10 Things to Know Before You Talk Salary

You have rewritten and proofed your resume and cover letter a million times. You run interview questions and answers throughout the day. You are ready to go get your new job. Or are you? Have you thought about the salary and how you will negotiate it? Here are ten things to know before you talk salary. These work for starting salaries and raises.

1. You are underpaid if you accepted the first salary offered to you. Hiring managers expect negotiations so they keep some money aside specifically for that purpose. This money already has been budgeted. Will you be able to get it or will your manager have the opportunity to use it elsewhere? Next time try before you accept the job offer.

2. It is almost impossible for a woman to ask for too much. Research shows that women continually underestimate their value. It’s also shown that men typically ask for 30% more money than women in salary negotiations. Even when you think you are pricing yourself out by asking for too much, chances are very high that you have not.

3. The market value of the job for men is different than the salary ranges shown on career web sites. The salary ranges consider salaries earned by men and women. Acknowledging the fact that women are earning 77% of what men earn means we want to aim for what the men earn in a given job – not the amount that men and women are earning on average. This means a little math. Divide the target salary by 0.885 and you will get the salary men earn assuming a 50/50 split of men and women in the industry.

4. The financial strength of the company is important to women when we negotiate. We ladies are an empathetic bunch and we wouldn’t want to ask for something that would be hard for our managers to do. Really we think that way even when we know the job should pay more. To help you feel more than comfortable do some extra research before you talk salary with your current manager or hiring manager. Public companies report their finances with the SEC. Private companies have many hints at their success through the press releases, company meetings, and sales growth. Sales representatives can give great insight on this topic.

5. The company’s future strategies are more important than today’s tactics. Sure you are doing a specific job today but you need to understand how the company will change. Oh, did I forget to tell you that your company would change? If it doesn’t it will most likely die so be ready for change. Ask about the future of the company. Do you have skill sets and experiences that will continue to be an asset with future strategies? Do you have skill sets and experiences that have not been used yet at this company but will be critical with new strategies? Can you learn new skills that will make you more valuable with the company’s future? Make sure management understands how you are ready to grow with the company and welcome the changes.

6. The network you bring to the company can be invaluable. Harvard people are worth so much more than we mere mortals not because of their brains. It’s their connections that truly are above and beyond the norm. You have a network of friends, family, classmates, colleagues, and others who may become clients, employees, partners, vendors, advisors, or investors of your company. Let your company be aware of how you are developing your network and using it with the company’s needs in mind. When possible use specific examples of people you have brought into your company’s world.

7. Awards and accolades your have earned are objective and subjective proof of your abilities. Current and former employers, industry organizations, and educational institutes often give various accolades. Make sure your superiors are aware of all that you have earned. Don’t be shocked if you have to remind your manager of an award granted from him/her. Don’t be shocked if you forget what you earned. Keep a “Atta Girl” file with emails and notes from superiors, clients, and others that praise you for work well done. Even save digital copies of voice mail that praise you. Of course, don’t forget any actual awards. Now the most important part, share this information freely with management.

8. Your contribution to increase revenues is important. If you are not in sales this one may seem hard but the more you can put a dollar figure to your contribution the better you will be able to negotiate. Did you help sales representatives pull information for a new client? Did you come up with a product idea? Did you come up with a new market to target? Do you think of a new advertising channel? Did your introduce a new client to your company? Once you can pinpoint a direct impact on revenue than put a dollar figure on it. It’s amazing how easy it becomes to ask for $10,000 more in salary when you can demonstrate that you impacted $50,000 coming into a company.

9. Your contribution to decrease costs is important. Chances are high that if you do not impact revenue than you probably impact costs. Did you negotiate a better contract with a vendor? Did you develop a shorter production method? Did you improve customer service best practices so that fewer customers need additional assistance? If it saved time, it saved money. If it lowered the number of times people needed to interact, it saved money. If it lowered the amount of inventory needed, it saved money. Again putting a dollar figure on this and sharing with managment is the ultimate goal.

