According to the American Psychological Association, nearly a third of American workers believe they are underpaid and suffer heightened amounts of stress due to what they perceive to be an inadequate salary. As more jobs become available and the hiring economy slowly improves, this provides many U.S. workers with the ability to look elsewhere for gainful employment and further negotiate their salary.
However, when seeking a new position, employees are often unaware of how much they are worth and run into trouble when deciding if they should negotiate a job offer, and if so, how aggressively? While each situation is different, there are some key questions you can ask yourself to more accurately determine whether the initial figure is indicative of what you’re worth on the open job market.
Considering the following 6 salary negotiation factors should give you an educated guess about the best course of action in your situation:
1) What is your current compensation structure?
Running a recruiting firm, when I see that an employer is offering a new job applicant the same or only slightly higher (less than 10%) of a salary than they are currently making, it typically leaves room for successful negotiation. In the majority of circumstances, you can be successful negotiating a compensation package that is up to 15% higher than what you are currently pulling in.
2) Have you held more than 3 jobs in the past 2 years?
If you have held numerous jobs in the past few years, employers will view you as less of a long-term investment and thus will give you less wiggle room when attempting to ask for additional compensation. Luckily, this can be prevented if you have sound reasoning for departing those past positions and you broach the topic earlier in the interview process, as opposed to waiting until you receive the offer.
3) Has the job been open for more than 2 months?
The more desperate a company is to get a job search over with, the more flexible they are going to be when approached for more money. Our executive recruiters have noticed a significant change in flexibility around the 2-month mark, as by this time an employer has spent numerous hours trying to find the right applicant and has most likely endured a lot of disappointments during the recruitment process.
4) Have you had experience in the industry?
Roughly 80% of the time when employers come to our recruitment firm, they have a hiring preference that the applicant have experience in their industry. Though experience and expertise don’t always go together, employers will still chase those with exact or parallel backgrounds. In most instances, all other variables being equal, the job seeker with the matching background will come out of the negotiation process with 5% to 10% more than a non-experienced individual whom our recruiters present.
5) How well off are you financially?
Our recruiters have seen that stress has a highly negative effect on one’s ability to influence a hiring manager, sales headhunter or HR representative. When negotiating salary, confidence pays.
6) How much are similar positions offering?
This is a complex situation, as it’s always intelligent to know what similar jobs are paying prior to asking for a number. However, telling the HR representative or recruitment professional that you arrived at this number because their competitor is compensating that amount can have the opposite of the desired effect.
If you negotiate salary based upon the feeling that you deserve more money, you are much less likely to succeed in your endeavors. Prior to approaching the topic of compensation next time, base your actions and requested figures on facts rather than feelings.