Want to turn $5,000 into $634,000? (Who wouldn’t?) There’s one simple way: Negotiate your salary. Believe it or not, that jackpot is how much a 25-year-old who negotiates a starting salary from $50,000 to $55,000 could accrue over a 40-year career, assuming 5 percent annual raises, according to Harvard Law School.
How does that magic math work? Your starting salary at a new employer is the base from which all future raises and bonuses will be calculated. So it pays — literally — to fight for that number.
It also shows a confidence many employers value in new employees. “You will earn respect by negotiating your offer, assuming you approach it in a collaborative, respectful way,” says Rebecca Zucker, partner at leadership coaching firm Next Step Partners.
Whether you’re just starting out or sharpening your skills for your next move, here’s how to get what you deserve — for the rest of your career.
1. Know your numbers.
Just remember those numbers don’t always factor in company size or the micro-economy of your community, says Peg Newman, partner at executive search firm Sanford Rose Associates Newman Group. She also recommends reaching out to someone in your personal network or who is affiliated with the local chapter of your professional association for more nuanced information.
2. Don’t show your cards.
Whether you’re asked during an initial phone call or in-person interview, try to avoid divulging your salary history. You can simply say you were paid a competitive rate for your role.
Keep in mind that it’s actually illegal to ask this question in some places, including Massachusetts and New York City (effective October 2017) — so don’t feel bad about sidestepping it. You don’t want to be tied down to a previous salary, especially if you’ve been underpaid.
As you move closer to an offer, you might also be asked for your salary expectations. Still, it’s in your best interest to politely deflect to avoid undercutting yourself. Newman suggests a simple script: “Based on what you now know about my background and qualifications, where do you believe fair compensation would be within your salary target?”
If you’re pressed, you can give a target range, but avoid giving a specific number. Aim too low with a specific salary, and it will make it much more difficult to negotiate later; aim too high, and you risk pricing yourself out of the company’s budgeted range. It’s smartest to wait for the offer and go from there.
3. Think beyond salary.
Your compensation package includes more than salary alone. Once you’ve hashed that out, you can discuss the rest — from paid time off to flexible hours and other valuable perks. Just as you did with your salary negotiation, push for what you can.
Not fully satisfied with the company’s final offer, but still want the job? Make sure they know you’re looking to the future, says Newman: “Ask about their compensation philosophy. Are there milestones that would give you access to an increase? Do they offer bonuses?” A bonus tied to performance can be easier to negotiate than an increase in your base salary.
The goal is to know the path toward a number that will work for you — remembering that even if the salary is X, a bonus and other perks can still get you to, or beyond, your target number.
More from Grow:
Image via Unsplash