10. Your options if you cannot negotiate the salary you want. Too often we feel like we need to take what is given us especially during bad economic times. Understand how well you can survive and thrive elsewhere prior to having a salary discussion with your current manager or a hiring manager. It’s amazing how this knowledge gives you confidence. If you talk to your current manager, the worse that could happen is that you are still employed with the same salary. You may decide that you will begin to look for a new job if you cannot negotiate a better salary but that doesn’t mean you need to say “I’m quitting.” If you are talking to a hiring manager and are currently employed, again you can stay with your current job at the current salary and continue your job search until the right job at the right salary happens. If you are unemployed and talking with a hiring manager the best alternative is harder to come by. Sometimes, knowing that you are taking a job for the short term to keep a roof over your head is the needed step. Just knowing this can give you the freedom to then continue job searching even after accepting a job offer.

Good luck with your next salary negotiation. You should find it easier if you consider the 10 items above.

Culture Catching Up to Women in Business

Last Saturday I had the pleasure to speak at a Women in Business Conference at my alma mater, Holy Cross.  The keynote speaker, Nancy Taylor, President and CEO of Tredegar quoted Peter Drucker and said “Culture eats strategy for breakfast.”  That quote held on to me during her speech, during my session later in the day, and ever since.   I’m almost embarrassed to say, I had not heard that one before.  It’s so elegant with its simplicity and it’s from such a well known management guru.   It seems like I went out of my way not to hear it before.  But now that I have,  I see how it hits at many of the challenges we women face in business as a whole and in negotiating in particular.

This elegantly simple quote reflects the reality of women in business today.  For more than five thousand years (since the first marriage) women had developed a culture that served us well in our subservient roles as daughters, wives, and mothers who had little if any legal rights or voice. The work we did was in support of our fathers’ and husbands’ work.  We learned to farm if we were farmer’s daughters.  We learned the trade of our husbands’ to act as their apprentices.  We were the women behind the men.  We knew how to get things done to benefit our men’s images.  We knew how to manage the home so well that men thought there was little or nothing to managing a household and children.  The trials and tribulations of our days were to be stifled while the credit of our successes were to be shared with the males of our family.  This culture of support served us well but things started to change not too long ago.

About 300 years ago love-based marriages became acceptable and women had a say in whom they married.  This was the first time women had a voice in such an important aspect of their own life. Until then parents decided for economic and political reasons who daughters would marry – if they would marry at all.  In 1920 in the US another big change occurred.  Women got the right to vote.  This is a breakthrough moment.  Women actually got a voice in the world around them.  That is less than 100 years ago.  Move forward to 1963 and John F. Kennedy signs into law the Equal Pay Act.  That is less than 50 years ago that the government acknowledges and promotes the value of women in business.

Thousands of years had been spent creating and reinforcing the culture of women as supporting roles in the lives of men and society.  This culture does not suddenly disappear within three hundred years as women legally win rights to be the leading characters in their own lives and co-stars in society as a whole.   These changes are the antithesis of what had come before.  They were well overdue but they are relatively recent.

We women are discovering our own voice, value, power, and the freedom of options afforded by the legal changes.   At the same time, the men who supported women with their physical strength and ability to earn money in the past are struggling.  They face the question of how to be men who are needed by financially secure women  Both sexes are like teenagers who have a driver license and know where we want to go but we still need to ask for the keys to the car and be home by curfew.  Part of us relishes the new roles and part of us reverts back to our old familiar roles that have been handed down from great grandmother to grandmother to mother to us.

The old culture required women to be advocates of others.  The new business world requires that we advocate for ourselves.  The old culture required that we hand control of ourselves to others.  The new business world requires that we control our own professional development.  The old culture required we be silent about small slights to keep the harmony of the family unit.  The new business world requires that we know what battles to fight and sometimes those battles are the small things that quickly can add up.

As we continue to become comfortable with our new roles and forge a new culture, what lessons would you like to pass to the next generation?

Speak Up to Influence Your Pay

Speak Up About Your AccomplishmentsHow much control of you life do you believe you have?  Certainly none of us have complete control.  If we did expressions like “Woman makes plans and God laughs” wouldn’t exist.  Will it rain during your vacation?  You will never know for certain but you can do things to minimize the chance.  For example, you may decide NOT to go to Bermuda during hurricane season.  Will you pass an exam?  You may not control the questions asked but you do control what and for how long you study.  Other things are completely in your control.  Will your bed be made today? Will you exercise for the recommended 30 minutes today?

Some people believe they have great control in their lives and others believe more in fate than control, they are said to have Internal Locus of Control and External Locus of Control respectively.    Some studies show that women more then men believe in External Locus of Control.  If true than it makes sense that women do not negotiate their salary as often as men.  If you don’t believe you can influence the outcome then why would you play the game?

