Negotiating for a higher salary and better benefits is crucial to maximizing your earning potential.

Negotiations: the worst part about an otherwise exciting moment—that is, receiving a job offer.

It feels like playing professional mind games, with the nerve-wracking reality that your salary and work satisfaction depend on the outcomes. But done well, negotiating can double, triple, or even quintuple your income.

Unfortunately, there’s probably no way to make the process enjoyable, but you can at least work on making negotiations run more smoothly. Here are 10 tips for negotiating your salary during a job offer.

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  1. Don’t feel guilty about negotiating
  2. Ask for time to consider an offer
  3. Do your research
  4. Beware of the anchoring bias
  5. Show what you’re worth
  6. Don’t lie about your current salary
  7. Use the 10% rule of thumb
  8. Avoid bringing up personal issues
  9. Negotiate on other things besides salary
  10. Frame negotiation in positive, cooperative terms
  11. Conclusion

1. Don’t feel guilty about negotiating.

Fresh graduates and young professionals just entering the workforce may feel uneasy about negotiating for a higher compensation when they have little experience. It can feel awkward and uncomfortable, especially when you feel like you’re coming across as greedy.

However, you should know that negotiation is a natural and even expected part of the hiring process. Recruiters and hiring managers won’t think less of you for negotiating, and they are by all means prepared for the process—it’s part of their jobs!

And, as Jorge Mata from Money Luchador says, “At the very worst, employers will say no, but at least you still have a job. At best, you’ll get what you requested. There’s nothing to lose and everything to gain.”

2. Ask for time to consider an offer.

Unfortunately, the first (or even second) offer presented to you after a company’s application and interview process may not live up to your expectations.

While you may feel pressure to provide an immediate response, know that it’s okay to ask for time to consider it further.

Accepting a new full-time role is no small matter—and hiring managers know this. It’s not at all unreasonable to request a few more days in order to reflect on an offer and determine whether a new job is a good fit.

Just be sure not to disrespect the hiring manager or lead them on. If you know you’d like to mull over the offer more thoroughly, let them know in advance rather than going radio silent.

3. Do your research.

person on laptop

There’s no way to better prepare yourself for negotiation than by doing research on the job market. You can leverage this information to make a more logical argument as to why you deserve the amount you propose.

Here’s how to go about the research process:

  • Look at similar job postings for your role, which tend to list a baseline salary. How do these compare?
  • Or, consult resources like Salary, Payscale, and Glassdoor for an idea of the average salary for your role and industry.
  • Calculate the cost of living for the city in which the job is located. Will rent be higher? Is public transportation an option?
  • Consider your current financial standing, including your debt and current income. What can you afford to accept?

Remember that more effective counteroffers come with well-based reasoning and support—that’s why research is critical to the negotiation process.

4. Beware of the anchoring bias.

Have you heard of the anchoring bias? It’s the human tendency to rely a little too much on the first piece of information we get about something—what we consider the “anchor.”

Applied to salary negotiations, this bias has very real consequences for the final number you receive.

For instance, it’s common for recruiters and hiring managers to ask what your current salary is. This number functions as an anchor in that subsequent figures offered will tend to be quite close to it. If you reveal that you currently earn $54,000 a year, an employer might offer $58,000 even though they have room to pay you $65,000.

With that in mind, you should avoid dropping the first number during salary negotiations—that includes sharing the details of your compensation elsewhere. This anchor often serves as the basis for how a company determines your value, and it acts as a reference point for the final number they offer.

But how do you get out of saying a number?

“If an employer asks you for a number first, say you care about the entire benefits package and ask them what the salary band is for the role,” Dillon from Dollar Revolution advises. “If they ask you what you previously/currently make, say the role isn’t apples to apples so it’s not a fair comparison to compare salaries, and you’d be more comfortable if they told you a range and the factors that determine where you fall.”

Speaking from personal experience, Dillon shares, “I was asked about my current salary and what I wanted over 15 times. But I kept repeating the same line back…and ended up getting over 40% more than my previous job.”

5. Show what you’re worth.

Prospective employers won’t be inclined to go along with your ask if they don’t recognize your worth.

That’s why you need to demonstrate your value as an employee.

According to author and entrepreneur Sandy Yong, you can do this by “showing your accomplishments and quantifying how you helped your previous employer save money or generate more revenue.”

Try one or several of the following tactics to make your case:

  • Compile a detailed list of your major work projects and professional contributions. Include quantified results and outcomes for more punch.
  • Provide samples of your work. Just be sure not to include any private information about your current/former employers and clients.
  • Emphasize your personal initiative and willingness to learn by describing any relevant certifications or professional development you’ve invested in and/or plan on pursuing.
  • Avoid general statements that can’t easily be substantiated, e.g., “I’ll be the best employee you’ve ever had” or “I’ll work harder than anyone else in this role.”

