Salary Negotiation

It is unusual to find any working professional who feels entirely comfortable with the salary negotiation process, and Military Spouses are no different. With a tough job market across the globe, Military Spouses, even more than most, can be so grateful to receive an offer of employment that they are willing to accept significantly less compensation than they are worth—or than the position deserves. A 2002 RAND Survey found that military wives with a college education earned significantly less than civilian wives with the same qualifications, regardless of location or age (the study did not cover male spouses). The researchers suggested that:

“Employers may expect the military wife to move and so will not offer positions that require the accumulation of large amounts of firm-specific capital. Also, employers take advantage of their knowledge that the military wife will move by offering a lower wage even if investment in firm-specific capital is not a factor. Since the military family expects to move, the wife has limited time to find a job and start earning. A short time horizon leads to a willingness to accept a lower wage.”

The Employment and Earnings of Military Wives compared with Civilian Wives (RAND)

While salary alone should not be the sole determinant in accepting a position, it is very important for you as a Military Spouse to evaluate every job offer and make a conscious decision about whether you wish to negotiate the salary. Keep in mind that salary negotiation is important to both your financial stability and your long-term career prospects, because:

• Future raises are based on your starting salary.

  Although it can be easier to negotiate a raise once you are a proven employee, you may need to wait up to a year until your performance is formally evaluated and you have the opportunity to discuss an increase in compensation. When this occurs, your raise will usually be based upon a percentage increase to your starting salary. If you did not negotiate prior to taking the job, this first raise may only take you to the financial level you could have started with.

   

• Benefits and bonuses can be tied to salary.

  Company benefits such as contributions to 401(k) plans, annual and performance bonuses are often based on a percentage of your annual wage.

   

• You may need to list previous salaries on future job applications.

  Some employers, such as the federal government, require you to submit a salary history with your employment application. Although your skills, abilities and potential should not be judged on what you were paid for a given position, it does happen. Listing a less lucrative salary can imply that the requirements of the position were less demanding than they really were.

   

• Workplace satisfaction is reduced if you feel you are unfairly re-numerated.

  Discontent, frustration, and bitterness can be hard to avoid if you start a position and later find your renumeration is significantly less than what others have been paid for similar duties. Dissatisfaction with your salary can lead to a resignation. With limited time in each location, a Military Spouse needs to avoid “job-hopping” as much as possible. Make sure that you are happy with the employment package before you commit to work for a company.

   

If you do decide to negotiate, you should always remember that salary negotiation is a two-way process where both parties must have their needs met. Being realistic, prepared, and professional throughout the negotiation process will increase your chances of securing a salary increase, and will also establish the best working relationship with your new employer.

Research the Job Market and Know Your Worth

It is impossible to approach the salary negotiation process without first understanding the market rate for that type of position in your given location. While the median salary for a mid-level accountant in Washington, D.C. may be $71,000, the rate may only be $59,500 in Montgomery, Alabama, based on the reduced cost of living and the lesser demand for accountants. In researching your salary, you should be aware of two terms:

• Internal Equity: Research and understand what your target company pays its employees. Ensuring internal equity is vital to a company for both legal reasons and to avoid discontent amongst employees. This Payscale article highlights the importance of internal pay equity.
• External Equity: External equity, or the amount other companies in the same area are compensating their employees for the same services, is also important. If a company does not match the salary packages offered by competitors, it is unlikely to recruit new talent or retain its employees in the long term.

Researching salaries can be done in a number of ways. Sites such as Salary, Payscale, Glassdoor, and Vault get their data in different ways and allow different levels of flexibility in searching salary numbers without buying website membership. The Salary.com collects its numbers from employer surveys, but does not provide salary information specific to individual companies. Vault.com gets its data from surveys filled out by employees, while Glassdoor.com allows people to anonymously enter salary information. Each site has its advantages and disadvantages, but researching salaries on all these sites should give you a balanced approach to the market price for your target position.

The other way to research salary is to network and conduct informational interviews. Be aware that many employees now sign a clause in their employment agreement that prohibits them from discussing their individual salary. Rather than asking “How much are you paid?” phrase the question, “What do you think would be a reasonable starting salary for someone with my qualifications?” or “What sort of range do you think the company offers for people working in this type of position?”

Ideally your research should give you three figures:

• the minimum amount of money you would accept for that position,
• the figure that would delight you, and
• the market average.

Your research should always be done before you walk into an interview. Although formal salary negotiation usually occurs after a job offer, you make be asked to name a range or be given an idea of the company budget at the interview stage.

Should you negotiate?

