Equal pay advocate Katie Donovan knows pay negotiations can be tough. Don’t panic! A conflict-free approach and plenty of research can lead to success.

People often talk about negotiation as if it were conflict resolution. Unfortunately, in many situations, negotiations can turn into a bit of a conflict. Negotiations at home can break down fast, whether negotiating with your partner or a roommate. Who’s making dinner tonight? Whose clothes are still in the dryer? Who’s turn to load the dishwasher? Ugh! Sorry I brought it up!

The thing is, pay negotiation is a step in the process of determining pay, so it shouldn’t become conflict resolution. Salaries and wages have options and offers to explore; when it comes to pay, there’s a method to the madness of negotiating a fair outcome for all parties.

Salary Negotiation Tip: Understand the Offer

A client recently told me of an undignified offer a company made her. She made it sound like a dissension, but she was simply uninformed of the process. She had been a consultant for this potential employer and they wanted her to come on full time. Based on her hourly rate for consulting, I was able to estimate within $500 of the salary they actually offered her. She was no longer insulted once she understood how that first offer was determined (the company simply discounted the consulting rate by 20 percent). Instead, she was ready to learn the typical pay determination process to increase her offer.

That first offer assumes there will be negotiations, so it is never the best offer. Typically, the first offer is approximately 10 percent more than your current pay.

The three elements that determine the pay rate for a job are:

  1. The current job market
  2. The employer’s ability and philosophy of pay
  3. The candidate/employee’s education, experience, accomplishments, and previous pay.

Salary Negotiation Tip: Maintain Your Poker Face

Start by excitedly acknowledging the offer, while also showing concern that the offer seems low. Even if they offer double what you expected. To maximize your gains in pay and benefits, focus on the job market and the employer (instead of focusing on your reasoning only, such as the amount of experience you have or your cost of living). They will be more receptive to discussing their pecuniary strength and their philosophy towards employees’ salaries, not your personal financial needs.

Stack the deck in your favor. Research the job market. What is the going rate for your job in your industry and location? Check out salary sites like Salary.com and Glassdoor.com. Your job might be the hot job of the moment and the market pay has jumped 10 percent. Research the employer’s financials. Use annual reports of publicly traded companies and nonprofits. Nonprofits file 1099 forms annually. Is the revenue on an upward trajectory? Is the net profit increasing? Are costs decreasing?

Then, check out the company’s own marketing material. Check out press releases and the employer’s website. The business may have just closed two big clients and does not know how it’s going to keep up with the new demand. These are all situations that can support the offer or pay raise you’re negotiating.

Salary Negotiation Tip: During Negotiation, No is Your Friend

In a perfect world, you don’t want to hear yes after your first offer; that means you didn’t ask for enough. No is typically the first response during negotiations and is often accompanied with a less-than-truthful reason.

Common reasons include:

  • That’s the highest anyone is paid
  • We can’t afford more
  • You need more experience.

Be excited that you got a No and use the research you did to continue the conversation. One such response would be, “I’m surprised you can’t afford more since profits had double-digit growth the past few years.” You’re not sassing them (well, not intentionally anyway); you’re impressing them with your knowledge and proving that you deserve what you’re asking for.

Salary Negotiation Tip: Redefine a Successful Negotiation

A truly successful salary negotiation will start with No and end at a place that is:

  • Greater than the median market value of the job,
  • Within the company’s budget for the job, and
  • Acknowledges your experience and accomplishments.

Yes, even the smallest of employers and nonprofits have budgets for jobs. Your goal in the negotiation is to get as close to the top without going over. Success can be getting better pay, but it can also be learning that your employer cannot, or will not, pay above the median rate. It’s better to know and determine your next career move than to wait around hoping for something that will never occur.

The general outline of the process consists of:

  1. Employer makes initial offer based on your current pay and below the budget
  2. You show excitement for job, but disappointment in pay and benefits you’re offered or are currently earning
  3. Employer states initial reluctance to budge
  4. You respond to employer’s reluctance based on research
  5. Employer increases pay and/or benefits
  6. You thank employer for working with you to find an agreement, but show some reluctance
  7. Employer may/may not increase offer again
  8. You accept or decline offer
  9. You accept whatever is offered while deciding whether to start looking for a new job.

Thinking of pay and benefits negotiation as a key process not only helps your wallet, but also helps your career management. Negotiation time is when you discover whether you’re in or out. The employer may play their cards close to their chest, but if you’ve done your research, you already know what they’re holding. If they’re not willing to show their hand, well then… it’s time to go find a new game.

Katie Donovan is a salary and career negotiation consultant, equal pay advocate, and keynote speaker. Her company Equal Pay Negotiations LLC teaches women pay, benefits, and career negotiation through online courses, mobile apps, workshops, and personal consulting.

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