Salary Negotiations: A How-To Guide for Beginners?

June 30, 2005 6:01 AM

A friend of mine works in an entry-levelish position in a small firm in a certain industry. The job she has is really very good for her professionally -- the company deals in exactly the niche market she wants to work with, and they're giving her more to do, so she's getting excellent experience. The only problem is that our research indicates that they're underpaying her.

She's making 20K/year. Industry information shows that she would be paid about 29K in a "best" situation -- say, she worked in New York rather than here. We think that 25K is probably equitable.

So, the question is, how do you talk to your slightly eccentric boss/owner about raising your salary? I've never had to do this, and neither has she. Advice from other sources isn't what you would call consistent. She really needs the raise, too, and she doesn't want to work two jobs, having been there and done that, and experienced the "too tired to do the job that really matters as well as it should be done" phenomenon. Advice for this type of negotiation?

posted by Medieval Maven to work & money (15 comments total)

Finding work that suitable and getting that kind of experience, as you already know, is very, very difficult. I'm not saying you shouldn't do this, but let me advise that you approach it with great caution, because other jobs like it may be few and far between. It might be more useful to think of this job as a stepping stone to the next- getting paid less but gaining valuable experience to get to the next level. Payment isn't always money.
posted by fake at 6:10 AM on June 30, 2005

How long has she been working there?
posted by ThePinkSuperhero at 6:19 AM on June 30, 2005 [1 favorite]

ummm... counter-offer? Perhaps, applying for similar jobs with a better pay and coming up to her boss with a (even slightly better) offer? Of course, she needs to consider a few other factors. How many years in this job. Is she well-liked in her post? Is there competition?

All that said, I agree with fake, it is far more important she likes what she is doing, she is being liked there and she is getting experience... On preview... pinksuperhero...
posted by carmina at 6:21 AM on June 30, 2005

It's getting close to a year at this point. She had a not-so-glam job at first and now has moved into this better position. She's like office manager crossed with assistant (but not executive assistant) . . . I'm trying to think of how to describe this without risking getting her dooced. Someone who has a Very Important Job in the company has to be out of the office for an extended period. She is basically picking up the slack and "assisting" this out of the office person but this entails doing a lot of real work, under some direction.
posted by Medieval Maven at 6:24 AM on June 30, 2005

I don't think comparing the salary to NYC salaries is particularly useful, since that's a very different situation with much higher cost-of-living.
posted by smackfu at 6:34 AM on June 30, 2005

Depends to some extent on the industry -- some fields expect people to "pay their dues" more than others. However, that said, this is what an annual review is for. If there's no annual review process, she could use the job description tactic -- outline all the ways in which she does more than her job description and how she's gone above and beyond.

Asking them to bring her up to 25k is pushing it -- that's a 25% raise. It would be more reasonable for her to angle for 22k.

The other important consideration is what everyone else there is making. If there's several people making the same amount with similar titles, they'll be less likely to want to set a precedent.

Depending on how close she is with her boss, I don't think acknowledgement of financial worries is too much of a cheap shot for someone getting paid 20k.

On preview, absolutely second smackfu. No-one cares what New Yorkers make. Also on preview, she's in a good spot to get an official promotion, and should work on getting the accompanying $$. As long as she's still cheaper to pay than if they hired someone from the outside, she's got a good bargaining chip.
posted by desuetude at 6:40 AM on June 30, 2005

"It's getting close to a year at this point. She had a not-so-glam job at first and now has moved into this better position. "

That sounds a lot like ground sto ask for a significant raise-- AFTER SHE'S BEEN THERE FOR A YEAR. Nobody (not even a "sightly eccentric boss/ owner) can fault an employee who says something along the lines of:

"Mr. Slightly Eccentric, as you know, I've been here for a year now, and I've seen my responsibilities increase significantly during that time period. I really enjoy working here; I'm learning a lot about the Widget-Processing industry, and I'm surrounded by great people who are helping me grow professionally, and I appreciate that a lot.

I also feel as though I add a lot to this company (GIVE EXAMPLES HERE), and, as such, I think it's reasonable for me to ask if you would be willing to increase my compensation package to a level commensurate with my increased experience and responsibilities."

Or, she could use fewer big words; but, still asking for a raise after a year is PERFECTLY REASONABLE. No boss should fault her for that.
posted by dersins at 6:47 AM on June 30, 2005

It's getting close to a year at this point.

Well then make sure she askes for a performance review and comes to that performace review with a record of doing a good job [kicking ass helps] and a solid idea of what salary ranges are for her position in the area she lives/works in. I agree that the NYC range, while helpful, may be seen as off the charts. There is a lot of useful salary information Googleable, find a range of reports. Then, when she has a good moment to talk to her boss, basically there should be a talk like this

- have her get across that she thinks she's doing a good job
- have her boss say she's doing a good job
- have her say "since I'm doing such a good job in a job with XYZ salary range, I'd like you to consider making my salary equitable with other people in my profession"
- if they balk, try to compromise by making it somewhat performance-based and/or being implemented over a few years [so if she continues to kick ass, a raise of a few thou this year and a promise in writing of a few thou more next year]

She should mention that the current salary level is sub-average and imply that she is considering looking for a job that will pay her what she is worth [in the nicest way possible, this can backfire badly if the job says "okay, so walk then"] which can make it clear that she is serious.

