Expert: How to negotiate the 'most lucrative 5 minutes' of your life
Posted May 16, 2013
Durham, N.C. — Negotiating a salary for a new job or a raise at an existing job can be intimidating. Experts say most people negotiate the wrong way or, even worse, fail to negotiate at all.
“It brings up this universal anxiety of rejection,” said Steve Dalton, a senior career consultant at Duke University's Fuqua School of Business.
Dalton, author of “The 2-Hour Job Search,” says the biggest mistake people make is not negotiating and simply accepting whatever offer the employer makes.
“I think people are in such a rush to make the anxiety and pain of being in a job search go away, that they miss perhaps the most lucrative 5 minutes of their life. It really is 5 minutes of additional pain that could result in thousands of dollars,” he said. “All it takes is asking one more question, ‘Do you have any flexibility around salary?’”
An October 2010 study by George Mason University and Temple University researchers found that those who chose to negotiate increased their starting salaries by an average of $5,000.
“Assuming an average annual pay increase of 5 percent, an employee whose starting annual salary was $55,000 rather than $50,000 would earn an additional $600,000-plus over the course of a 40-year career,” according to the study.
While deciding to negotiate is an important first step, what comes next is just as crucial, according to Dalton. He advises job seekers and employees to do their research, be a good listener, be flexible and think beyond money.
“To respectfully negotiate, set up a meeting to review the offer – where you know you won’t accept the offer – and ask about each feature of the offer," such as salary, vacation time, relocation costs and bonuses, he said.
When the actual negotiation begins, be careful with word selection. Dalton advises against using emotional phrases, such as “I deserve …”
“It really isn't about deserving. I think less deserving people will get more money,” he said. “They're getting paid more because they asked for it.”
Instead, he suggests backing up a request for more money with research and data. Use sites such as Glassdoor.com to find the average salary for professions by location.
“It's not the absolute accurateness of those numbers that's critical – it's the fact that you are presenting your employer with facts,” Dalton said. “I think if you go in with facts rather than opinions, you are putting the onus on the other person to come up with their own facts for why it is the way that it is.”
For example, Dalton suggests telling the employer, “The average starting salary for someone from (a similar company) is 10 percent higher than the starting salary you mentioned.” Then, stop speaking and let the employer justify their figures.
“When you are talking about facts, it’s really hard to hurt feelings,” he said. “When you start talking about opinions and start speculating, that's when you get into some pretty tricky territory.”
If the employer won’t budge on pay, get creative and try another approach. Dalton suggests asking the employer, "Do you have any flexibility around a signing bonus? Do you have any flexibility around vacation time?" Then, pay close attention to their answer.
“There is a big difference when an employer answers a question, ‘No,’ versus, ‘Well, we don't have that much room to negotiate.’ That implies that they have some room to negotiate,” Dalton said.
At Duke, where Dalton advises students, he says both men and women tell him they don’t like to negotiate, but he notices a major difference in how they approach it.
“From the men, the question is, ‘How do I negotiate?’ From the women, the question tends to more frequently be, ‘Should I negotiate?’ That's a very big difference,” Dalton said.
Despite gender or job level, Dalton says it doesn’t hurt to ask for more money, vacation time or bonuses.
“You've got to go in knowing that you are going to negotiate anything. It doesn't hurt to ask. Asking is free,” he said. “The worst that can happen is they say no.”
Tips for negotiating anything
Dalton says anything can be negotiated, not just salary. He offers the following tips:
Buying a car:
- Be an informed customer. Do your research about the car and prices before you enter the negotiation.
- Be confident. Don't tell the salesperson that you don't know much about cars.
- Don't appear desperate. Visit other local dealers to see what they are offering.
- Focus on facts, not emotions.
Department and furniture stores:
- If you see an item that is slightly frayed, stained or marked, ask for a discount.
- If you are making a reservation at a restaurant for a large party, ask the manager if your group can get half-priced appetizers or happy hour drink prices.
- Negotiate before you get to the restaurant, not as you're trying to leave.
- Tell the manager: "I am looking for a refrigerator, but I know I am also going to need a dishwasher and stove in the near future. What kind of volume discount can you give me if I buy all three?"
"I look at negotiation as being part of a healthy lifestyle overall," Dalton said.