Let's kick-start your salary negotiations

​Last week, we said we'd start your salary negotiations. I hope you're ready, as this might turn out to be a bumpy ride!

But don't worry, by reading this week's Monday Money, you'll learn all you need, including:

• Why you should have a desired salary range (and not a fixed number!)

• What else to look for, apart from €€ compensation

• Why you should keep a Brag Book (and what it is!)

• Why and how you should interview with other companies

• How to deal with the emotions that arise around salary negotiations

• How to ace the negotiations

• What to do when the negotiations do (or don't!) turn out the way you hoped!

Today's Monday Money is written with negotiating a raise with a current employer in mind. However, most tips can be used for negotiating a new job too.

Why should I listen to you, Jonne?

Good question!

When I started my own firm, I was about 21 and getting my Master's degree. As such, I have always been self-employed and never had to do salary negotiations (apart from some side jobs I used to do in middle / high school).

You might wonder why you should listen to a person who has never had to negotiate his own salary.

I have however, been on the other side of the negotiating table many times. So I might tell you what to look out for.

Furthermore, I've had many negotiations in my working life, for example with clients about the price and scope of projects.

I've helped many friends renegotiate their salaries, helping achieve new offers as high as 36% more in the process.

And maybe you're not aware, but YOU have had thousands of negotiations yourself too, over the course of your life.

We don't often realise it, but many interactions in our day-to-day life are actually hidden negotiations.

Making new friends, be picked for a project group during your studies, selling or buying second-hand stuff, finding a partner. We're constantly buying, selling, exchanging value. And by figuring out how much something should be worth, and reaching an agreement, we're negotiating!

So you're absolutely ready for what's about to come, you've already done it thousands of times!

Let's get started.

Let's start by finding your desired salary range

Your salary (if done right) is a reflection of the value you add to a company. To them, you're both a cost and a way to increase revenue.

So, if you bring a lot of value to the company, your compensation can be higher.

It of course also depends on your experience and how 'scarce' you are: if there's not a lot of people who can do the job you do, you can expect to be paid more, and vice versa.

Now the key to successful negotiations lies in coming up with a desired salary range.

If you've done the salary research we discussed in last week's newsletter you have probably figured out a desired salary. Let's say that number is €35.000, before taxes.

Instead of telling your boss that's what you want to earn, it's smarter to come up with a desired range.

Let's say we add about €10.000 to this range. This would leave us with a desired salary range of €35.000 - €45.000.

Why is this preferable over a fixed number?

Because it leaves us with room for negotiation later on!

You might do a "concession" by accepting an offer in the low end of your range (say €35k) and actually get what you want!

Lastly, don't forget about which secondary benefits you'd like (especially relevant when applying for a new job). Think about: remote/hybrid working, travel, training, office location, equipment, company trips, meals, etc

Why you should keep a Brag Book

What's a Brag Book? It's not a book that's very proud of itself, but rather a list of work achievements you're proud of, showing your value to the company. I guess I could have called it a brag list.

In any case, it's a neat little collection of the great things you've done for your employer.

In creating your Brag Book, it's important to think like your employer or manager. What did you do that created value for the company? Remember, the more value, the higher your compensation can be!

For example:

Quantifying is key!

Pro tip! Get into the habit of keeping track of these achievements you're proud of and praise you've received throughout the year.

If your employer has a "review" system in place where colleagues leave messages about how it was to work with you, use this to your advantage.

Create a cheat sheet

Your boss or manager might be a busy person, so it is your job to present the most convincing argument for why you deserve a raise.

A cheat sheet will help you organize all of your thoughts, and make sure that nothing important is forgotten in the heat of the moment.

Set aside time to work on this before meeting with your boss. The best way to do this is by creating an outline like the one below:

• Target range

• Secondary benefits

• Summary of research (what other companies pay in similar positions). Include salary surveys and data compiled from Glassdoor or Payscale if possible (or at least some evidence that supports how much more you need than what he/she is offering).

• Summary of your Brag Book

• Additional argumentations of why you deserve a raise

Why you should interview with other companies

Ready to jump into the negotiations, cheat sheet in hand? Slow down champ!

