How to Avoid Undercutting Yourself in Salary Negotiations
After a lot of work put into research, job applications, and interviewing, you’ve got a job offer! It’s great news and it means the end of the job hunt is close, but you still have work to do before you sign that offer letter.
A job offer is a two-way conversation, and every offer should be negotiated to ensure that the final job offer is one that everyone is happy with and excited about.
So how do you get there?
Today we’ll be arming you with our best negotiation strategies, along with advice to avoid undercutting yourself when you’re asked to give that magic number.
How to find salary info for your position
Doing your research ahead of time will give you the information you need to negotiate the best possible offer and ensure that you are making a good impression to your potential employer.
Do some research on salaries for similar positions in your city and industry on sites like Glassdoor, Payscale, and ZipRecruiter. Even a Google search for “how much does a UX designer get paid in Y city/town/region” can reveal important information that will help you negotiate fair compensation.
When looking for salary information, make sure to consider the local job market. Base salaries vary because the cost of labor is different in different cities, states, and countries. For example, Silicon Valley salaries may be higher than those in Ohio or Georgia, but there are other factors to consider like cost of living and lifestyle. In general, a higher cost of living will translate to higher salaries, but that is not always the case.
Also, in areas where there is a high demand for certain skillsets, candidates may be able to command a larger starting salary than average for the region or add additional perks to the starting salary offer. The reverse is also true: if there is an oversupply of a particular type of labor, that may be reflected in the offered salaries and benefits.
What if you’re asked to give a desired salary?
Salary expectations may come up earlier than you expect in the interview process, even during a phone screen. This can often feel like a confrontation, but try to think of it as a conversation: each party has its priorities, and the negotiation process is about understanding everyone’s needs and trying to meet them.
With that framing in mind, there are several ways you can prepare for any eventual conversations about salary. Go into any job interview scenario – from phone screenings to final interviews – ready to give a salary range backed up by research. Doing your research in advance will ensure you’re prepared to answer these questions realistically and professionally, without either appearing greedy or selling yourself short.
Practice having a conversation about salary in advance. The first conversation you have about compensation will impact your power to negotiate down the road, so it is best to come in with a strong position that you know is supported by industry standards. Ensure your tone is forthright but pleasant and collaborative, not pushy or negative. Practice this with a friend! They can help you refine your wording and answer any questions that may come up.
When giving a desired salary range, aim high.
Providing a range instead of a single number prevents you from locking yourself into one figure and ensures you’ll have room to negotiate. When asked, offer a number on the higher end of your expected range for the role, based on your prior research, but be realistic. Giving a salary range that is far beyond the expectations for the role and your experience will make you look unprepared.
While it is not unusual to be expected to be offered a range for the salary you expect at a position you are interviewing for, you should avoid telling them what you are currently making. It’s not relevant to the position you’ve applied to and it can hurt you in salary negotiations, especially when you are switching to a field that should bring with it a higher salary. This is another scenario where a practiced script can come in handy. Consider this: “I’m not comfortable sharing that information. I prefer to focus on the value I can bring to the company and this role” or “My employer has always considered that information confidential, but the range I am currently seeking is between $X and $Y.”
If the employer first mentions, or counters with, a range that is lower than you expected, it is okay to ask how they arrived at that number. You can say something like “Based on my research, it seems like a range of $X to $Y is standard for the local market. Could you share how your compensation package aligns with that?”
What if you find out that the salary range for the position is far below what you’d hoped for, or what you must earn to cover your expenses? Be willing to walk away from a potential position if you feel that a job’s salary is not adequate given the position, your area, and the industry standards, or if it would leave you living beyond your means. However, do keep in mind that this job doesn’t have to be your last job, or your last salary. Many Bloom Institute of Technology (formerly known as Lambda School) graduates double or even triple their salaries in their second jobs post-graduation.
Negotiating a salary offer
A job offer shouldn’t be considered legitimate until it is in writing.
Do not turn down or deny other opportunities until you go through an interview process and have a formal, written offer you want to accept outlining salary and benefits, even if you’ve been extended a verbal offer.
So how do you ensure that the final job offer is one all parties are happy with? You negotiate! The first thing to know about negotiating a job offer is that you should never accept the first offer! Negotiation is an expected part of the process. Most employers have a range in mind for a role, which means there is likely room to offer you more than the initial amount.
Remember that with an offer in hand, you have leverage: the employer wants you and has attached a number to that desire. Use that to negotiate for the best possible offer you can get. Professional and respectful salary negotiation will not cost you a job offer with any reasonable employer, so you have no reason not to try
When you have an offer in hand, ask for some time to review it — don’t feel pressured to accept or negotiate on the spot. It’s acceptable to ask for at least 24 hours to review a salary offer, sometimes a few days, though there will be circumstances when you will have to decide more quickly. However, having even a business day to review the offer gives you a chance to ensure that it meets your needs and think about how to prepare to negotiate. And make sure you reply when you said you would! You want to reassure the employer that you are interested and responsive.
With your own financial needs and priorities in mind, consider the entire offer. Compensation includes not just the salary but also health benefits, vacation time, training opportunities, equity, and other perks. Also, sometimes when a company can’t move further on the salary they may be able to offer other forms of compensation, like additional vacation days or a training allowance, that will factor into your decision. You can also ask for a salary review after a certain number of months if you can’t get to the salary you were hoping for when you accept the job.
Accepting an offer
If you do accept an offer, stick with it — it’s a faux pas to accept an offer, and then back out if a better one comes along, and it can burn a bridge with a company for good. If you do accept an offer, contact any other companies you’ve been meeting with to withdraw from the hiring process. They will appreciate your letting them know, and it’s much more professional to do so than to ghost.
Finally, get any and all salary offers and changes to those offers in writing. If it’s not in writing, you have no assurance that those promises will be met, either when you begin the job or down the road. Even if you agree on something verbally, ensure a written offer is prepared for you to review and sign off on — and never put down that signature until you have reviewed the written offer carefully to ensure it matches everything that was agreed on verbally.