When presented with an employment offer, your first decision really needs to be whether you want to negotiate. It can be difficult to make this decision on the spur of the moment, even when you have conducted thorough research beforehand. Ask for the offer in writing and, if appropriate, ask for a day or two to consider it. Some career coaches advocate that you should negotiate every offer, but if you receive a job offer that fits your market research and is close to or above the figure that you were hoping for, you may not have any evidence or accomplishments to justify an increase. When deciding whether to negotiate the salary, remember that not accepting the job leaves the door open for another candidate to re-enter the picture. Always consider the following points:

• How much does the company want you? Are you one of many suitable candidates, or do you have unique skills that you know this company wants?
• What is the overall employment package? Some companies have less lucrative salaries, but offer additional benefits such as funding toward further education, generous 401(k) and leave plans, or flexible working arrangements that may be particularly appealing given your military lifestyle.
• What are the long-term benefits of this job? Does it offer you a level of experience, training, or exposure you have never had previously? Is it a nation-wide company or one with which you could establish telecommuting arrangements in the future?
• How much can the company afford? Is the offer reasonable given your research into internal and external equity?
• How much do you want this job? Kevin Kermes, a Washington, D.C.-based career coach noted, “An average or even below-average package with excellent leadership, peer support, and a product or service you love will eventually manifest itself in excellent performance. This can result in bonuses, increased responsibilities, greater job security and promotions.”

Preparing to negotiate

If you do decide to negotiate, it is always preferable to negotiate in person. An in-person negotiation allows you to read the body language of the hiring officials and will give you a much better indication of the viability of your request. It will also allow you to immediately address any concerns and justify your request, rather than dealing with the delay of email correspondence. When preparing to negotiate, always ensure the following:

• Understand the position. You need a thorough understanding of the requirements and responsibilities of the position. Being overqualified for a position is not justification for an increased salary. Identify the main responsibilities of the position and then think about the skills, experience or accomplishments you have in each of those areas and how they will contribute to the way in which you perform in the new position.
• Prepare your business case. Identify the aspects of the employment package you wish to negotiate so that you can raise all points and justification up front in the initial meeting or discussion, rather than adding new items for negotiation as you progress through the process.
• Know your minimum acceptable requirements. A company may have the ability to negotiate some, all, or none of your requests. It is important to know at which point you are willing to cordially end a negotiation or turn a position down.

The Salary Conversation

As you enter the salary negotiation conversation, always remember that you are going to work with this company and these employees the following week. The conversation should always be cordial, respectful, and aimed at reaching a mutually beneficial arrangement. The best way to begin the salary conversation is to express your interest in and excitement about the position. Chances are that the company made the offer because you were a “good fit” for the organization. Your personality appealed to them, so don’t lose this advantage by appearing ungrateful or unexcited about opportunity to work with them. A simple statement can go a long way toward keeping your professional image with the company. Try this:

“Thank you very much for the offer. I am very interested in the opportunity to take on this position, but based on my market research and the skills and experience I am bringing to you, the salary was a little lower than I expected. Can we make an appointment to discuss this further?“

If the company is open to discussing the salary arrangement, you need to have prepared evidence that you are worth more than the original offer. One of the best ways to approach this is to reiterate the responsibilities and requirements of the position and then showcase the skills you have in that particular area.

“My understanding is that I will be responsible for a staff of six junior contractors and that I will be the main point of contact for the Financial Department, and responsible for all aspects of managing the annual budget worth about $300,000 . Is that correct?”

After receiving affirmation, demonstrate both your research and your qualifications, and include some tangible examples of your proven performance.

“Based on my market research for this type of position in the Jacksonville area, I understand that the salary range is usually between ___ and ____. I have over five years experience in very similar roles for both nonprofit and government organizations. In my last position, I was recognized for saving over $5,000 through identifying cost-saving measures and recouping funds from projects that ran under budget. Given that these are exactly the types of measures we are looking at implementing here, you know that I will produce results for you as soon as I am in the position. As an experienced Financial Consultant, I would expect my salary to fall in the mid- to upper part of the range for the Jacksonville area.”

If you are unable to negotiate an acceptable arrangement with the starting salary because the company is limited in funding or by internal equity, always explore negotiation of other benefits. Hiring bonuses, additional leave time, reduced or flexible working hours, increased company contributions to 401(k) plans, or the agreement to defer and give a salary increase in six months based on meeting set performance goals are all reasonable ways of establishing a more appealing employment arrangement.

Tips and Advice

Don’t negotiate until you have an offer.

You do not want to over-price or under-price yourself before you fully understand the job and have had the chance to sell your skills and abilities to the company.

Avoid mentioning money first.

If the company asks you how much you are willing to work for, always try to avoid being the first to mention a figure. An answer such as “I obviously need to understand a little more about the position before I would be willing to discuss that,” or “I would like to make sure this is a good fit for both of us before we discuss salary,” are both reasonable answers if the question is posed in an interview. If the question is posed later in the process, consider an answer such as “I have done some research on the market range in this location and I understand you are a company that fairly compensates its employees, so I am sure we can come to a mutually agreeable arrangement. What salary range do you have budgeted for this position?”

Confidence is vital.

Display the same composure, positive body language, confidence, and personal characteristics that helped you succeed in the interview.

Express appreciation for the offer.

It may take a few calls, emails or discussions before the final arrangement is reached, but always show appreciation for any concessions and offers made by the company. Show respect for your future employer by seeking a reasonable time frame in which to consider the offer. Finally, always thank them for their time and the opportunity, even if you turn down the position.