Salary Negotiating: Why Is it Important?

Last week I posted a poll on LinkedIn,“How would you rank your salary negotiating skills from very strong, strong, mediocre, or needs improvement” and the results showed a majority voted “mediocre” or “needs improvement.”

As we apply for jobs; much of our emphasis is focused on the cover letter, resume and the interviews, that we tend not to think about how much our skills are worth, leaving our salary negotiation skills untouched. Most of the time it is because much of our thought is solely on getting our resume through the door and nailing that interview that we delay or even forget to think about how we are going to negotiate our salaries.

The truth of the matter is that when it comes to salary negotiations candidates tend to be hesitant to negotiate and tend to accept the first offer given to them. According to intuit Turbo, 58% of millennials have not negotiated their salary with 22.6% of that percentage being because they didn’t know how to negotiate their salary and the remaining 34.2% because they were scared of the consequences and they were happy with their current rate of pay.

As a potential hire you should never be scared to negotiate your salary for two reasons. The first is that companies are actually expecting candidates to negotiate their salaries. In many companies they have what they call “salary ranges” and based off the person’s role they could fall anywhere in that salary range. Additionally, Recruiters are having conversations with hiring managers before making offers to candidates to see how much flexibility they have on compensation just in case the candidate counters. The second reason is that if a company is retracting an offer or quickly dismissing a counter based on you trying to negotiate, then you can get a hint on how future conversations will be on salary increases once you are hired. Inuit Turbo goes further to state that 25% of millennials have not reached their earning potential due to the lack of knowledge of how to negotiate their salaries.

Failure to negotiate can affect your salary in years to come. Intuit Turbo uses the example that if you accept an entry level salary at $60,000 and receive an annual raise of 1% then by the time you retire at 60 your earning potential will be $86,705. On the flip side, if you negotiated a salary to $66,000, receiving a 1% raise each year and NEGOTIATE for a 3% increase every six years then your earning potential by the time you retire will be $111,574.

In summary, learning how to negotiate your salary can affect your long term growth and is an important skill to bring into your next role. Just remember, you are worth to be paid for the services you provide and you should never be afraid to ask!

To learn more on how to negotiate your salary please reach out to JSollis Advisors at jsollisadv@gmail.com or message me directly.