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Tuesday, July 21, 2009

How to negotiate a higher salary for your next job

Whether you are currently employed or unemployed below are several tips on how to get the most money from your next job. Companies use several criteria to determine employee salaries. These salary ranges are determined by the department head, hiring manager and human resources (HR). Be aware that the company is thinking the low number and you are thinking the high number or more. Before you even interview it's a good idea to answer for yourself what is an acceptable offer versus how much money you want.

How companies determine salaries:

1. Job title and responsibilities.

2. Education and years of experience.

3. Internal equity or salaries of other people in the department with the same or similar jobs. Employers manage internal equity by paying people within a salary range.

4. Online salary resources. These tools give employers an idea of salary ranges based on job titles, years experience, degree, skills, etc.

5. Applicant's current salary / what does the job seeker currently make. While this may not dictate the company salary range it will give the employer an idea if they are in the ball park.

Stick with the facts:

It's a good idea not to pad your salary when looking for a new job. A future employer may want proof of your salary in the form of a recent paycheck stub or verification of salary by your current company's HR department. If your future employer finds out you padded your salary they may not want to move forward with the offer. Since your previous salary is only one factor for future employers to determine your salary it is not recommended to pad your current salary.

Adhere to your number:

If you fill out the employment application and write down $65K as your desired salary the employer now thinks you want $65K. Instead, you should write "open" in the desired salary box. If it's an online application and you need to put in a number make sure you stick to that number during the interview process. Nonetheless things change during the interview process. If the interview process uncovers additional job responsibilities such as travel, long hours, weekends, etc. you can always use that additional information to change your desired salary.

When is the right time to discuss salary?

A good time to discuss salary is after the company has expressed interest in you and you have passed the second round of interviews. Nevertheless, it may come up as early as the first interview or before. Be careful who you discuss your salary with during the interview process. If it's the hiring manager or human resources it's okay to talk numbers. However, if it's a future peer interview you may want to side step any salary related questions. You can answer this by telling the future peer that you need to more information about the job before you conclude any desired salary amount.

How to answer the salary question:

When salary comes up during the interview the best way to answer is let the employer know of your current base salary and all additional compensation. Then add that you are looking for both an increase in base salary and total compensation. If they ask for a number be confident and tell them what you want for your next job.

How to ask for more:

Your total compensation is a formula of Base Salary + Bonus + Benefits (medical, dental, retirement, pension, vacation, stock, etc.) If a company is not able to offer you a higher base you can ask for additional money in the form of stock, sign on bonus, performance bonus or stock. These variable pay systems allow the employer to individualize employee total compensation based on a blend of personal and company performance goals. You may also be able to negotiate a quick salary review (6 months versus 1 year of start date). This would allow you to prove yourself to your future employer and give you the ability to earn more quicker. Paid Time Off (PTO) or Vacation days may also be worth negotiating if you feel the presented amount is less than you currently receive or less than you desire.

Don't make it all about the money:

In addition to compensation make sure you add that you are looking for career advancement, career challenge or job security.

Negotiate before you accept:

Once you accept the job don't go back and try to renegotiate the salary. Employers will think you are all about the money and not interested in their opportunity or company. Fight Unemployment.


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