How To Negotiate Your Salary

How to Negotiate Your Salary

One of the best ways to increase your income is through salary negotiations, either when you're first offered the job or during a performance review. It may make you uncomfortable, but it's extremely important. Here's how to get what you want out of a negotiation.

Image remixed from Nikolay Solidcreature (Shutterstock) and Bplanet (Shutterstock).

This is a guest post from J.D. Roth, who founded the blog Get Rich Slowly in 2006. Roth wrote Your Money: The Missing Manual and is the "Your Money" columnist for Entrepreneur magazine. His latest project is a year-long course on how to master your money, which explains how to slash costs and boost income so that you can pursue early retirement and other goals. This article is one piece of this course.

According to a recent study in the Journal of Organizational Behaviour, failing to negotiate on an initial job offer could mean missing out on over $600,000 in salary during a typical career. Before you go into the interview, have a minimum salary in mind. Base this on careful research using tools like,,, and Also take the time to ask friends and colleagues for confidential feedback on what the position you want ought to pay. This information will give you power.

But research isn't enough. Remember that the purpose of a job interview (or performance review) is to sell yourself. If you don't believe you're worth the price you're asking, your employer won't believe it either.

Focus on the value you bring to the company, not what comparable salaries are. When asking for a raise or making a move to another job, note your accomplishments, and attach time and money to them. For instance, you might point out that you automated your employer's TPS Reports, saving 40 work hours a month (or $500 a day). Create a written list of talking points and use this to make your case for a higher salary. Hand the page to the interviewer so that she has the info in front of her.

If you're just starting out -- you're a recent university graduate or moving to a new career -- you might not have hard numbers to prove your worth. In that case, pitch your enthusiasm and work ethic. At the very least, ask for about ten per cent more than what you're offered.

Now let's look at two specific salary negotiation methods. As you'll note, they're very similar.

The Noel Smith-Wenkle Salary Negotiation Method

Noel Smith-Wenkle was a job headhunter during the 1980s. He developed the following method to get as much money for his clients as possible during salary negotiations (which, in turn, meant a greater commission for him).

The first rule of Smith-Wenkle's method is to never tell the employer how much you'll take. Let the company name the first number.

The Smith-Wenkle Method involves four steps:

  1. If the company asks for a number on the application, leave it blank.
  2. When the company verbally asks how much you'll take, you say, "I'm much more interested in doing [type of work] here at [name of company] than I am in the size of the initial offer." Smith-Wenkle says this will suffice about 40 per cent of the time.
  3. If the company asks a second time, your answer is: "I will consider any reasonable offer." This is a polite stalling tactic, and Smith-Wenkle says this will work another 30 per cent of the time.
  4. About 30 per cent of the time, you'll reach this final step. Again, your response is a polite refusal to answer the question: "You're in a much better position to know how much I'm worth to you than I am." This is your final answer, no matter how many times the company tries to get you to go first.

Again, the purpose of this method is to get the company to be the first side to name a number. Once the company makes an offer, there are two options. If the offer is above your minimum, take the job. If it's below your minimum, tell them it's too low -- but do not say by how much.

The Jack Chapman Salary Negotiation Method

The best guide to salary negotiation I've found is Negotiating Your Salary: How to Make $1000 a Minute. In it, career coach Jack Chapman writes offers five rules for negotiating your salary:

  1. Postpone salary negotiations until you're offered the job. Let your potential employer decide whether you're the right candidate, and then talk about money. The same is true of raises. Discuss a salary increase after you have your performance review.
  2. Let the other side make the first offer. As in the Smith-Wenkle Method, your goal is to allow the employer to suggest a salary. Lots of people find it awkward to evade direct questions about salary history. For these folks, Chapman has recorded a short video that explains how to answer questions about salary expectations. (See also Penelope Trunk's advice on discussing salaries.)
  3. When you hear the offer, repeat the number -- and then stop talking. Chapman calls this "the flinch". "The most likely outcome of this silence is a raise," he says. This technique buys you some time to think while putting pressure on the employer. Often they will come back with a higher offer.
  4. Counter the offer with a researched response. Your counter-offer should be based on what you know about yourself, the market, and the company. This is why it's vital to do some research before the interview so that you know a reasonable salary range for your position.
  5. Clinch the deal -- then deal some more. Your last step is to lock in the offer, then negotiate additional benefits, such as extra holiday days or a company car. This is like agreeing on the price of a car before you negotiate the value of your trade-in, and it's a great way to get a better compensation package.

