Wednesday, April 12, 2017

How to Negotiate a Higher Salary


Like many of you out there, I have been a bit dissatisfied with my current employer recently. So, with my full vesting date quickly approaching I have officially begun my job hunt again. However, one of the scariest parts – ok, let’s admit it, basically everything associated with a job change is scary; but still, the negotiation portion of accepting a job offer terrifies me. When I started at my current job I felt like the employer held basically all of the cards at the negotiation table and I came in with hardly anything. And as a result felt like I just had to accept their offer and move on. And over the past 3 years not much has changed, due to the culture here, I still don’t hold many cards and have felt like I have to just accept their “generosity” each raise cycle and move on. This last year I finally spoke up about how unfair the raise amount seemed to me and was blown off with a “too bad, nothing you can do about it” type of response.

But there is something that I can do about it. I can find myself a better option and walk out on them, right? So, in an attempt to make sure that I don’t find myself in a similar situation of feeling like I’ve been cheated at my next job I’ve begun to do my homework and learn some of the tricks of negotiation so that when I sit down with the pros I at least have a fighting chance.

I’ve started by listening to a few books about negotiation. One in particular has been a game changer for me so I wanted to share with you my notes that I’ve taken about salary negotiations. Please notice that these are just the notes that I’ve taken, not a full book review. Some of the bullet points might not make a ton of sense to you since I was trying to just quickly write down reminders, so I’ll refer you to the book for more detailed info because this is just a starting point for these concepts. Hope they help.

The book is called “Never Split the Difference: Negotiating As If Your Life Depended On It” by Chris Voss. The whole book is pretty good but the parts that these notes came from can be found in chapters 6 and beyond, where he discusses salary negotiation techniques.

