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The Art of Salary Negotiation

How you can negotiate your way to more equitable compensation -- and an elevated standard of living. 

Young woman in gray suit shaking hands with man in gray suit.

Negotiate poorly when buying a car or a house and you run the risk of getting a suboptimal deal.

Negotiate poorly when seeking a salary bump, however, and the consequences are often much more profound. Fail to secure a raise and you might feel bitter or unappreciated. You might even wonder if you really have a future at your firm. After all, a salary negotiation, in many cases, is a referendum on your performance and value.

Yet it's important to remember that even the most valuable employee can fail to claim a raise simply by virtue of terrible negotiating skills. No matter how good you are at your job, the company typically doesn't want to pay more than it has to.

And sometimes knowing when to ask is just as important as how.

So let's review the basics of successful salary negotiation.

Be Prepared To Precisely Articulate Your Value

When entering a salary negotiation, it's a good idea to distill the essence of your case into a concise, easily understood pitch. You don't want to come in unprepared and launch into a rambling monologue about your indispensability. As Charles de Gaulle so eloquently put it, the graveyards are full of indispensable men.

Know your value and articulate it well.

Offer A Figure Grounded In Research

This, of course, doesn't mean comparing your salary to another less productive but better paid employee. Find out the average salary for your position, or the position you're seeking. Salary information about the industry you're in, or at the company you work for, may also be relevant.

Be Open To Non-Salary Negotiations

If a monetary offer isn't to your liking, don't hesitate to put things such as paid time off or other corporate amenities on the table. Perhaps you'd benefit from a better health plan, or more fringe benefits. Or maybe you'd benefit from more time working from home.

The bottom line? Be willing to get creative in negotiations.

Don't Be Afraid To Test The Market

It's much, much easier to negotiate when you've already got a comparable offer in your back pocket. It's a fact of corporate life that sometimes long-term workers get taken for granted. When placed on the open market, a talented worker may suddenly command more attention.

The possibility of losing you to a competitor is usually the most powerful card in the salary negotiation deck.

Be Smart About When You Raise The Issue

If your company just had a dismal financial quarter, now may not be the right time to seek salary negotiations. If your company is in the middle of a salary freeze, don't expect to be the exception to the rule.

If your company is flourishing, however, the macro trends are firmly in your favor.

Don't Be Afraid To Get The Ball Rolling

Many workers will work for less than they're really worth, whether due to inertia or fear of rejection. Yet in this era of stagnant wages, it's more important than ever to assert control over your salary situation.

You need to take the lead, however, as your employer is likely more than happy to keep your wages at their current level.

Don't Take Rejection Personally

There are a variety of reasons, financial and otherwise, why a company may choose to deny a salary increase. Don't automatically assume you're not worth it. Improve where you can and try again in 12 months.

The Bottom Line

By not seeking fair compensation and regular salary hikes, many workers are failing to capitalize on their true value. By employing the tactics listed above, you can negotiate your way to more equitable compensation -- and an elevated standard of living.