Negotiating a Salary (Without Being Lowballed)

Today we’re going to be discussing negotiating a salary. 

Your salary is one of the most important elements of a job package. At almost every company, raises are calculated as a percentage of base salary. If you have a starting salary of $10,000, do a great job, and get a 10% raise, you’ll end up making $11,000. If you have a starting salary of $15,000—$5,000 more—do a great job, and get a 10% raise, you’ll be making $16,500. That’s $5,500 more, which is $500 more than the difference in starting salary between $10K and $15K. With equivalent performance, a slightly higher starting salary turns into much, much more money over your entire work history.

Companies Hate You

One of the great mysteries to most economists is why, since the 1970s, overall salaries haven’t gone up for the bottom 99%. Their mystification mystifies me. It’s pretty obvious: because hiring managers, Human Resources managers, and executives have decided not to raise wages. The reason, of course, is because they hate you. Oh, if you talked to them individually, they would claim they don’t. But crippling someone’s salary for life is one of the most hateful things you could do to another person, so even if they have other rationalizations, for all intents and purposes, their actions are indistinguishable from someone who hates you.

Welcome to American capitalism. If you don’t like it, become an entrepreneur. And by the way, only about one in six entrepreneurial ventures actually survives. The rest crash and burn. So good luck with that.

Companies Try To Screw You in Job Interviews

In job interviews, one of my favorite questions they ask you is, “What was your salary at your previous job?” 

This is a fascinating question, because it gives them all sorts of negotiating leverage. It's also fascinating because, at least in some states and cities, it's been banned. But either way, if you say $20,000, then they can come right back and offer you $25,000, and justify their offer by saying “it’s 25% more than you made at your last job.” What they’ll tastefully keep to themselves is the fact that they easily pay other people $40,000 to do that very same job.

If you refuse to answer, they can go “tsk, tsk, tsk” and disqualify you as being uncooperative. There doesn’t seem to be any clear way forward.

Label What’s Going On

One way to proceed is by gently labeling what’s going on. Labeling is a technique from Chris Voss, author of Never Split the Difference, my favorite book on negotiating. 

With labeling, you state what’s happening in the current moment, especially surfacing any unspoken agendas. 

“You’re asking for my previous salary. It seems like if I tell you that, I’m giving up negotiating leverage.”

You say this nicely, and it’s the truth. Next, segue into a question, “How will you use that information?”

If they say, “we want to make sure we’re giving you a raise,” then you can say, “that sounds more than fair. When you’ve made an offer, I’ll let you know if it doesn’t constitute a sufficient raise, and we can proceed at that point.”

If they say, “we want to know so we can offer you something in line with what you made before,” that’s a non-answer. It means they want to use the information against you. You can respond, “that makes sense. When you make an offer, I’ll let you know if it isn’t in line, and we can proceed at that point.”

If they insist, you move on to the next tactic.

---

Ask How

In a neutral, curious tone of voice, ask, “You want to know my salary history, which gives you a negotiating advantage. How can I get you the information you need without it damaging my negotiating position?”

Now you’re getting them on your side. You’re presenting the problem with their request, and asking for their help in solving it. If they don’t respond with actual suggestions, but stonewall saying, “it’s company policy that we ask for salary history,” simply repeat “How can I answer that without damaging my negotiating position?”

It’s possible that they’ll have genuine suggestions for how they can get the information they need, without you having to lose negotiating leverage. The reality, of course, is that there’s no intrinsic reason to set a salary relative to your previous salary. At the executive level, no one makes that assumption. Marissa Mayer was paid $260 million dollars to become CEO of Yahoo (a job which she performed dismally, by the way). You can bet that her quarter-of-a-billion-dollar payday was not based on her prior salary at Google.

Answer with a Range

If they keep pressing, or you’re inclined to give them a number, don’t give them a single number. Give them a range, with the low end of the range being the salary you want. Make sure to do your research in advance, so you have a plausible reason for the range.

“A salary that would be in line would be between $30,000 and $45,000.”

Ask “How can I do that?,” give them salary ranges, and (if you've nothing to lose) turn the question back around on them.

If you’re in high-tech, you can then say with a straight face, “of course, Marissa Mayer would ask for $200 million to take that job, so you’re getting quite a bargain.”

My Idea: Turn It Back on Them

That was a joke, but if you’re genuinely feeling cheeky and don’t mind taking a risk, you can also turn their question back around on them: “It might make sense to answer that question if we preserve our negotiating balance. Would you object to giving me the salaries of the other people in the company who are in the equivalent job, so I can see the spread of what’s available?”

They won’t be willing to do that, of course, but it really underscores that they’re asking you to do something they wouldn’t be willing to do.

Role Play!

No matter what strategy you intend to use, get a trusted friend to role play all of these tactics so they feel natural and you can deliver them gracefully. You won’t internalize these just by listening to this episode; it’s practice that will give you the muscle memory to make them work.

Salary negotiations are critical to your career, which is why you don’t want to give up your negotiating leverage at the drop of a hat. When they ask for your salary information, label what they’re doing and turn the question around to ask them to help you provide an answer...one that doesn’t ruin your negotiating position. Ask “How can I do that?,” give them salary ranges, and if you’re brave, or have nothing to lose, turn the question back around on them. I take no responsibility whatsoever for your outcomes unless they’re awesome, in which case feel free to send me a handsome consulting fee. Somewhere between $9,516 and $15,903 would be perfect.

I’m Stever Robbins. Follow GetItDoneGuy on Twitter and Facebook. If you have projects that are stalled or taking too long, the answer is my accountability “Get-it-Done Groups.” Learn more at https://www.GetItDoneGroups.com. 

Image of woman negotiating salary © Shutterstock