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1.       When discussing salary
a.       Anchor their emotions for a loss – allow them to think that the worst news is on the way then play your offer as the alternative offer to the loss
b.       Let them go first – you don’t want to inadvertently offer something that is below their standard offer and you want them to show their hand first
c.       Offer a range – studies show that those who come in with an acceptable range of values get more than those who just offer a single number
                                                              i.      i.e. “Similar positions in are typically offer between $130,000 to $170,000.”
                                                             ii.     If you’re hoping for $130,000 but their cap was $125,000 they might be enticed to jump at the $130,000 because its much less than the $170,000 on your range 
                                                           iii.     If you have to go first, make it a bold range and be prepared to happily accept the lowest value in the range.
d.       Pivot to non-monetary terms -  offer things that are cheap to you but valuable to them, or ask for things that are cheap to them but valuable to you
e.       When you do talk numbers – Use odd numbers
                                                              i.      If the number ends in 0’s it is seem as movable but if it ends in obscure numbers it appears to have backing and more solid
1.       i.e. offering $74,897 instead of $75,000. If they hear $75,000 they will be more likely to continue to negotiate and get you to come down but will see $74,897 as your lowest possible option
f.        Surprise them with a gift – after making a bold offer and being rejected come up with a seemingly obscure gift – it will make them feel indebted to you and like they need to reciprocate the generosity
2.       How to negotiate a better salary
a.       Be pleasantly persistent
                                                              i.      i.e. an extra week of vacation, with a smile and justification – often they can’t give it so they will counter with a salary increase instead
b.       “Salary terms without success terms is Russian Roulette. Once you’ve negotiated a salary make sure to define ‘success’ for your position as well as metrics for your next raise that’s meaningful for you but free for your boss.” “Gets you a planned raise and, by defining your success in relation to your bosses supervision and leads to the next point.”
c.       Spark their interest in your success and gain an unofficial mentor.
                                                              i.      “Sell yourself as more than a body for the job. Sell yourself and your success as a way they can validate their own intelligence and broadcast it to the rest of the company. Convince them you’re an ambassador for their importance so they’ll have a stake in your success.
1.       Ask: “What does it take to be successful here?” – verbatim
a.       They will then want to follow your career to see if you will take their advice
3.       Remember
a.       All negotiations are driven by a complex system of underground needs, not just what would appear on the surface. Understand those needs.
b.       Don’t compromise, splitting the difference ends in a bad deal for both parties
                                                              i.      Story of the man who ended up wearing one black shoe and one brown shoe
c.       Approaching deadlines cause people to rush and impulsively make bad decisions
d.       “Fair” put the other side on the defensive and gains you concessions, emotionally charged word
e.       You can bend their reality by emotionally anchoring their starting point
f.        People will take more risks to avoid a loss than to realize a gain. Make sure they see there is something to lose by inaction.
4.       Understand what type of a negotiator you and your counterpart are and learn to play to your strengths – not replace them
a.       Analyst 
                                                              i.      Methodical and diligent, not in a big rush, wants to minimize mistakes.
                                                             ii.     Moto is “As much time as it takes to get it right”
                                                           iii.     Prefers to work alone and rarely shows emotion
                                                           iv.     Often speaks in a way that is distant and cold which puts people off
                                                             v.     Hates surprises
                                                           vi.     Hypersensitive to reciprocity
                                                          vii.     Skeptical by nature, apologies hold little value to them
                                                        viii.     If this is you – smile when you speak, don’t cut yourself off from your counterpart
b.       Accommodator
                                                              i.      Most important thing is the time spent building the relationship
                                                             ii.     If they’re communicating they’re happy
                                                           iii.     Love the win-win outcome
                                                           iv.     Want to remain friends regardless of the outcome
                                                             v.     Easy to talk to, has a pleasant voice
                                                           vi.     Poor time managers
                                                          vii.     Often the first to begin the reciprocity cycle
                                                        viii.     Approach to preparation can be lacking
                                                           ix.      Fears conflict
c.       Assertive
                                                              i.      Believes time is money, “Every wasted minute is a wasted dollar.”
                                                             ii.     Self-image is linked to how much they can get done in a period of time
                                                           iii.     Would rather get to a good solution quick than the perfect solution if it takes more time
                                                           iv.     Wants to win above everything else
                                                             v.     Aggressive communication style and doesn’t worry about any future interactions
                                                           vi.     Wants to be heard first.
                                                          vii.     Tells rather than asks
                                                        viii.     When working with one of these:
1.       Listen to show them you understand their views
2.       Use mirror phrases, calibrated questions, labels, and summaries
3.       Push them to say “That’s right!”
                                                           ix.      They want to give an inch and take a mile when reciprocating – deserve mentality
5.       Overcoming fear and learning to get what you want out of life
a.       People generally fear conflict so they will try to avoid it. “People in close relationships often avoid making their own interests known and instead compromise across the board to avoid seeming greedy or self-interested. They fold, they grow bitter, and they grow apart”. “Everyone hates negotiation at first.” Our natural impulse is to chicken out and run. It’s not the other person that scares us – it’s conflict itself. If you’re going to be great at anything you’re going to have to overcome that fear.
                                                              i.      “Don’t avoid honest, clear conflict. It will get you the best car price, the highest salary, and the biggest donation.”
                                                             ii.     Be honest about what you want and what you can, and cannot, do
6.       Tips for uncovering the Black Swans = The Unknown Unknowns
a.       Let the knows guide you but not blind you
b.       Black Swans are leverage multipliers
c.       Work to understand your counterparts guiding principles (religion)
                                                              i.      Dig into their world views
d.       Review everything you hear from your counterparts
e.       Exploit their similarities with you to show that you share common ground
f.        When someone seems irrational and crazy, they most likely aren’t. Search for motives
g.       Get face time with your counterpart. Watch for facial cues at the beginning and the end of the encounter or when something out of line is said
7.       Other great tips and quotes
a.       “Failures plant the seeds of future success.”
b.      Use lots of open-ended questions
c.       You want to guide them into coming up with the solution you want
d.       “Hope is not a strategy.”
e.       “I’ll try” really means “I plan to fail”
f.        Often ask them “How am I supposed to do that?” after they make an offer
g.       “Why…” questions make people feel uncomfortable and get defensive
                                                              i.      Unless you’re asking questions like, “Why would you want to hire me over your other candidates?”
1.       Forces them to work for you instead of against you
h.       “When the pressure is on you don’t rise to the occasion, you fall to your highest level of preparation.” – Be prepared
i.         Keep them talking until you can identify and use their Black Swans
                                                              i.      Hidden motives for their actions that they don’t want you to know. Events or actions that sit outside our rational expectations of what can happen
                                                             ii.     The Unknown Unknowns
1.       Everyone has at least 3 that you need to look for – not easy to find
j.        Find clever ways to say “No” without actually saying the word no.


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                Roy Largo
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