It’s probably safe to say one of the most important negotiations most of us will ever engage in is a salary negotiation. It’s probably equally safe to say that very few of us are as adept at salary negotiation as it would behoove us to be. That’s why I was glad to have the opportunity to speak with Steven Reilly.
Reilly is a leadership and negotiation consultant and author of the book, “Negotiating with Customers: Never Take ‘No!’ for a Final Answer and Other Tactics to Win at the Bargaining Table.” In a recent interview, we focused on salary negotiation, and I started it off by asking him what the most common salary negotiation mistake is that people tend to make. He said it’s coming in with a demand on what they want, as opposed to explaining why they’re worth it:
Employers look at it and ask, ‘Why would I pay you that much more than your peers, or that much more than what the market would demand?’ So your argument needs to address that: ‘What I’m asking for is fair and reasonable, and let me tell you why. This is what I bring to the table; this is what I brought to the table over the last year.’ You really have to have your ducks in a row as to how you performed, and justify why you’re asking for it. You need to base it on your own merits.
I recalled having spoken with consultants who attribute the gender pay gap largely to poor negotiation skills on the part of women, so I asked Reilly if there are any differences in the salary negotiation mistakes that men and women tend to make. His response:
There are sometimes assumptions that women are not as assertive as men. While I see that in the workplace, I still think that there are as many assertive women out there as there are assertive men. So I think women have that reputation, when often it’s not justified. I do think women have more leverage when it comes to non-monetary compensation. They’re often able to negotiate more time off, child-care benefits, things like that. That’s one of the things I would tell people going in: You should have a monetary number in mind, but at the same time you should also be open to non-monetary compensation — things like additional days off, or working on specific projects.
How about generational differences in salary negotiation skills? Reilly said millennials tend to be more knowledgeable and aware going in:
They tend to take more advantage of digital information — websites that enable you to compare salaries in different areas and positions. Millennials also tend to be more aware of and open to non-financial compensation — everything from stock options to additional vacation days. Oftentimes, when millennials switch companies, they’ll demand that the days they’ve accrued at the previous company are carried over to the new company, whereas in the past that’s something that was never really negotiated.
As for whether there are differences in approaches that should be taken by people who are negotiating salary in the hiring process, and by employees negotiating for a raise, Reilly said there are significant differences:
Raises are often set by human resources departments — managers are given a certain range as to how much of a merit or cost of living increase they can give their people. It’s different when you’re negotiating for a new job. You’re not negotiating within a particular range; you’re really negotiating what the position is worth. If you know what the market is demanding for that position, and how many qualified people there are for that position, you have more leverage.
You often hear that the person who can walk away from a negotiation is the person who has the most leverage. I would say you have to evaluate both sides’ walkaway options. If you’re applying for a job, and you have a number of job offers in your pocket already, you’re in a better negotiating position. But at the same time, if the company that’s hiring has a lot of people who can fill that position, then you have less leverage. Where that applies to negotiating a raise as an existing employee, if you’re going to threaten to walk away from a negotiation and quit your job, you’d better make sure you’re willing to follow through with that.
I asked Reilly whether he has found that IT professionals tend to be any better or worse at salary negotiation than people in other professions. He said based on his experience, IT professionals have a tendency to see things in ones and zeros:
They tend to be very binary. My definition of negotiation is the middle ground between stonewalling and capitulation. Stonewalling is saying, ‘I don’t negotiate at all,’ and capitulating is saying. ‘I’ll take whatever you’re giving me.’
There’s ambiguity in the process of reaching that middle ground, and I do find that people who deal more with logic and numbers have a tendency to be more uncomfortable with that ambiguity. So I would encourage IT professionals to do their homework, and to be able to answer the question, ‘Why should I pay you more than I’m paying your peers?’ They should also give themselves room to maneuver. Let’s say you want a 10 percent raise — go in at 12 percent so you have some room to maneuver.
Reilly wrapped up the conversation with this piece of advice:
There are only two ways to close the gap between the lower salary the employer wants to pay you, and the higher salary you want. One is to convince them that the value you bring is worth the difference; the other is to trade concessions or swap options back and forth until you end up with something you can both live with. You’ve got to be good at both.
A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.