Negotiations are rarely easy conversations. But if this is a job you really want—and this is a company that really wants you—you can work towards a win-win salary negotiation.
You get the compensation you feel is deserved and the company leaves the table feeling they are paying a fair price for the talent they are getting. That’s easier said than done, because when it comes to negotiations that involve salary even the most seasoned professionals can struggle, feeling they are giving up more than they want in exchange for receiving less than they deserve.
Standard negotiations practices usually involve each party calculating beforehand what they are willing to give up and what they are willing to accept, and then argue their case from there. That usually creates a win-lose situation, which is really a lose-lose situation, because if one party loses everyone loses. A win-win salary negotiation however, is as it sounds, a negotiation where both parties walking away feeling like they’ve won.
Here are 6 ways to help you create win-win salary negotiation scenarios:
1. Be Well Prepared
You’ve no doubt heard it before—do research to determine what your worth is for your position in the current market. It’s critically important to come to the negotiation table well-prepared, and that means current, relevant salary data. Conduct research using sites like Salary.com, and Payscale.com, use trade journals (they often have an annual salary issue) or a recruiter if you’re working with one. Keep in mind that some industries are more competitive than others and companies may be battling it out to land someone with your skills and experience. That could mean the average salary for a position may not necessarily be the salary for that position in your industry. When researching, rely less on the job title to find a fair market value and more on the actual job description. You’ll find a range for the work you do, and one way to get a good handle on it is to take the present going rate for the job, add in any individual value you bring to it (like specialized training or years of senior level experience) as well as any direct impact you believe you will have on the company’s bottom line.
2. Don’t Go First
The rule of thumb in salary negotiations is generally not to reveal your salary history or current requirement first, but instead to let to the employer put their offer on the table and then respond. If you go first you run the risk of naming a figure that’s too low or one that’s within the company’s offer range. That can lead to you leaving money on the table, so if you can, let them make the offer first. That way you know you’ve got the job buttoned up and can negotiate from a place of security. There are exceptions to this, of course. If you’ve definitely got the offer, you might want to go first and ask on the high (but reasonable) end, hopefully pulling up the company’s offer to come close to that. And if you’re working with a recruiter, transparency about your salary history is actually better, because that way the recruiter can give you a solid estimate of your market value.
3. Be Realistic
When you do reveal your asking price, don’t reach too high. Sure, you want to ask for a higher salary than what you’re willing to accept –as that’s how the game is played–but it’s in no one’s best interest to overdo it. The company already knows that someone in middle management or at an executive level has a good sense, on average, what positions in their line of work and at their level pay. If you ask for some pie-in-the-sky figure, they may not take you seriously and will feel you’re not behaving reasonably.
When you do name your price, back it up by showing how your actions, once you are in the position, will recoup the extra salary you are seeking. That could be through cost savings your presence will enable or the increased in sales, revenue, efficiencies and productivity.
4. Negotiate for Overall Compensation, Not Just Salary
Although this is technically a salary negotiation, what you’re paid may not always be cash. There are a host of non-financial incentives, like a low-deductible healthcare plan, flexible working hours, performance bonuses, stock options or more vacation time. Look at the whole package you’re being offered before you make your requirements known and understand that all those non-cash options have value.
5. Don’t Make Steep Concessions
One common mistake in negotiations where both sides want to walk away feeling satisfied is for one side—in this case, you—to make a steep concession that would reduce the employer’s offer. It may also lead the employer to expect other concessions as well. Another mistake in win-win negotiations? Agreeing to your employer’s demands too quickly. And it may actually affect the employer’s satisfaction with the deal too, because they came expecting some back and forth. Researchers at Northwestern University, the University of Southern California and leadership consultancy Ruda Cohen and Associates studied reactions to initial offers in negotiation and found that negotiators whose offers were immediately accepted were less satisfied with their agreement than were the negotiators whose offers were accepted after a delay. Which means taking a deep breath and thinking about the best response will be more satisfying all the way around.
6. Keep in Mind the Needs of the Employer Too
Win-win negotiators not only assess how good a deal is for themselves, they also assess how good it is for their counterpart. When we’re involved in a negotiation we generally form perceptions about both sides’ motivations, claims, wants and needs. You can increase the perception of a win-win negotiation by making sure you give your counterpart a real voice in the decision. Be sure to acknowledge the company’s perspective and invite the negotiator on the other side of the table to express their views and thinking behind their offer. Understand that to be in a win-win situation, the employer has to feel both you and they got a fair shake, and that concessions were fairly equal on both sides.