lists. DH agreed that this guy should have a higher income and gave him a raise outside the normal salary raises. It is important to keep your good people and keep them happy.

So if you really think you are underpaid, it can help to mention it to your boss. "No" is the worst word you can get. And in best case they worry that you might leave them.

Toad

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Re: Salary negotiation - Finally getting a hang of it
« Reply #15 on: March 13, 2018, 01:28:05 AM »
I feel like I am pretty good at this.  The key is to do a bunch of research upfront to know exactly what the market range of a typical person with your qualifications and skills is.  As was mentioned already, glassdoor.com is your friend here.  There were a couple other places I looked...don't remember right now, but just google your job title with salary after it and you will come up with a few places.

Then if you have some skills or differentiating factors for yourself above and beyond what other people with similar qualifications have, aim slightly above the high end of the salary range.  If you can't think of anything that differentiates yourself, that is ok too, aim for the middle to upper end of the salary range.

The final and most important bit is to believe that you are worth what you are asking for.  This is always the hardest part for me.  I still have a hard time believing I am actually worth what they pay me, but I know that they bill me out at a hourly rate of approx. 4.5x what my salary would be on an hourly basis (which I REALLY can't justify), so it makes it a bit easier for me to justify what they pay me.

Some people think it is best to not be the first to say a salary range in negotiations, but if you have done your research I would argue it most certainly is best to say a range first since it acts as an anchor point for any counter offers. But, always say a range not a specific number... something like "I believe someone with my qualifications and skills would be in the range of xxx,xxx to x,xxx,xxx" (see what i did there :P).

Ideally the low end of your range will be your target salary or slightly above your target salary that way if they go anywhere in your range you will be happy.  The overall goal though is to set your range ever so slightly above what they would want to pay you, but not to the point of being unrealistic.


When I started, my offered salary (they went first--first job I didn't know what I was doing) was slightly above the average for an entry level person.  I asked for 5% justifying it with superior qualifications --> I received 3% above the initial offer which put me in the mid-high range.  I received yearly bumps of around 5% the next three years for good performance which kept me at the high end of the salary range.

At the start of my fourth year (about 2 months after I had just received a 5% bump) I knew I was going to be switching companies so I decided to sack up and ask for a substantial raise before jumping ship so I could negotiate from a higher base salary.  I justified it by citing that my responsibilities had begun to exceed my compensation (which was a valid point but a bit exaggerated) and that I had just received a professional license (also valid but typically only results in about a 5% bump most places).  I had prepared a lot of materials to back up the highest bump that I could justify which would have been a 20% bump from where I was at.

As it turned out though my bosses boss (who I had a pretty good relationship with) went to bat for me with upper management and apologetically informed me that he was only able to get me a 13% bump.  This was without me doing anything other than asking for a raise.  I didn't try to counter that one since it was right on target with where I was trying to end up at.

When I was interviewing at new companies none of the companies directly balked at the range I suggested I was worth.  The low point of the range I gave was 11% above the high end of the range for someone with my experience on glassdoor.com and the high end of the range I gave was where people in my profession typically plateau at.  I effectively priced myself at someone with 3x the experience I have but was able to justify it with my current at the time salary.  The company I ended up at came back slightly below my specified range which I happily accepted since it was just slightly below where I hoped to end up at but was well within what I was prepared to accept to switch over to them.

Since I am still sitting off the scale as far as salary for someone with my experience, in my review this year instead of asking for a raise I asked to receive my end of year guaranteed bonus at the beginning of the year from now on instead of the end.  They agreed to that.  Next year I will try for a 3% raise by asking for a 5% raise which they should be more willing to oblige since I didn't ask for one this year.

In all I have increased my salary approx. 40% over 5 years for always asking for slightly more than I think I deserve, and asking for a raise after achieving professional milestones...the smartest thing I did was asking for a substantial raise and then changing companies shortly after to get another bump...that move alone bumped my salary 20% from the previous year and has my current salary sitting off the scale.  The unfortunate side effect of this is I am only about 15% away from the high end of the typical plateau for my position that most people take about 20 years to get to...so any increases from here on out will likely be small and very gradual.

Bicycle_B

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Re: Salary negotiation - Finally getting a hang of it
« Reply #16 on: March 13, 2018, 03:26:58 PM »
@Gone_Hiking and @Toad, great stories!  Love the practical detail, very helpful.