Of course, all women and all men are not created equal.   You can take a quick 13 questions survey to see where your Locus of Control lies.  Ladies with Internal Locus of Control can take the advice of recent research released by Catalyst and promote your achievements loudly and proudly if you want to make career advancements, receive greater compensation, and be happier with your work life.  Ladies with External Locus of Control may be more anxious about touting their own achievements.

Anxiety aside, this is one of those good for you things to do, like the 30 minutes of exercise that was or wasn’t done today.  It may not feel great at first but eventually you will be surprised at how easy it can be.  Since you might feel like a Narc officer from a 1980s teen movie promoting yourself, think of NAARC when deciding what to highlight

  • Network of employees, customers, vendors, partners you have brought into the company
  • Alignment with the company’s future goals
  • Awards and Accolades earned from the company and the industry
  • Revenue you’ve helped bring into the company
  • Cost reductions you made or influenced

Good luck with Narcing on yourself.  It may take time to completely impact your work life but you could get  in the mood for the release of 21 Jump Street – The Movie.

The Power of “Why” in Negotiations

Why, A great question for negotiatingOften when we think of negotiating we think that only one party can win.  Over this summer we saw the US Federal Government negotiate the Debt Ceiling in a manner that was very much a winner-take-all type of negotiation.   The Republicans wanted no new taxes and the Democrats want to add some taxes.  It becomes nearly impossible to negotiate with such polar opposite positions. A similar type of negotiation is when parties are negotiating for their piece of a fixed pie. The various parties usually are gaming to have the biggest piece of the pie or in some cases the whole pie.  Both types of negotiations can become very combative – again look at the Debt Ceiling Negotiations as an example.

I’m going to share with you a different type of negotiation in which both parties can get bigger pieces of the pie than they even thought available.  It’s called collaborative negotiating.  In collaborative negotiation the interests of each party becomes much more important than the actual position of each party.  This allows one or both parties to consider solutions that allow each person to meet their interests yet it may not be in the form of their original position.

Here’s an example of interest-based or collaborative negotiating.

Parent:  Be home by midnight.

Daughter:  Sue’s party won’t be over until 1 at the earliest.  How about 1:30?

Parent:  I have to work tomorrow morning and can’t stay up that late to make sure you get home safely.

Daughter:  Can I sleep over at Sue’s house instead? That way you’re not worrying about me driving home and I get to stay until the end of the party.

Parent:  Sure, if it’s okay with Sue’s parents.

Those of you who remember being 17 or have teenagers are probably laughing at how calm and sane I made this example conversation seem.  In real-life, this could be a very emotional exchange with a door slamming or a few tears or the silent treatment.  But notice, when including the reasons for each party’s position (midnight vs. 1:30) a solution that wasn’t in the original mix becomes the solution that works (sleeping over).  The same can be said for any negotiation even when only one of the parties involved takes the initiative to learn why the stated position is desired.  Let’s try a salary negotiation as an example.

Employee:  I’d like to talk to about my salary.  Based on the current market and the increased responsibility I’ve taken this past year, I believe I should earn an additional $6,000 per year.

Manager:  I agree you have taken on more responsibility but a raise is not possible.

Employee: Why is it not possible?

Manager:  One reason is that we only give raises during the review process and that won’t be for another 6 months.

Employee:  Are there any other reasons?

Manager: The job title you have is capped at $2,000 more than you make.

Employee:  Do you agree that I am doing work at a higher level than my title and salary?

Manager:  Yes, you have taken on more responsibility than you co-workers.

Employee:  Would a senior title and the larger salary be possible now?

Manager:  A promotion can occur outside of the review process and you have stepped up.  Let me look into this more and see what is possible.

Again, this conversation may seem overly calm and sane to you but negotiations can and do happen all the time in such a manner.  Inside you may be a nervous wreck about hearing NO but if you focus on the reasons of your manager’s opposition than you most likely will become calmer and start brainstorming on potential solutions.  Whether or not your manager engages in the brainstorming is not important.  The fact that you took the initiative to find out why will give you enough information to resolve the negotiation successfully.

So, the next time you hear no, don’t think of how to counter it.  Think of how to understand it and ask the question “Why?”

© Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited