While you are worth every penny an employer pays you, negotiating salary is often scary.  What’s important to keep in mind though is that an employer is running a business and will always offer you a lower salary so that they get the biggest bang for their buck.  It’s up to you to make sure that you are accepting a salary that you won’t resent.  Below are some tips for how to identify what you should make and then negotiate when you have a job offer.

Where you are currently at:  

Figure out what you are currently making or what you made in your last role if you are no longer employed.  Calculate the difference in pay and then determine what the percentage increase or decrease it is.

Note:  Keep in mind that 10% is the average increase within a company if you are changing job titles and 2-5% is the typical annual cost of living increase.  You can use these numbers to help negotiate a higher salary.

Now if the company is only offering you a 2-5% increase from where you are currently at, then you need to evaluate how important the new job is to you.  If you are just leaving for a better salary, you might be better off staying in your current role as you will likely get an increase without switching jobs.

My recommendation is to aim for a 10% or higher increase.  This equates to a typical promotion that you would be eligible for at your current employer.  So if a promotion is not available within your current company, it would make sense to accept this offer.

Benefits:

Now figure out how much the benefits cost at your current company vs. the new one.  If the benefits cost more, you will need to subtract that from the salary they are offering you and then try to negotiate a higher rate to cover this additional cost.

You will also want to factor in changes in benefits.  For example, does the new employer offer something the current one doesn’t such as child care or an onsite health unit that can be used for confidential employee health exams and routine immunizations?  Or does the new employment package not offer some of the benefits that you are currently receiving?

Commute:

You should also determine what your cost of commute is by utilizing a commute calculator.  If the commute is less than what you are currently doing, then you can consider the new commute as a pay increase not only in money but also time.  If the commute will cost you more, find out if the company offers a tax free commuter benefit or car pools and ride match services.  If not, try to negotiate a higher rate to cover the additional cost for commute and/or ask for a flexible work schedule to make sure you are not commuting during high traffic hours.

Talking Points:

When it comes time to having the discussion you need to know what to say.  Here are a few possible scripts:

“You offered me $XYZ per hour.  Can you tell me why you are only offering $XYZ per hour?”

This helps you to understand where the company is coming from.  Perhaps the company starts all new hires at the same rate?  Once you know why, you can tell them that while the offer is low, you are sure that you can come to an agreement.

“My target salary is $XYZ, but I would be ok with $XX,XXX to $YY,YYY range.” 

Presenting your ideal target salary and a compromise shows an employer that you know your worth but are still open to the opportunity.  Just be prepared to accept the lower end of your range.

“Is this offer firm?  Would I jeopardize it if I discussed what is negotiable?” 

If an employer simply cannot pay more, perhaps there are other things that you can negotiate.  This is one way to broach the subject.  If they are willing to discuss, you can ask about commuter benefits, healthcare, vacation, flexible work schedules and childcare.

If the offer is firm, you can ask:  “Would you be willing to consider an increase after a 90 day review?”

My research has shown that the average salary for this position in this area is $XX,XXX.  Would you consider matching this? 

Presenting this information with an open ended question shows that you have done your homework but are open to discussion.  Sites like salary.com or glassdoor.com, as well as popular job search sites, can provide you with salary ranges for the position and specific location.

Other Questions to Ask:

• Can you provide me more information on the cost of benefits with your organization?
• What is your current 401K match and when does it start?
• You mentioned that I will be offered X number weeks of paid vacation after 1 year of employment.  Can I borrow time for a pre-planned vacation?

Finally

No matter what you accept, make sure that you are comfortable with either the number or the benefits and opportunity you will receive when given a job offer.

What types of questions do you typically ask during a salary negotiation?