Negotiating Your Salary (Interview Tips)

Most personal-finance blogs write about cutting expenses. But you can obtain powerful results by looking beyond frugality, by boosting your earning power. One of the best ways to increase your income is at the source: during salary negotiations, either when you land a job or during a performance review. This can be scary. For many people, salary negotiations are an awkward thing.

Jack Chapman’s book: Negotiating Your Salary: How to Make $1,000 a Minute offers five specific rules for negotiating your salary:

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1. Postpone salary negotiations until you have been offered a job. “The same applies to raises,” Chapman writes. “There, the rule is never discuss a raise until you’ve had your review.” Chapman says that the hiring (or evaluation) process consists of two phases: judging and budgeting. You can only hurt yourself by dealing with salary when the employer is judging instead of budgeting. (Chapman actually says there’s an intermediate “fudging” stage, too, but it’s not relevant to this review.)
2. Let them go first. Chapman argues that it’s difficult to win by being the first to name a number. Do what you can to let the employer name a salary first. For many people (and I’m one of them), it can be awkward to evade direct questions. Chapman recommends preparing for this situation. His website includes a short video on how to answer the question, “What are you earning?” or “What are your salary expectations?” (See also: Penelope Trunk’s advice on how to answer the toughest interview question.)
3. When you hear the offer, repeat the top value — and then be silent. “The most likely outcome of this silence is a raise,” Chapman writes. The book offers a specific technique for responding when you hear the salary offer, a technique that’s designed to give you time to think about it while also putting a little pressure on the employer.
4. Counter the offer with a researched response. Your next move is to make a counter-offer based on what you know about yourself, the market, and the company. Chapman says that it’s important to do your research before the interview so that you’re prepared with a reasonable expectation of the salary range for the position. The book explains what to if the offer is too low, too high (a nice problem to have), or just right.
5. Clinch the deal — then deal some more. The final step in salary negotiations is to lock in the offer, and then negotiate additional benefits. This is like locking in the price of the car you want to buy before you begin negotiating the value of your trade-in.

Have fun, and land a dream job!