First, you need to start doing job interviews with other companies!

One of the most important things to remember when negotiating your salary is that having other offers makes you more valuable in negotiations.

There are many reasons why it benefits you to interview with multiple companies:

• You will be more desirable if you have multiple offers on the table, which gives you leverage in your negotiations.

• You'll be able to walk away if things don't work out with either party

How to do job interviews with other companies

When you think about interviewing with other companies, it's smart to treat it like a normal job interview. Just because you might not want to actually want to work for them, you shouldn't treat it any less serious. And hey, maybe you actually like what they have to offer more!

Instead, treat it as an opportunity for you to get to know this potential employer better.

Be sure to ask about salary expectations in the first interview. This is most likely with HR and they usually have a set salary range for a position.

If they really don't want to give you the range, it might not be a good sign regarding ever working for them. In that case, tell them your expected salary range (or up it a little bit before hand) and then ask them if they foresee any problems with those expectations.

Once you have some offers in writing (not just verbal), then it's time for negotiations with your current employer.

You have to time the offers arriving well. Aim to get them around the same time. So don’t be afraid to slow down the process with one potential employer or to speed it up with another, in order to have all your options laid out at one time.

Practice makes perfect

The best way to prepare yourself for salary negotiations is to practice them with a friend or family member.

Make sure it's someone who's not going to be judgmental and can give you honest feedback on how well you did. This will help build confidence, as well as give you an opportunity to learn from your mistakes before the real thing.

Practice the talk like it's a conversation, not a fight or a competition — think of it as two people collaborating on how to come to a solution that works for both. They don't want to lose you and you'd probably like to stay.

However, it should be a fair agreement that both parties are happy with. You're giving your time, they are giving you a compensation, and both are valuable.

Employment is a two-way street. Just like the rest of the relationships in your life, it is important to both offer and ask.

Acknowledge your emotions

You’ve put in the hard work and earned the raise. Now it’s time to get paid what you deserve. The first step is acknowledging the emotions you might be feeling.

Negotiating salary makes even the most seasoned professionals nervous, but don't let that hold you back from asking for that raise! There are lots of reasons why someone might hesitate to ask for more money: fear of rejection, fear of sounding greedy or ungrateful, fear of looking bad by asking for more than others who work on their team—the list goes on.

But once you start thinking through these fears, they can be overcome with the right mindset, preparation and very simply by just going for it.

It's go time: the negotiation

You have prepared well: you've done your research, prepared your lists and have done some talking to other firms. Ideally, you'd also have some offers of other companies too.

Now, to negotiate.

First, setup the meeting with your boss / manager / HR. In person meetings are preferred, as it's more personal and easier to be likeable than through a screen.

If you do have to do the meeting remote, use it to your advantage!

If the meeting is remote, have someone in the room with you, out of sight of your camera. This person can give you confidence and give tips on what to say next.

I've done this with friends, by opening up a notes file on my laptop, increasing the font size and typing what my friend should say in this moment. Two know more than one!

Let's say you're doing the meeting alone, in person.

Start by introducing why you have requested this meeting. You want to talk about your compensation.

Now, mention your ask. Say that, based on your research and the value you add to the firm, a salary range of X to Y € is a fair compensation.

PAY ATTENTION: It's very important you stay in control of the conversation and mention your desired range FIRST, before the other party can name a number.

This is because of a cognitive bias called "anchoring". In our case, the first number mention in the conversation will be the baseline (or, the anchor) that all future numbers will be compared to.

Imagine you want to sell your old TV for €300. If you say this amount first, anybody offering a lot less will look off, as you've already established a ballpark figure. Consciously or unconsciously, people will increase their offers to be closer to the €300.

(This is also why different subscription packages are always shown next to each other. If the 'premium' package is €99 a month, the €40 regular package suddenly doesn't look that weird anymore 😉)

Shhhh, be quiet

So, you mention your desired range. Now, it's time to stop talking.

This might feel awkward, but whoever talks first, loses!

Give the other party time to take in what you said and come up with a reply.

