By Margot De Brolie, Founder of financial education platform, Juno
When we're young, there's a common misconception that it would be inappropriate to negotiate a higher salary.
However, studies prove that most of the time, companies actually factor in room for negotiations.
Only 38% of graduates negotiated their first salary when 75% of companies had left room to increase it by 5 to 10%.
Negotiating your first salary is particularly important, as it often serves as a baseline for any future salary.
So what might appear as a negligible salary difference at the start really adds up! Settling for a lower salary will have a significant impact over the course of your career, especially if you invested the difference.
Imagine these two situations in our pretty graph below:
If both women are given the same raises and promotions, then 35 years later the woman on the right will have made £175k less, which if invested (at 5%) would lead to a £451,602 difference.
How to nail the negotiation?
DO YOUR RESEARCH
You need to put an exact number on your salary expectations, and make sure your offer is reasonable. To do this, you need to research salary insights for your position and experience level, and make sure to be geography-specific. For example, wages in London are often higher than outside the city. A useful tool for this is Glassdoor- where employees anonymously submit their salaries and positions.
ALWAYS KNOW YOUR B.A.T.N.A.
In negotiation, there is something called BATNA (Best Alternative To a Negotiated Agreement). It is defined as the most advantageous alternative that a negotiating party can take if an agreement cannot be reached. It's basically your fallback. You need to enter a negotiation having a plan B because you are only as good as your other options. This means that ideally you set yourself up with 2 or 3 different job offers so that you are less reliant on one particular employer.
PRACTICE MAKES PERFECT
You cannot ask for a higher salary without justifying it appropriately. Write down those arguments, what makes you valuable to the company, where you outperformed yourself, and practice articulating your strengths. Don’t just state your desire, explain precisely how the company will benefit from it.
During the conversation
KNOW YOUR AUDIENCE
During the discussion, assess who your audience is and adjust your discourse accordingly. HR are typically given guidelines to follow and may be unable to break such constraints. On the other hand, a manager has more power over the decision to increase your salary.
SET A HIGHER PRICE
If you are entering the conversation wanting a £45-50k salary, make sure to pick the top of your range, not the middle as you might instinctively do. In this case, ask for a £50-55k salary. Employers will negotiate down so you need wiggle room.
THINK BROAD
If your salary is fixed, as is the case for some graduate schemes, you can still negotiate other factors. This includes reimbursed expenses, holiday days or sponsored training. For example, you could get your employer to sponsor the digital marketing course you've always wanted to do.
Salary negotiations as a woman:
A study looking at salaries of recent graduates in the US found that 57% of men had negotiated their salary when only 7% of women had. (The Muse) And there's a reason it's particularly daunting for us: it goes against the traditional gender norms we've been taught since we're little, aka sit still, smile, and be nice. These roles are so ingrained that male bosses have been found to penalise women negotiating for an increase, in a way that they wouldn't for male counterparts.
So where do we go from here? Stanford negotiation Professor Margaret A. Neale recommends women focus on a communal motivation for asking more. Think about why you receiving a higher salary benefits not only yourself, but also the company or the interviewer. She shares that during her interview, the whole theme was, “What can I do for Stanford and what can I do to help the Dean solve the problems that he has?”.
It’s understandable if you’ve gotten to the end of this and still think you can’t work up the nerve to ask for a higher salary. And I get it—discussing money with anyone can be tricky sometimes, and it’s especially scary when it’s with a potential employer. But trust me, you’ve worked hard to get to this point.
You have an offer in hand and have much more power than you think.
Margot de Broglie is the founder of Juno, a financial education platform for women and non-binary people. Their mission? To support more women to invest and feel empowered by their money. You can sign up to their info-packed newsletter here.