Salary Negotiation Strategy: $$$ on the Table
Having worked closely with job seekers, I have seen folks leave a fair share of money on the table because they fear losing an opportunity or job. For example, “Bob” was an Acme Acres employee for 10+ years. Bob was relocated because his skills were crucial to the firm yet he never asked for a raise for fear of losing his job. Bob’s loyalty did not stop this firm from laying him off. Now, his salary is grossly under his value and it is an uphill battle to find a job at the right 2012 pay.
A Gallup poll found that 43% of American workers think they are underpaid. To
them, I would highlight Bob’s story and tell them you need to prove your worth. It is not about how many hours you have worked nor about how badly you need a raise that counts. Your impact on others is key. If you calculate your impact in terms of the time or money you saved, you can state your case for a raise. It just takes creativity, research, and backing into key metrics around the three most important recipients of your efforts: individuals, teams, or an organization.
If you can prove that a key employee stayed with the firm as a result of your actions then ask for a raise based on the money saved by retaining this critical player. Imagine that you persuaded a senior manager who earns $100K to stay with the firm. A Huffington Post article asserts that the true cost of hiring (without the help of a recruiter) is $18K per individual employee. Add to this figure the cost to find his replacement with the help of a recruiter since he was a senior-level member. Recruiters can charge anywhere from 15%-50% of a candidates’salary. In our example, the conservative cost to hire a new person would have been $33K [Huff Post’s $18K+ a 15% recruiter fee ($100K base pay) = $33K]. Next find out what commission rates sales guys are making within your firm. If the average rate is 10% then in this case you can confidently ask for 10% from that $33K saved – which is $3,300.
When you improve a process you are helping others do things better or faster. This impact can be quantified by mapping out the affected parties. Figure out what their salaries are and then determine the minutes or hours saved. For example, if 6 engineers who are paid $100/hour are each saved 100 hours a year because they no longer have to touch a draft then you saved this team of engineers $60K annually. While you cannot ask for a $60K raise you can ask for a percentage (again, that 10% a salesperson would earn) from this $60K saved dollar amount.
When you are executing on a longer-term vision, your impact is tougher to quantify. Write out your 10 biggest wins that directly built the momentum needed to propel such a massive change. For instance, if you forged relationships with a major tech company and anticipated sales to that firm are $10M in 2013 then ask for 10% (or your average internal sales commission rate) of that $10M. Alternatively, if you did not achieve your goal then ask yourself was the target honestly realistic? If the goal was not realistic (and your boss agrees) then do this exercise above and fight for that raise based on your headway. Most importantly ensure that you have a chance to achieve the following year’s goals before agreeing to them.
Salary negotiations are nerve-racking. Initiating them with proof that you have made an impact will alleviate these nerves. And in my experience raises seldom happen when they are fused with personal motivations which is why spending time role playing different scenarios with a career coach can be critical in assuring that you don’t leave money on the table when it’s your turn to ask for what you’re worth to a firm.
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