I have the best older brother in the world. This is an inarguable fact. Except for maybe being a teeny-tiny bit shorter, he is pretty much better than me at everything. He is also nicer, smarter, better looking, more likeable, and overall, just a better person than me. He is three years older and has helped shape me into the person I am today. Without him, I don’t know if I would’ve even made it to college.
He always gave me a ton of advice when we were younger, but now that we’ve grown up, I don’t need as much help, yet he still consistently sends me small bits of information here and there. He would e-mail me articles related to my industry or send me any potential job opportunities he finds suitable. He also gives me interview tips and pushes me to strive to be better at my role.
The one huge help I received from him recently was how to negotiate salary. I know the majority of the time on Iamhellacheap, I talk about how to up our defense (retaining more money), but let’s spend some time talking about how to up our offense (obtaining more money). When it comes to money, offense is just as important as defense and it is probably a lot more fun to work on.
Recently, I was luckily able to successfully negotiate two substantial back-to-back raises at my company. This never would have been possible without my brother constantly bombarding me with links to websites on the topic. In fact, for the first couple of weeks, I kind of just brushed it off and ignored him. Being relatively young in my professional career, I was new to the entire process and found it quite stressful and scary. I thought it would be easier to just not do anything and accept whatever they gave me at the annual review. I wanted to take that route because it was the least confrontational and required the least work. However, my brother kept pushing and eventually, I gave in and started reading what he was sending. I ultimately ended up putting a lot of time into researching and preparing for my negotiation. It was a very excellent learning experience and it completely changed my viewpoint on the subject. I actually think the whole process drastically improved my life in a couple of ways, and while I am still working on improving this skill, I would like to share what I have learned in hopes of helping others do the same. A lot of the information I hope to share is from Ramit Sethi’s blog ‘I will teach you to be rich“. I strongly recommend everyone to check him out.
The number one problem I think young professionals, like myself, have in situations like this is lack of confidence. We don’t really know what we are worth, we don’t have a lot of experience negotiating our value, and it’s an intimidating process. At my first annual self review, I actually gave myself a lower rank because I was scared my boss would think I was too cocky. Sounds so stupid when I say it now, but at the time I was scared of confrontation or having to defend my worth to him. I kind of had the “I’m lucky to have a job here” mentality. A lot of us also don’t want to ask for raises or promotions because we either don’t think we’re qualified enough or are scared of the backlash. But if you really think about it, as long as you ask for something that isn’t completely outrageous, the worst thing that can happen is that they will say no. It’s kind of like hitting on girls; you’re never going to get it if you don’t put yourself out there and ask. Also, along those same lines, you want to stretch your reach as high as you can, within reason (of course).
So when it comes to determining how much we should ask for, the first question that may come to mind is “What’s the average annual percentage raise?” In my opinion, this shouldn’t matter for a number of reasons. What you made last year might be a benchmark of what you’re currently worth, but it’s just a benchmark. Most likely, you’ve improved exponentially in the past year and you aren’t even the same person anymore. So asking for the average percentage raise would be unfair to you. Also, what if you are currently getting underpaid? Using your underpaid salary as a baseline is just setting yourself up for failure. Additionally, if you are a relatively new college graduate, your salary is probably lower in comparison to the rest of the company; a 20% raise to you would mean a lot less to you than a 20% raise to someone who is more seasoned.
You really need to have your homework done before negotiations even start. You should have a very good idea of what your position’s pay range is at your company in order to make a reasonable request. You can actually just go to your HR department and straight up ask what the pay range is for your current position. It would also be a really good idea to know the salary ranges of competing companies as well, in case your company isn’t paying competitively. You should be able to find those numbers pretty easily on the internet. If the numbers you find don’t make you happy, going out and interviewing at other places will give you a better sense of your market value. Knowing what you are worth is incredibly important and will give you a better perspective of your situation. It will also give you more leverage when negotiating since you already know someone out there is willing to pay that much for you.
The very first step in negotiating a top-range salary, is that you need to first become a top performer in your role. Actually, just being a top performer is not enough; you need to be seen as a top performer. This might be an exaggeration but, I probably spend like 70% of my effort at work doing actual work, and the other 30% of the effort is spent on subtly letting my manager know about the good work I’ve been doing. I keep him in the loop, but I make sure I am not annoying him about it. I delicately drop bits of information over time, and slowly but surely, I brand myself as a top performer in his eyes. Once I know he thinks I am a top performer, I make sure that he knows that I know that I am a top performer. The reason for this is because I need him to know that I am aware of my own value. If my company thinks I don’t know what I am worth, it is possible that they will try to lowball me and give me just enough to make me content.
So now that you know what you want and you have the leverage to ask for it, it’s time for the actual negotiation. Ramit recommends to bring in a report that documents everything you’ve accomplished in the past year and what you plan to do in the next, as well as to quantify any amounts of money or time you’ve saved the company. I actually tried using this technique and found it to be incredibly useful for many reasons. First of all, I am not a strong speaker, especially in uncomfortable situations, so it was easier for me to just give everyone a copy while I read down a list of my achievements and gave details on each one. It also ensured that I wouldn’t forget anything. More importantly, it made my manager’s job easier because now he has something to use when he is negotiating with the higher ups on my behalf. Also, it ensures that my message gets across to people I didn’t even talk to.
I definitely recommend everyone to spend time researching and preparing before their negotiation. It is a lot of work, but it could make a gigantic difference in the result. In the end, I am sure that you will find it to be worth your while. Good luck!