8 tips for negotiating the salary you want

Negotiating salary for a new role within your organization versus a position with a new employer can be worlds apart since organizations may have different compensation structures for calculating salary.

Whenever I negotiated salary for a promotion or new position within my current organization, I would consider such factors as:

• The experience needed for the new position
• The additional responsibilities of the new position
• The unique qualifications I brought to the table
• The certifications or credentials I should have
• How I could leverage positive past performance reviews for a higher salary
• The cost of living, including inflation, where I would be working

Looking to a new employer changes those considerations. Rather than focusing on how I, as a known entity, can bring value to and be compensated for a new role, I focus instead on big-picture organizational factors like:

• The job description and requirements
• The organization’s revenue and profit margin health (e.g., is it a big, profitable company that can pay high competitive wages?)
• The competitive landscape for my functional skill set in the open market
• How other organizations in my geographical area typically compensate this particular position

So, which is more advantageous in terms of salary potential? That may depend on where you are on the corporate ladder. According to a 2022 Nasdaq article, which reviewed data from a Massachusetts Institute of Technology study, employees in the lowest 25% paid occupations benefited more from switching companies.

On the other hand, high earners (or those taking home the top 25% of salaries) benefited more from promotions.  

In my experience, leaving one company for another has offered more opportunity to command a higher salary. At least at the organizations where I’ve worked, promotions tended to result in a slight cost-of-living increase alongside a minimal raise rather than a significant pay increase.

There’s another factor to consider when negotiating salary, and that’s the economic climate. In times of economic retraction, companies may have less revenue or business even as the costs of goods increase. This combination results in declining profit margins, which lead to less room for paying higher salaries. As businesses react to inflation, in other words, it will have a direct impact on the salary you can negotiate.

With that in mind, let’s dive into some of the ways you can negotiate the best salary possible.

In my experience, having the right degree, the right certifications and relevant experience gives you the best opportunity to negotiate the highest salary for your desired position.

Can that be guaranteed? Of course not. Sometimes, you can have all the right credentials and still be underpaid. But I’ve found that, when it comes to negotiating power, the more education and experience you have, the better position you’re in to ask for what you want.

Government employment illustrates this best. While private organizations may not have to abide by the same federal regulations, those of government roles serve to illustrate the kinds of parameters in which salary is often negotiated. There’s a term called labor category requirements. Basically, to qualify for certain positions and salary ranges, you must meet certain labor requirements. Those requirements can be a bachelor’s degree, certification and/or a certain number of years of experience. If you don’t meet the requirements, the organization may not be authorized to pay you at a specific rate.

If this is your first promotion within your company, or a position at a new company that you haven’t previously held during your career, you might get an offer on the lower end of the spectrum. Employers know you’ve never earned a higher salary at this stage in your career, and you’re an unproven commodity.

I wish I could tell you that an employer would never offer less than the industry standard, but I live in reality. They know you want the job, and it may be your first position at this level. If they can lowball candidates to protect their bottom line, they probably will.

This is why you need to do your research at the outset. Visit websites like Glassdoor.com and the U.S. Bureau of Labor Statistics to get a handle on what the appropriate salary range is for someone with your experience, certifications and education.

On top of this, ask your network of peers, associates and mentors what they understand this role to typically command in the way of salary. Nothing is better than real-time feedback from someone in a similar role.  

The goal here is to collect as many salary data points as possible. The more you know, the better you’ll be able to negotiate for the best offer.

In my opinion, it’s best to wait until you have received an official job offer before you negotiate salary. Having a hard offer gives you more leverage when negotiating, because the offer represents the employer’s unquestioned interest in hiring you as an employee.

Additionally, waiting until you have the first offer provides insight into what the employer believes is fair compensation. Instead, focus on your skills and experience to emphasize what you can bring to a position and ask about what opportunities exist for career growth.

Be grateful, be humble and say thank you, but always ask for a slight increase if you believe there’s more money on the table. After all, accepting a lower salary could hurt your future earning potential. Bonuses and raises down the road will be based on the salary you are currently negotiating for and accepting. It’s important that you obtain the best value for your experience and skills. 

Take time to think about the salary. Using your research, consider the range in which you should be paid and what your skill set is worth. Take the emotion out of the offer acceptance and give it careful thought before you say yes or no.

If you have no option but to be the first to name a potential salary, always ask for up to 10% more than you’ll take (just be sure that number is within the normal salary range!). That way, if your employer negotiates down, you’ll still come out on top.