The salary negotiation process is, for a lot of people, the most stressful part of a job search. A lot of us are uncomfortable asking for more money than the initial offer and sometimes we don’t even know how much more to ask for or what else we can ask for. The Idea Coach Pat Miller talked to career coach Kolby Goodman about how candidates can best prepare themselves for this difficult conversation in this episode from The Interview “How to Negotiate Your Salary.”
How to Negotiate Your Salary
Pat Miller (PM): Today, we'll learn about the salary negotiation process so you can make more money. Isn't that what we all want? Welcome to The Interview presented by New Horizons. I’m your host, Pat Miller The Idea Coach. Our guest today is Kolby Goodman. He is a Career and Job Search coach with The Job Huntr in San Diego, California.
I just got to start here—is it weird that we still have to negotiate salaries in 2022? That just strikes me as weird.
Kolby Goodman (KG): The way that you are looked at as an employee by an employer is as an asset, the same way they would look at a forklift or a warehouse or a new piece of software. They're looking at you for your inputs to present outputs to then profit from. The negotiation process is designed to make sure that they're able to get a positive return on investment on you so that you can help them make more money, save money, save time, or reduce risk.
PM: If someone's really good at negotiation, how much more can they earn in a discussion or how much could they cost themselves if they're not good? Are we talking 2-3%? 10-15%? In your experience, how much money figuratively and literally is on the table if you get good at this?
KG: I would say 20 plus percent because ultimately it is your goal as the candidate to showcase your value outright. It's value propositioning. It's the same reason your next employer or your next manager, they're all consumers right? They're looking to make purchases to enhance processes to enhance life.
I think this kind of goes to the number one mistake a vast majority, if not all professionals make in the application, interview, and salary negotiation process is that they wait until the end to showcase that value proposition. They think “Okay, I have the job offer, here's the number they've given me, I have them over a barrel and let me tell them what I expect.” But if that employer does not believe you can add that value, if you haven't communicated that effectively and directly throughout every interaction they don't have to give you that number you want.
A sound employer with good values and a long-term strategy is willing to pay good money for good help but they're not giving that money away. They're not in the business of giving away profit but if you can showcase your value-add and your direct return on investment—the sky is really the limit.
PM: I'm sure we'll highlight a few different mistakes that people make but I want to stay on this one just for a second because you talked about weaving your value in, or maybe your expectations in, throughout the process. Can you give us some examples on what you mean by that?
KG: The universal language no matter what you speak or in business is numbers. Metrics and numbers drive everything and so the four buckets that any business is looking to contribute to or needles to move whenever they engage and invest in an asset, employees included, is how can this asset make me more money, how can this asset save me money, how can this asset save me time, and how does this asset reduce my risk. You cannot simply just be qualified. You cannot be an average candidate and expect above average salary.
PM: That's a terrific point. What are some other things that people do incorrectly when they're negotiating? Or some common mistakes?
KG: I think ultimately is not being educated on what's expected. A good employer doesn't simply just want a cog in a machine. They want a critical thinker and hopefully they want a problem solver. If you're not iterating your ability to solve problems and solve the right and important problems for that employer, you're going to be at a much bigger disadvantage. It's about how are you resolving the right pain points.
Going back to our consumer mindset, we tend to make personal decisions based on things that will relieve pain versus enhance joy and so if you can speak to and understand what are the major pain points of not only the company, or the department, the team, but the individuals within that team.
A killer question I coach my clients on asking at the end of any interview is “how can the next person in this role make your life easier?” It ultimately sets you up to say “Hey I’m here to help.”
PM: When we get to the point of negotiation, do employers expect us to make a counter to their initial job offer?
KG: Absolutely. You're being looked at as an asset. Your job is to negotiate. The employer's incentive is to always pay the least amount for the most value and so if you don't counter, then you are leaving money on the table. Just because you put a number out there and say “I want x plus 5 x plus 10 x plus 20” doesn't mean they have to give it to you. You have to justify that and if you wait until the very end, until that replying to the offer letter email, to make that justification it's already too late.