Jack Chapman has an entire website devoted to career management. There you can order his book and view short videos filled with tips and scripts for salary negotiation.

Salary Negotiation Tips

These two methods offer an excellent framework for negotiating your salary, but we all know there's more to the process than simply waiting for the other side to go first. Here are some of the best negotiating tips I've gathered during a decade of writing about money:

Be brave. The biggest mistake you can make is to not negotiate at all. Don't make excuses -- "The economy is awful", "I'm lucky to have this offer", "I'd rather have a root canal" -- and don't fret about being rejected. The courage to negotiate is especially important for women -- men are four to eight times more likely to negotiate salary. Most companies are willing to negotiate salary, but most employees never give it a go.

Be prepared. Research a fair salary. Figure out how much you want -- but ask for a bit more to leave room for compromise. Practice negotiating your salary. Sit down with someone you trust and role-play the experience. Record yourself so that you can find your flaws. The more you practice, the more you'll feel comfortable during the actual interview.

Be silent. During salary negotiations, it's often best to let the other side do the talking. Using the Chapman Method, when you receive an offer -- no matter what it is -- follow the offer with "the flinch", a long period of silence. In You Can Negotiate Anything, Herb Cohen writes," Oddly enough, silence, which is probably easier to carry out, can be just as effective as tears, anger, and aggression." Silence is golden.

Be persistent. In many cases, the employer will reject your first request for a higher offer. Don't let this deter you. Push back gently, justifying your proposed salary. Explain how the company will benefit from the investment.

Be patient.The deeper you get in the process, the more committed the company is to hiring you. Do not mention your current income or your salary expectation -- not even on the job application. If you do, you provide an anchor for the negotiation, and that can only hurt you. Wait for the employer to make the first mention of money.

Be flexible. If the company won't budge on salary, negotiate other compensation. Ask for things like an extra week of holidays, a private office, or a flexible schedule. (Maybe you can work four ten-hour days instead of driving to the office five days a week!) Other possible perks include transport passes, educational reimbursement, performance bonuses, or permission to bring your dog to work.

This guide to salary negotiation is just one small piece of the year-long Get Rich Slowly course, which also includes 18 interviews with financial experts and a 120-guide to mastering your money so that you can retire early, pay for education, or travel the world. The course is on sale now.


    So what if you work at a large international firm which pretty much gives you no medium to talk about your salary (you get appraisals/performance reviews, but there is no talk on salary)? All firms I've worked for give you a letter on your desk telling you how much you're going to get (if anything), and all immediate bosses have no say/influence in how much you get.

    I've always found the whole process completely unsatisfying, impersonal and a morale killer.

      When Howard had his individual contracts. I was able to negotiate my wage, but that's bbeen the only time. Now it's. "On the chart your rated as c10 plus the skills bonus for other tickets. Equals $xxx according to your union EBA.

      My usual method for this technique is to find another job, one that pays better. Then ask your current company to match or better. It costs them 15-30% of your salary to find a replacement, not to mention down time (depending on how long it takes them to get their act together).

      And if your current company doesn't match the offer, clearly they do not value your efforts. Also indicated the long term viability of the job.

        So December last year I found another job. Offered 30% more, tried to get the old company to match (never tried that before, thought it would be good experience) and they came in over $10k short (after them stuffing me around for a week and coming to the table after finally handing in my resignation). My line manager blew up at them, the whole thing was quite hilarious. I had guaranteed bill ability for 2 years and they lost it when I left. I feel good about the move!

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