I found this interesting article from The Wall Street Journal about how to get a higher salary when you take a new job. I think the article is very good. To many employees are scared when accepting a new job salary to negotiate. But doing so is vital to your future income. As long as you counter with a reasonable amount of new job salary pay, you will not run the risk of jeopardizing your chances of employment. If you are unsure how to negotiate effectively, here are some tips to make the negotiations go smoothly.
My Experience Negotiating a New Job Salary
Personally, I found myself making many “mistakes” that the author mentions. When I would go in for an interview, I would always give out how much I was expecting in salary first. By telling the interviewer my number first, I could be allowing the employer to offer me a lower job salary than they were otherwise offering or out-price myself from the position. For example, maybe I told the interviewer I was looking to earn $40,000/year. They were going to offer the position at $47,000/year. Now that they know I am only looking for $40,000, they may only offer me $42,000/year. I just cost myself $5,000/year!! With the effect time has on money, that $5,000 will grow into a huge amount in future.
The other mistake I made was I always accepted the first job salary offer I would receive. I always thought that this was the best they can do, so there is no need to counteroffer. I learned this was not the case after talking with my parents about a new position. I really wanted the position, but the salary was just under what I would accept. My father told me to make a counteroffer, stating why I should receive a higher salary. I did, and after a few days I received a response from the company. They accepted my counteroffer! I was so excited! Now, when I go in for an interview, I always counteroffer, even if it just for a little bit more. Anything more you can get now, makes you that much more better off in the future.
Negotiating and Not: The Impact of Higher Job Salary
Think about it this way: Say you are offered and accept a position for $40,000/year. If the following year, you get a 4% raise, your job salary is $41,600. If on the other hand, you had counter-offered and got hired with a job salary of $42,500/year and got a 4% raise the following year, your updated job salary is $44,200.
Starting Job Salary:
No Negotiation: $40,000
Updated Job Salary After 4% Raise:
No Negotiation: $41,600 (raise in dollar terms: $1,600)
Negotiation: $44,200 (raise in dollar terms: $1,700)
This shows that by counter-offering, you have effectively “earned” an extra $2,600 ($2,500 from the counteroffer itself, and another $100 from the difference in raises). Not only do you get more money now, but all of your future raises include that extra money from the beginning as well. Put another way, your future raises are larger because your starting base was bigger and all of this money will compound upon itself.
Always counteroffer a new job salary. The worst they can do is say no. And if they do, ask them if you can get a review of your performance with a possible salary increase after six months. This way, you can show them how valuable you are to the company and get a higher salary after six months, then another raise in six more months.
Just because today’s economy is not great, you still need to fight for your job salary. No company will balk at you if you ask for $1,000 – $2,000 more per year if you have all the qualifications they are looking for. And if they do balk over that small amount, then that is a company that probably will not treat you well job salary-wise in the future either.