6. Don’t lie about your current salary.

Sometimes there’s just no easy way out of revealing how much you currently make.

If this is the case for you, be honest.

Lying about your current compensation as leverage for a higher salary offer may seem practical, but it’s dangerous territory. Employers can easily find out the truth through your W-2. Some companies even require filling out a job history form before you can even get to the interview stage.

And if you’re caught lying, employers won’t look at you so favorably. In fact, although it’s generally rare for employers to rescind job offers, a fib warrants such a move. Why?

If you’re willing to lie about your salary, there’s no telling what you’d lie about as a potential employee. Besides being unethical, lying reflects poorly on your character.

7. Use the 10% rule of thumb.

Stumped by how much more you should ask for?

Keri Danielski, consumer finance expert and spokesperson for Intuit’s money management tools Turbo and Mint, advises “asking for 10% more than what you are currently making, or what you are offered” as a rule of thumb.

According to Danielski, “This will ensure that you don’t come across as too greedy, but are confident in knowing what your work is worth.”

That said, it’s okay to ask for more than 10%—but be prepared to back up your counteroffer with a clear argument for why you deserve it. That might be an outline of your research of similar roles or even a competing offer you’ve received elsewhere.

8. Avoid bringing up personal issues.

The negotiation process is not the time or place to bring up issues like medical bills, debt, or relationship drama.

Although your personal circumstances may be less than ideal, mentioning them reads negatively as asking for sympathy or pity. It’s also viewed as unprofessional and may influence how hiring managers see you.

Rather than bring up personal issues, focus instead on the value of your professional contributions as a bargaining tool.

9. Negotiate on other things besides salary.

Although we typically think of job negotiations as being salary-specific, the negotiation process encompasses more than your pay alone. In fact, your salary makes up 70% of your total compensation, with the remaining 30% going towards other benefits.

Some of the benefits you can include in the negotiation process include:

  • Paid time off
  • Gym/wellness reimbursement
  • Signing bonus
  • Relocation bonus or incentive
  • The ability to work remotely for a few days a week or month
  • Tuition reimbursement
  • Parental leave and childcare costs
  • Stock options
  • Matching contributions to your retirement plan

Even if you can’t get a signing bonus, negotiating for other perks can still pay off financially. For instance, if your employer agrees to let you work from home twice a week, you can reduce your commuting costs by more than 30% a month!

“In my last corporate job, I negotiated my salary. They offered a number, I countered, and they said no to my offer,” personal finance expert Jon Dulin shares. “I could have given up, but I decided to try again. This time, I asked for them to pay for my last two graduate degree courses ($5,000)—and they agreed… It would have been nice to be earning more money every year, but having those last two classes paid for and not having to deal with a payment plan was great.”

10. Frame negotiation in positive, cooperative terms.

In the story of your life, you’re the protagonist, but you should know that the HR manager or recruiter you’re negotiating with is not the antagonist.

In other words, be nice. An adversarial outlook during negotiation will bring you unnecessary stress and may even reflect on you poorly.

How can you help make the negotiation process as smooth and civil as possible?

  • Be polite and receptive. Choose phrases that deliver your message clearly but not in a hostile manner.
    • “My concern is that…”
    • “I would be more comfortable with…”
  • Offer acknowledgment, particularly when disagreeing with something.
    • “I understand that it’s not possible to…, but I feel…”
  • Express gratitude when appropriate.
    • “Thank you for taking the time to discuss my concerns further.”
    • “I appreciate your patience in…”

Besides easing the actual negotiation process, playing nice also helps to build your rapport with your future employer. If it’s a member of HR you’re in talks with, you can get a positive start with a colleague you may need assistance from in the future.

Conclusion

10 Tips for Negotiating Your Salary

Personal finance guides tend to emphasize spending less and saving more to improve your finances—but don’t forget that earning more is also a big part of the equation. That’s why you should almost never settle for the first dollar amount handed to you with a job offer.

Negotiating for a better paycheck may not be pleasant, but it’s crucial to living up to your maximum earning potential.

Do you have any success stories for salary negotiations? What tips have worked best for you?

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2 Replies to “How to Negotiate Your Salary: 10 Tips”

  • Good tips! Increasing your income is one of my favorite ways to improve your financial situation, and is sometimes overlooked in favor of saving.

    • Financial Impulse says:

      Thank you! I couldn’t agree more. There’s such a big narrative around saving more, but the reality is that earning more is just as important.