Many of us cringe when we think about negotiating, but failing to do so when it comes to our careers can really be financially disastrous. One study found that negotiating just $5000 more for a starting salary was worth over $600,000 over the course of a career.
George Mason University and Temple University researchers found that new hires who negotiated their starting salaries gained about $5000 on average. Although the difference between $50,000 and $55,000 might not seem like much, over the lifespan of your career it makes a big difference:
According to the study, which will soon be published in the Journal of Organizational behaviour, the compounding effect of successful salary negotiation can be significant. Assuming an average annual pay increase of five per cent, an employee whose starting annual salary was $55,000 rather than $50,000 would earn an additional $600,000+ over the course of a 40-year career.
In other words, if you don’t negotiate, you can stand to lose hundreds of thousands of dollars in your lifetime. Furthermore, when you’re just starting at a job, Fast Company points out that it’s the easiest and most critical time to negotiate about money: “It’s like dating before you get to know someone.”
We’ve highlighted lots of salary negotiation tips over the years. Looking at the cold, hard numbers behind what it might actually cost to not negotiate might give you more motivation to push harder for (or at least have the conversation about) the compensation you deserve. Tactfully asking for a raise at the right time, especially if you feel overworked and underpaid could still be very rewarding.)
Study Reveals the Secrets to Negotiating a Higher Salary [George Mason University via Fast Company]
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