Other tips are basically showing her value to the company -- if she fills in for someone of higher salary and does part of their job, explain that higher responsibilities are becoming part of her job description, etc -- her willingness to stay with the company and general all around competence at her job. If she's taking on increased responsibilities, that is always a good opening for asking for more cash.
posted by jessamyn at 6:47 AM on June 30, 2005

I would recommend against the counter-offer idea. Not only does it meant that you burn your bridges with the place that gave you the better offer but the attitude of your current company once you have accepted their counter-offer towards you will change.

See this page for some good reasons why you should never accept a counter offer.
posted by ralawrence at 6:49 AM on June 30, 2005

I vote with what dersins said. She should present the situation in a very positive light, that she is excited by the increased responsibilities and would like to continue to grow. DO NOT go with the counter-offer route by any means.
posted by matildaben at 6:53 AM on June 30, 2005

I suggest waiting until her next review period, which is most likely done annually. She needs to approach her boss with a list (mentally, not a white paper she plunks down in front of them) and discuss how her being there has contributed to the success of the company. It may be smaller things and one giant thing or a series of medium things. At any rate, her job in negotiation is to "sell" why she is important to the company and why she deserves the raise. Be wary of the "because I have bills to pay" or whatnot. The boss only wants to know about how you're making him/her and the company more successful, not your personal drama (which everyone has!).

She should go armed with an offer. Be prepared to work down from that figure until she is comfortable with a compromise. She should be able to be flexible. For instance, depending on the company, a $5K jump may be too much at one time. She can suggest X amount now, and a review again at 6 months with specific criteria in place.

Be careful with reading too much into salary reviews. In my experience, they vary wildly and are not really a good indication of what people are being paid in the real world. A better approach is for her to do informal surveys among her peers in other companies and see what the average is. The bottom line is that she needs to be earning what makes her feel comfortable - taking into consideration what the "value" the experience, benefits, etc. are, and not just the cash.

Also, if I'm reading the description correctly, it looks like your friend is going above and beyond her current job and taking on tasks that are above her current level. Just because she may temporarily be doing this doesn't automatically equate to more money in the company's eyes. They may expect a certain amount of this type of thing. However, she should definitely use it to her advantage by pointing that out.

The last bit of advice is to NOT be black and white about the whole thing. If she doesn't get what she wants, no need to get huffy and quit. Just dig deeper and find out what she needs to accomplish before they're willing to pay her the salary she is looking for. If they can't come up with a plan for her, then she should see that as a read flag and think hard about her other options. Contrary to popular belief, although companies want to make profits, they generally want to retain quality employees as well and if she is one, then they will most likely work with her and that's the attitude she needs to have when approaching the whole task.

Best of luck!
posted by cyniczny at 7:00 AM on June 30, 2005

It would involve a pay service, but Salary.Com may be of use to you and her.
posted by WCityMike at 7:37 AM on June 30, 2005

On the counteroffer thing: it's incredibly important to figure out who controls the money in this situation -- the immediate boss vs. someone higher up. The basic difference is whether the meeting with the boss is as adversary vs. agent. If the next step after "I'd like a raise" is followed by the boss saying "let me go ask and I'll get back to you", then the boss (your friend's agent) is in a much stronger position when dealing with the true adversary if they have a counteroffer to threaten with. ("She might walk unless you open your purse strings!")

Rereading, I guess that "boss/owner" makes it clear. Oh well. Probably the only bit of advice that still stands is that as much as possible, the meeting should be one of "can we colleagues work something out?" rather than adversarial. Surely the boss understands that the costs of replacing your trained friend dwarf this $5K raise, and wants to keep her happy that she's there. (On preview, as cyniczny said. Is that a Polish name?)
posted by Aknaton at 10:25 AM on June 30, 2005

This dersins character is wise.
posted by willpie at 12:00 PM on June 30, 2005

Dersins's advice is spot-on.

I was in a similar situation (coming up to annual review, needing a higher salary, but also doing way more, and way more skilled, work than I had signed on for a year ago).

Wait for a day he's in a good mood. Try to do something spectacular shortly before asking. Timing can be everything. And (thoughts on this, anyone?) I personally think that having the conversation later in the week (Friday, even) lets them think it over on the weekend and can help.

I don't think it's a bad idea to ask a friend at the company who has been there longer what strategies work(ed). Just make sure the friend won't talk. And getting an idea (if possible, it isn't always) of the salaries at HER company would also be smart--it can give her at least a feel for what she can expect vs. what is just never going to happen, area average or no.

I would recommend going in with a mental list of "acceptable" proposals (2K raise now, lump sum bonus in 6 months, whatever), and definitely knowing how to make the case for herself--her achievements, her responsibilities, the value she brings to the company, and most importantly how her job has changed from what she signed on to do.

I practiced a lot in the bathroom mirror.

And I also found that letting them know the area average salary early in the conversation is a good idea--which in itself implies that she's underpaid. Stress that she is happy to be working there and enjoys it and has learned a lot, etc. I would steer clear of saying that she needs the money for (insert reason here), as a boss can easily say, "That's your problem." It's better to make the case for why she's earned it rather than why she needs it (unless the boss is a softie who goes for that kind of thing).

And I'd hold back the implication or outright statement that she is looking elsewhere unless all else fails. That can go the wrong way far too easily (as dersins said).

YMMV. I think the key may be figuring out what works with HER boss, which can change the whole tone of the encounter depending on what he has (historically) responded well to.
posted by fuzzbean at 7:07 PM on June 30, 2005