The Basics of Salary Negotiation

By: Heidi

When it comes to accepting your first job, your first salary can often set the pay you earn for the rest of your life. After attending the Start Smart workshop hosted by the American Association of University Women, I learned a lot about your first salary and strategies about how to negotiate that salary. I wanted to share some of the tips I learned for other students and especially women, who often avoid negotiating a salary all around.

The Gender Pay Gap and Why It Matters
In the year 2016, women working full time in the United States typically were paid just 80 percent of what men were paid, a gap of 20 percent. It’s important to note, this gender pay gap is even worse for women of color. The gender gap tells us that women are overrepresented in low-wage jobs and underrepresented in high-wage ones. Women’s work such as health, education, and public administration, is devalued because women do it. And because women are often caregivers, they face lower pay and promotion opportunities because they are assumed to be distracted and unreliable.

Know Your Value
When it comes to asking for a salary you deserve, it is important to have an understanding of what skills you bring to the table, and how to communicate that. Think back on past accomplishments, contributions, skills, and relevant work experiences. Reflect on what positive results from these accomplishments, what role you played. Consider keeping a journal of all your accomplishments throughout the year, no matter how big or small. Use the template below to help articulate your value:

As a result of my effort to do ____________________________ (identify your action) I have achieved _______________________________ (result), which provided the following specific benefits to the company: ____________________ (fill in quantitative result or other positive outcome).

Image: US $1 bill on white background. 
Text: The basics of salary negotiation.

Know Your Strategy And Benefits
It is important to have objective research when it comes to preparing for your negotiation. Follow these six steps when it comes to benchmarking your salary and benefits: Research and identify a comparable job title, find the salary range and establish your target salary, identify your target salary range, create a realistic budget, determine your resistance or “walk-away” point, and determine the value of your benefits.

When it comes to matching a job to a salary, start with Salary.com and identify a job description that matches the job you are researching. Identify a target salary range looking at the 25th to 75th percentile, at, below, or above the median. Use the target salary as the bottom of the range and do not stretch more than 20 percent. You can calculate the take-home pay for the target salary at PaycheckCity.com

As for determining a resistance point, this is the lowest salary you are willing to accept and still reach an agreement. This is a useful tool to prevent you from accepting a salary you might later regret. Offers below your resistance point may signal you to walk away from a job offer.

Creating a budget is also essential in preparing for your negotiation strategy. Your budget doesn’t need to be scary, and is something that can be broken down quite simply. The 50/20/30 rule can help you proportionately break down and create a healthy budget. It is meant to be flexible based on your particular situation and needs. Breaking it down looks like this: 50 percent or less will be made up of essential expenses such as housing, food, transportation, and utilities. 20 percent or more will go towards your financial goals and obligations such as savings and debt. The ending 30 percent is meant to be for flexible spending and personal choices such as shopping, personal care, hobbies, and entertainment.

Know Your Strategy
Negotiating your salary will differ depending on whether you are looking for a new job or preparing to ask for a raise or promotion. When it comes to a new job, deflection strategies are key to avoid discussing or negotiating your salary until AFTER you have received a job offer. Here are a few different ideas you can use in an interview can look like:

  • “I’d rather talk about that after I’ve received a job offer.”
  • “I’d like to learn more about the role before I set my salary expectations. As we move forward in the interview process, I would hope and expect that my salary would line up with market rates for similar positions in this area.”
  • “What is the salary range for this position or similar positions with this workload in the organization?”

If you receive an offer below your resistance point, then you should attempt to negotiate upwards. Having your notes to reference, you can counteroffer in several ways:

  • “Do you think you have any flexibility on the salary number?”
  • “Thank you for the offer. Based on my research with comparable roles in this area, I was thinking of something in the range of (your target salary range.)”
  • “Based on my prior experience and familiarity with this role, I believe that an additional $_____ would be fair.”

Practice, Practice Practice
Your negotiation skills will not improve without practice. With each time you practice, you can not only improve your ability to be objective, persuasive, and strategic, but confident in your capabilities of negotiating your worth!

Using your notes from your research, sit down with a roommate or a friend and go through a role-play scenario. The more you practice, the more feedback they can provide you with to improve your verbal and body language.

Though this is a lot of information, it’s important to be informed when negotiating your first salary as it sets the benchmark for the rest of your career when it comes to raises and bonuses. Take this information and use it to set yourself up for success so you don’t end up leaving any extra money on the table.

*Tips taken from the AAUW Start Smart Workbook

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How To: Negotiate Your Salary

By: Cody

If you are like me, you might assume that most entry level positions have a set pay for the job and that’s what you will receive. This is probably true for most companies, however through my job search I have found more and more companies that don’t have a set pay. Instead, they are open for discussion to decide on a fair pay. This is especially true in the business field as I have noticed more and more entry level positions in the field are turning from hourly to salaried pay. With this change comes the increased need to know how to negotiate a salary, something very few college students know how to do.

Money

The first thing to do with salary negotiations is PREPARE! There is nothing worse than answering, “What salary would be acceptable to you?” with “Umm”. This is why it is important to be prepared when negotiating a salary. You must have a salary goal in mind but it is also a good idea to find the market value for the position and area you are applying too. One of the easiest ways to do this is by doing some research online at a website like Salary.com. Or if you want specific salary information regarding UMD students visit our Graduate Follow-Up Report. This will give you a basic understanding of what the current pay scale is like for people in this position. It will also help you to not over or under estimate your salary, which will make you look unprepared. When answering salary questions it is important to state what you feel would be an acceptable salary, but you must also remain flexible. Without flexibility an employer may move on to another candidate who is more open to working with the employer to find a reasonable salary for both parties. Finally, it is also good to prepare a list of reasons of why you deserve the salary you are asking for. These reasons can be based on a combination of the research you have done and your skills and qualities that you can bring to the position.

The next thing to do with salary negotiations in PRACTICE! Practice with a friend, family member or even a Career Counselor. This will help you work out the best ways of asking for your salary and defending the price you have named. It will also help you get rid of those dreaded “umms” and “ahhs”. This will make you sound much more confident in what you are saying.

Next comes Execution and Evaluation. Execution is when you are actually negotiating your salary with the employer. Remember your research, be confident in your skills and abilities, and be flexible. Then comes evaluation, this is when you evaluate how well your negotiation went. This is a crucial part because it shows you the areas that worked and more importantly shows you the areas that you need to improve on. Knowing what you need to improve on can help you work on those skills so that the next time you need to negotiate your salary you can hopefully get the salary you want.

Salary negotiation is an important skill that not many students are taught. This is meant to be a very basic outline of how to negotiate a salary and if you want more help stop by Career Services and we would be more than willing to help you!

Remember: Prepare, Practice, Execute and Evaluate!

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