Throughout history, David has been celebrated as the courageous shepherd boy that defeated the much more powerful and massive giant Goliath. On the surface, David appeared to be the underdog. Yet contrary to popular belief, this story has a much deeper lesson. In Malcolm Gladwell’s book ‘David and Goliath: Underdogs, Misfits and the Art of Battling Giants’, Gladwell reveals that “Giants are not what we think they are. The same qualities that appear to give them strength are often the sources of great weakness.”
What isn’t often discussed about the story is the fact that David was well-prepared to defeat Goliath. For example, according to modern historians, David’s slingshot was the equivalent of shooting a fair-size modern handgun!
Given this insight it’s fair to ask, what situations in our lives does it appear that we are combating a giant with little to no chance of success? Well, if you’re like most people, the modern-day version of this battle is salary negotiation.
According to a recent survey by Salary.com, only 31% of people consistently negotiate their salary. And as such, the majority of people are leaving thousands, even millions of dollars on the table by not doing the same.
Check out the scenario below:
Timid Tim. Initial job offer of $45,000, with no negotiation. Receives a 1 percent raise each year.
Assertive Adam. Initial job offer of $45,000, negotiates a salary of $50,000, and continues to negotiate raises, receiving 3 percent increases every year.
At the end of 25 years, the difference in their total earned income? $552,019.24!
Now imagine using that extra cash and applying the methods in my “What should I do with my money?” article. These numbers could very easily hit the multi-millions.
So what’s holding us back from asking for more money?
According to the same survey, 59% of respondents said they dread salary negotiations because it makes them nervous and/or apprehensive.
But isn’t it worth feeling a bit of discomfort for a few minutes to convert that ‘No’ into a couple thousand dollars?
David’s nimbleness and finesse allowed him to conquer Goliath. Being the little guy DOES have its advantages. With these tips below, you’ll have all the right weaponry to defeat your negotiation giant.
1. Size up your opponent.
David knew what he was up against well before he climbed that mountain. This same strategy applies to the negotiation process by understanding your negotiator. Generally speaking, the hiring manager is looking to have your services at a bargain. The hiring manager carries most of the risk in this battle, because they’re estimating your cost based on a sheet of paper and a couple of candid interactions with you. According to data collected by Bersin, businesses spend over $3,300 per hire on recruiting, which means that employers are already down 3 grand before you even step foot into the door. In order to reduce their risk, they will try to offer you the lowest possible salary. In order to counteract this attack, you must be prepared for combat.
2. Care not to share.
Most employers will ask about you about your past salary. Though it may be tempting, keep this information to yourself. Why? Because by revealing your past salary, you are offering the employer an opportunity to pay you the same salary with a small percentage increase. At this point of the game, your salary history holds no relevance to the position you’re pursuing. What’s most important is the value you bring to the company. If asked, just reply by saying “I would like to understand more about the position” or “N/A” if you’re applying online.
Coming prepared with data to an interview will set you apart from most candidates. You’ll come in with an expected salary range, which is a great starting point for negotiating. Some sites to get this information include www.salary.com, www.payscale.com and glassdoor.com. Also, starting thinking about total compensation. Research perks and benefits such as 401(k) contributions, vacations, and bonuses not just for the company you’re pursuing, but also their competitors. You’ll be surprised to find out how many companies are willing to offer these benefits in replacement for a higher salary.
The prep you’ve done up to this point will be worthless unless you practice. Most people come into negotiations with the mindset of “whatever happens, happens”. Wrong. Before you walk into that interview, make sure you’ve practiced at least 3 times with a friend, family member, or spouse. Try to get them to play an aggressive negotiator and have them come up with difficult scenarios so you can be better prepared. Pay close attention to your body language and the way you carry yourself. According to Dr. Albert Mehrabian, author of Silent Messages, 93% of communication is nonverbal. Therefore, your body language will tell the interviewer more about your worth to the company than any other component of the interview process. For more practice, you can try negotiating in low-stakes situations like negotiating your credit fees, gym membership, or rent.
5. Play to win.
Take comfort in the fact that you’ve taken all the necessary steps to have a successful negotiation discussion. You’re already at ‘No’, so all you need to do is convert it into a ‘Yes’. Imagine a successful outcome with both parties walking out of the interview process satisfied. Visualization may sound corny, but it’s used by some of the world’s top performers and athletes. Remember that you are doing yourself and the employer a disservice by not negotiating your salary. Being paid less than your worth is demoralizing, which will spill over into your success at work. During the negotiation, avoid self-sabotaging language like “I don’t know if you’ll consider this…” or “Maybe we can…”. Be sure to stand your ground and make sure you get what you deserve.