Most likely, they will come up with some tough questions. Why this number is justified, where your research came from, what you did that made you outperform your currently role and compensation.

Negotiating

This is where your cheat sheet comes in. Don't be afraid to show it or discuss it with them. It shows you've done your research and are basing your ask on facts.

How this conversation goes really depends on whom your speaking to, how they are taking your ask and if they have room for increasing your salary.

Quite often, especially at larger firms, there is a salary range per job description. They might even do benchmarking, which is from time to time resetting everyones salaries to be more 'even'. If you haven't negotiated your salary when you started, there's a large chance there is definitely room for you to move up in compensation.

Don't forget to bring up any secondary benefits you'd like, too.

Other offers

Hopefully, you now also have offers from different firms. Depending on how the conversation goes you can choose to use these in your negotiation.

If you're comfortable with it, mention them, gently. Say that you have been approached by a recruiter or that you have talking to other firms.

You can say that you'd rather stay working at your current job (if that's true), but that it's hard to pass up a salary increase of xx% that this other firm offers (especially if we take inflation into account 😉).

So, ask if they can at least match the offer of this other firm.

Your boss might be willing to do so, or at least try to meet you half way.

They probably won't like to hear about you talking to other firms, but they can't stop you from doing so, and if you are tactful about how you tell them, they should be understanding.

If you mention other offers and they still won't budge, you have two options. Accept that you're not getting a raise and stay, or indeed take the other firm up on their offer. Remember that your salary increases most when you change firms (on average).

The actual conversation is the most complicated part, and the most unpredictable. I hope these tips help you navigate it better, but in the end, it is up to you!

What if it worked out?

Now that you've agreed on a compensation package it's time to get it in writing. Your boss, or HR, will probably follow up with an offer letter or a new contract.

However, it's a good idea to put stuff in writing immediately after your meeting, while your memory is still fresh.

Send them an email that goes like: "As per our discussion on... I am pleased to accept this role with an annual salary of €[amount], commencing [date].”

If there's something else important to you (e.g., stock options, other benefits), mention those as well!

Time to celebrate!

What if it didn't work out?

While not every negotiation will go perfectly, there are a few things you can do to make sure that if it doesn’t work out, you won’t be left with a bad taste in your mouth.

Don't take it personally. If your boss isn't willing to budge on salary, that's fine! It happens sometimes. This doesn't mean they don't like you or they don't want to keep working with you—they just might not have the budget right now for what you're asking for.

Both parties should remain respectful throughout the process and not burn any bridges. You will have to keep a good working relationship for a while longer, and even if you end up quitting, it never hurts to leave in good standing. You never know when your paths might cross again in the future.

You then have to decide if you want to stay with your current pay, or (subtly) keep looking around for greener pastures!

Remember, everyone has a different way of negotiating their salary. It also doesn't just depend on you. You can have the perfect preparation, say all the right things, and still not get what you want. Maybe your boss has very justified reasons as to why you can't get a raise.

Maybe there's a hiring freeze, or maybe the company is struggling to stay afloat.

But if you feel like your salary isn't competitive with others in your field and you're not getting any raises, it might be time to look elsewhere.

When all is said and done, there are plenty of other companies out there who would love the opportunity to have you work for them!

In the end, you have to do what feels right for YOU. I know it can be extremely difficult to walk away from a company that you've really enjoyed working for, but sometimes it's best to cut your losses and move on (especially if there's another opportunity out there waiting for you).

Main takeaways

Salary negotiations are tough and there is no one-size-fits-all solution. You can increase your chances of getting a raise by:

1. Doing salary research

2. Creating a Brag Book and Cheatsheet

3. Shopping around by interviewing with other companies

4. Preparing yourself for the emotions you might feel

5. Practicing the talk

6. Having a well-prepared and honest conversation

7. Knowing what to do if you do or don't get your desired outcome

Wrapping up

Hopefully today's email will help you in negotiating a better salary! If you end up using these tips for your negotiations, please let me know how it goes!

A special thank you to everyone that replied last week with their feedback (and told me in person 😃)!