Your income is dictated by the value of your work, and the value of your work is determined by your education and productivity. But there's one last piece to this puzzle. Your income is also influenced by how well you market yourself.
Like it or not, you are a product. Your work and expertise are a commodity.
Your employer wants to pay as little as possible for your work. Your goal, on the other hand, is to be paid what you're worth. To bridge the gap between these two numbers, a smart money boss negotiates his salary.
Think of it like this. When you shop for a new car, you try to pay as little as possible, right? You might need that automobile, but you're not going to pay sticker price if you don't have to. At the same time, the dealer does its best to get you to pay more.
Your boss is the car buyer. She needs an employee but would prefer to pay less than list price . You're like that car dealership. You want to convince the buyer your employer to pay a premium price for your services.
You can increase your lifetime earnings by half a million dollars or more if you learn the art of salary negotiation.
It's one thing to know that you should negotiate your salary, but it's something entirely different to do it. What's the trick?
In his excellent book Negotiating Your Salary: How to Make $1000 a Minute . career coach Jack Chapman promotes a five-step process that almost anyone can use:
Delay salary discussions until after you're offered a job. (Same with raises: Discuss a pay increase after your performance review.) Let them make the first move. The first person to name a number loses, so always let the employer suggest a salary first. (For advice on how to deflect questions about your salary expectations, check out this video and this article.) When you hear the offer, repeat the top value then stop talking. This flinch is a piece of play-acting that buys you time while putting pressure on the employer. Counter the offer with a researched response. Before the interview, do your homework so you know a reasonable salary for the position. Use this knowledge to ask for more. (Start your salary research at sites like Glassdoor and PayScale.) Clinch the deal then deal some more. After you've locked in your salary, negotiate additional benefits like extra vacation days or a company car.
According to a recent study in the Journal of Organizational Behavior . failing to negotiate your starting salary can cost $600,000 during the typical career.
The same ideas apply when asking for a raise. The difference, of course, is that your company already knows whether you're an asset or a liability. To improve the odds of a salary increase during your next performance review, be prepared to state your case. Sell yourself!
Only about half of all employees in the U. S. negotiate their salary. A money boss always does.
Note: There are other ways to market yourself and your career. You might, for instance, develop an ongoing portfolio of your accomplishments at the office. This is handy when asking for a raise or when applying for a new position. You're also marketing your skills and abilities when you network with colleagues at seminars and conferences.
