"Boss, I want more money!" That gets to the heart of the matter, but does it get you what you want? Highly questionable.
Negotiating a plus on the pay slip requires finesse and tactics. In today's blog post we are sharing some valuable tips on how to get there. Because you don't get what you deserve but what you negotiate! That goes for your salary as much as for buying/selling a car or planning your next family vacation.
Negotiations can be uncomfortable, which is why some people try to avoid them. But if you don't negotiate, you lose – from money to time to quality of life. Putting it off is also a bad idea because renegotiating is even more difficult and based on the initial value that was too low to begin with. Especially the salary is adjusted in small steps, none of which should be skipped. Therefore: summon up all your courage, read our tips and score in your next negotiation.
Crucial negotiation mechanisms: Power and BATNA
You should be familiar with two fundamental mechanisms, to make sure the negotiation goes your way. They concern power and available alternatives (BATNA).
Most of us are under the illusion that we have less power than our negotiating partner (who thinks the same, by the way). This is because we only know our feelings, fears, tensions, and expectations. Instead of getting anxious, let's keep the following in mind: Whenever someone sits down with us at the negotiating table, then we have something they want from us. And that, in turn, gives us power.
We should always be aware of this: We, ourselves, are the source of power in negotiations. Sure, sometimes it seems as if our negotiation partner has the upper hand – but if we don't let ourselves be intimidated by this, he or she loses that power and we are back on par.
Our negotiating power also increases with our available alternatives for a deal – the so-called best alternatives to the negotiated agreement (BATNA for short). With strong BATNAs, we are independent of the other party and can confidently negotiate our interests.
Example: Which applicant do you think goes into the salary negotiation more confidently? The one who already has alternative job offers in her pocket or the one who hasn't even applied elsewhere yet? The answer is obvious. That is also why you should apply at your dream employer last.
Before the negotiation – preparation is key
Great! The first step has been taken, the date for the salary negotiation has been set. (By the way, an ideal time is shortly before a project is successfully completed).
Now invest in a careful preparation to cut the best deal.
1. Inform yourself!
Are your skills in demand? What is the average industry salary for your position? Which non-monetary additional benefits are of value for you (half-fare/GA, pension plan, further education, etc.)?
And how much more is appropriate? In annual salary negotiations, you can ask for about 3 to 5 percent more salary. If you are negotiating due to increased responsibility and new tasks, you can ask for a raise of about 5 to 7 percent, and in the case of a promotion, you can ask for 10 to 15 percent more.
Based on this information, you calculate your specific pay claim (as gross annual salary including all additional benefits) plus 10 to 20 percent negotiation margin.
2. Line up your arguments!
Let's back up this pay claim with some solid arguments. Rent increases, higher leasing rates and the like are not valid arguments for a salary adjustment. It is better to argue based on competence – your successful project conclusion, more responsibility, how your work contributed to sales increases or cost reductions; ideally in numerical form to make your success more tangible (such as "20% sales increase").
Your advantage: Competence is one of the most important qualities in professional life – but it can only be measured and assessed to a limited extent. This plays into your hands. Don't sell yourself short, but keep your competence high – the more competent you sell yourself, the more competent you will be perceived. If you believe in yourself and show confidence, others will follow suit. Ergo, your boss will judge you accordingly competent and perceive your demands as reasonable.
3. Prepare your conversational tactics!
Since rhetoric plays an essential role in negotiations, you should prepare your tactics in advance. Draft wordy arguments, peppered with industry lingo, to appear well-informed and sophisticated. Include breaks, as these convey decisiveness. And keep your best argument as ace up your sleeve. Rather, start with your second-best argument, followed by the next best to counter objections. At the very end, play your trump card.
It is also advisable to align your tactics with the nature of your superior. Analyze your boss, know what makes him or her tick and phrase your arguments accordingly. A harmony-minded boss will certainly appreciate your contribution to team spirit more than a pragmatic strategist who can be convinced with numbers.
You don't know what makes your boss tick? Then argue based on company values and goals (customer-oriented, quality-oriented, sustainable, etc.).
If you follow those steps, you are well prepared and ready to go for any negotiation.
Next week, we will share advice you can use during your negotiation and how to wrap things up – so stay tuned.
Your Coopers team
Photo by Andrew Neel via Unsplash.com
