What is Salary Negotiation?
For a new employee, a salary negotiation can be intimidating, but it’s one of the most important conversations to have at the beginning of your career.
Job candidates are often eager for salary negotiation tips, and with good reason: they tend to be at a bargaining disadvantage relative to the hiring organization.
But for a new employee, successfully negotiating a salary offer up by $5,000 could make a huge difference over the course of her career. A 25-year-old employee who enters the job market at $55,000 will earn about $634,000 more over the course of a 40-year career (assuming annual 5% raises) than an employee who starts out at $50,000.
Before we negotiate price, however, negotiation experts typically advise us to first assess the zone of possible agreement (ZOPA)—that is, whether there is an overlap between your reservation point (the point at which you are indifferent between walking away or taking the deal) and the other party’s reservation point. In other words, in the context of a salary negotiation, is there at least one number on which you and the hiring company can agree?
You can figure this out by researching your industry, talking to others in your position, and assessing your own qualifications. Prepare to explain the value you would bring to the organization. Develop alternatives to the current negotiation to increase your flexibility at the table, and remember that the other party’s alternatives may be less attractive than yours.
Consider too, that during a salary negotiation, job candidates often focus on back-and-forth haggling strategies. But it’s at least as important to think about our broader goals, the type of organization we’d be joining, and the best way to frame an offer.
To learn more and refine your salary negotiation skills, download our FREE report, How to Negotiate Salary: Learn the Best Techniques to Help You Manage the Most Difficult Salary Negotiations and What You Need to Know When Asking for a Raise, today.
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