PM: What do you make of the employer that says “We're not going to negotiate,” or they're all acting offended if you try and counter offer? I'm sure you've seen that a thousand times.
KG: This, more often than not, is just an act to try and shut you down. I like when employers do that mainly because it is a peak behind the curtain of what somebody is like once the honeymoon period is over.
If you don't understand my value, if you don't believe in it, if you're not going to make the investment, that's not going to change once I’m on board. Being able to get that understanding in the forefront before you've made that really important long-term mutual commitment, I think that's a godsend. I'd rather have you learn that lesson before you sign on the dotted line and alter your life in some way to take this new job then get in there and within weeks or even months realize “I've made a huge mistake, this is not the right place for me, this is not the right culture.”
PM: If we get to the end of the road on money, we think we've gotten the most money we could possibly get but we're still not satisfied what else is up for negotiation? Maybe some things that we don't think of naturally.
KG: Equity or profit sharing depending on the size of the company and where they're at, obviously stock options for larger, publicly-traded companies. Other things that are important are things like stipends whether it's child care stipend, whether it's healthcare stipend, things that are required for you to spend money on to do your job.
Lastly and the big thing that's come into play both going out of the office and coming back in in the last two years since COVID-19 is remote work. I think that is something that a lot of my clients are coming to me now as the pandemic is becoming a little bit more controllable, the health risks have been mitigated through practice and medicine and all that, but with that, employers said, “Your time at home is over, come back to the office,” and people are realizing that they don't need that structure anymore. They also don't need to spend hours in the car every day. They don't need to have to get up early and have a hard clock in like all these things that we kind of got used to, we kind of got numb to pre-pandemic, and that we realized post dynamic is a life enhancer.
I have a client just a couple of weeks ago who was trying to figure out if they really wanted this job, but the commute is anywhere between an hour and a half to two hours every day round trip. I said, “Okay like if you want to make that sacrifice, if that opportunity is worth the time investment in the car it's totally fine, let's make sure you get compensated.” We did the math, they're going to spend 10 hours a week in the car, 40 hours a month in the car, that's an extra full week of work every month, that's three months of work a year in the car.
So be compensated for that like if you're going to want me to come in, I want to make sure that I’m compensated. Either I want a company car, I want a gas stipend, I want to be paid more in salary to make up for the time and money spent in the car, or I want a six-month trial in the office that I want an option then if I hit all these metrics. Then I can return back home full-time.
PM: If we get an offer from someone else and we're being recruited away should we show our current offer to our employer and ask them to match or should we just take the offer and go?
KG: That's a great question. It's something I deal with on a regular basis with a lot of my clients whom I’ve worked with for years and what I have seen more often than not is within six to 12 months after an offer that has been matched, that person leaves anyways.
It's something I’ve experienced myself in my first job, multiple jobs when I switched it was “I’m putting in my two weeks,” and then all of a sudden everybody white knuckles it and says “Why? You can't leave us, what can we do to keep you?” My thing is you could have made this practice of trying to keep me a habit but it's not going to change the way that you're perceived, it's not going to change the way that the culture has been that has allowed you to even contemplate taking this other offer.
PM: That's a great point of view I appreciate it and the conversation's been great I want to make sure that everyone knows how you help people with The Job Huntr. So tell us about the company and who do you help and how do you help them?
KG: My consultancy helps individuals looking for better jobs, looking for a career that fits into their lives and not vice versa.
PM: Sounds like a great service. Kolby Goodman career and job search coach with The Job Huntr in San Diego. Thank you so much for coming on today man I really appreciate it.
KG: Absolutely that's my pleasure thanks so much.
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Things to Remember
While money is an important factor for many of us when we're looking for a new job, there are also so many other considerations that will weigh heavily on the level of fulfillment you have with your new job. Our guide can help you ask yourself the right questions when you’re looking to further your career.
Ask these questions when considering career training programs.