How to get the pay you deserve13 April 2015
Have you ever wondered why some people earn much more than others in similar businesses? Or why some consultants can charge almost twice as much for the same service?
While HR managers may claim that market forces form the basis for determining pay, in practice there is often no set rate but rather broad salary bands offering considerable flexibility. Companies are open to negotiation - and some individuals are more successful than others at securing the best deal.
Whether you are trying to negotiate a salary for a new job, seeking a pay rise in your current role or you are a consultant who has to agree a price for each contract, it pays to learn how to get the best rate for your services.
Business coach Joel Garfinkle believes the key lies in raising your own profile and worth: “I notice too many people in the workforce who put a tremendous amount of effort into their work and they don’t know how to get ahead, stand out and get noticed. As a result, they lose a competitive advantage that’s needed. I notice this is a theme across most demographics, but especially with women and people from cultures where ‘putting yourself out there’ is not taught.”
His research led him to create the PVI Model – it stands for Perception, Visibility and Influence – which he outlines in his book, Get Paid What You’re Worth. He advises people how to promote themselves in an authentic way, change the perception that others have of them and become more visible so they have more influence in the company.
“Many people rely simply on their performance because early in our careers, our performance is what moves us along. But at some point, they will be limited by simply relying on their performance,” he adds.
If we need to accept that we cannot rely solely on the quality of our work, we also need to overcome our distaste for negotiation, according to the US author and broadcaster Dr Phil McGraw.
The author of The New Rules for Winning in the Real World says: “Step number one is making the decision that you have the right to negotiate and that you are worth standing up for yourself, getting the best price, and not being taken advantage of. Claim that right, and know that you're not doing something wrong if you do.
“You don't need to like it; you just need to understand that's how the world often works. You're not browbeating or grinding someone down; you're simply playing the game that the system is set up for.”
Good preparation before the interview is the key to success. Research comparative salaries and the company’s financial status to ensure your aspirations are realistic, and consider how best to highlight your previous achievements.
Six Steps to Successful Salary Negotiation
- Find out what others are earning – research salaries for similar jobs to discover your market value and determine what would be realistic.
- Research the company – find out about the business and its finances - the more profitable, the more willing they are likely to be to meet your desired salary.
- Know what you are prepared to accept – have figures in your head for what salary you would ideally like and what you would be prepared to accept.
- Prove your worth – demonstrate your skills and experience and your achievements in your previous roles.
- Let the employer make the first offer – don’t ask about the salary until you feel you have secured your position.
- Consider other benefits – take into account the full package including any benefits they may offer. If they are not prepared to give you the right money, would they be willing to throw in other benefits instead?
Once salary negotiations begin, listen to what the company has to say. Christopher Voss, a former FBI hostage negotiator, says in any negotiation you should let the other person talk first. “A lot of people only feel powerful when they are talking, so they are just waiting for their turn to jump in… In fact, you can strengthen your hand if you start by just listening to the other side. Often they have at least three to five pieces of information that, if you knew what they were, it would change your entire perspective.”
In a salary negotiation, valuable information could include clues about what they like about you and why you are worth more to them than the other candidates.
No matter how impressive your track record, be careful not to appear arrogant or fixated by money. However Jack Chapman, author of Negotiating Your Salary, How to Make $1,000 a Minute, advises candidates to appear hesitant when they are made an offer. Saying "Hmmm" instead of "OK" can push $45,000 to $50,000 and can mean another $10,000 for high-level executives.
“Don't worry that the employer will change his or her mind about hiring you just because you ask for more,” says Jack. “If you've interviewed well - and you must have done that or you wouldn't be getting an offer! - you're the front runner already. Choosing the second best or going through the whole recruiting-interviewing-hiring process again will cost a company much more than $1,000 - $5,000 anyway in the long run.”
Ramit Sethi, author of the New York Times bestseller, I Will Teach You To Be Rich, advocates a more proactive approach. He claims his Briefcase Technique has helped him win jobs at Google, Intuit and a multi-billion dollar hedge fund as well as numerous pay rises.
It involves preparing a mini business plan, identifying the challenges and outlining a plan of action that you would use to solve them. Effectively it is a business pitch and could equally be used by freelancers to clinch a contract, by candidates negotiating pay for a new job or those seeking a pay rise and promotion. Once the issue of pay is mentioned, the candidate opens his or her briefcase and hands over the proposal.
While the Briefcase Technique requires an in-depth knowledge of the company, and is not for everyone, it can present a compelling value proposition to the business and help prove your worth, which is what successful pay negotiation is all about.
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