When starting a new job, it is vital to negotiate your starting salary. Changing jobs is often considered your best opportunity to increase your pay. Employers are routinely more generous with offers to employees they are trying to recruit than with raises to existing staff.
Studies have shown that less than half of candidates negotiate their job offers and those who do – earn significantly more throughout their careers than those who don’t.
Of course, it is important to do it right. If you ask for too little, you could be lowballing yourself and reducing your potential earnings for years to come. Conversely, unrealistic salary demands can price you entirely out of the opportunity. It is important to enter the negotiation with employers armed with the latest information about market rates, the value of your skillset, and a solid bargaining strategy.
Here is how to get started.
Know what you’re worth and what salary to ask for.
Research is key. You may know how much money you would like to earn (and we’ll circle back to that in a moment). Still, first and foremost, you should prepare yourself with the data on the compensation for roles similar to the one you are applying to, which gives you a starting ballpark number.
Some opportunities list a salary rate for the position in the job ad. That makes it easy for you to see what they hope to pay a candidate for the position. This way, you know right off if it meets your expectations. The majority of jobs, however, won’t list the pay in the job posting. So, you will need to do your homework.
Consult employer review websites like Glassdoor, which includes employee-reported salaries for past jobs. Statistics Canada also publishes the average salaries for job titles by sector and location based on the Labour Force Survey results. We summarize highlights of the average salary reports here on CareerBeacon regularly. Here is a recent snapshot of Canadian paycheques by region and industry.
Once you have determined your market value, you need to decide how much money you need to earn to be satisfied. Larger corporations in big city centres often pay more than rural firms, independent businesses, or the not-for-profit sector. So, there may be a trade-off between the type of employment you take, the workplace culture you desire, and the location of your employment and wages. The cost of living in your region should be a factor in your wage negotiations.
Here is a summary guide to how much you should earn to be comfortable in regions across Canada.
You shouldn’t bring these factors up directly in your salary negotiations. The employer is paying you for what you can do for them – not what you need in your personal life. It’s a business transaction. However, you need to know your own needs and what salaries to shoot for.
Knowing what to ask for is the first part of the salary equation. The other part is knowing what you bring to the table to justify earning the amount you are bargaining for. Fortunately, you should have already done this research before your job interview. It is the summary of your top selling points for the role, key accomplishments and abilities that set you apart as a top contender for the position. If your interview was successful and the employer is offering you the job – keep these achievements top of mind in the negotiations.
How to reply when asked about your salary expectations.
If there is no salary range listed in the job ad, the first mention of wages should come up at some point during the job interview when the employer asks you about your salary expectations. They should be the first to bring this up because it is considered a poor strategy for candidates to enquire about compensation for a role in the job interview. In the interview, your goal is to impress the employer with your passion for the role and ability to excel. Asking about salary right away can give the impression that you are only in it for the money.
But when they ask you, you have to say something. It is to your advantage not to be the first person to state a number in a negotiation. You can bargain more intelligently if you know what the other party has in mind from the outset. Try saying something like, “my salary expectations will depend on the specifics of the role itself. Can we discuss those in more detail first?”
This can buy you some time to further impress the employer with your industry knowledge, relevant skills and accomplishments, and professional demeanour. The more they want to hire you, the stronger your bargaining position will be.
You can only be coy for so long. If the employer wants to know how much it will cost to hire you, you must tell them your salary expectations. The best strategy to avoid lowballing yourself or pricing yourself out of the market is to state a pay range rather than a hard number. The low end of your range should still be a wage you would be happy to work for, and the high end should still be within the going rate for the position you are trying to get.
So, rather than saying your salary expectations are $75,000, try something such as: “Jobs like this one usually pay between $65,000 and $80,000. My experience places me toward the upper end of that range, but that depends on the overall compensation package offered.” It might be handy to reiterate your top selling points for the job, emphasizing the value you bring to the role to be at the higher end of the stated range.
This answer demonstrates to the employer that you know your value on the market and are prepared to be flexible. They can also make up for any shortcoming in base salary with potential perks in the job offer.
The offer is more than just money.
Your job offer comes with a compensation package that includes more than just your salary. Many of the other details in your contract can have a bigger impact on the quality of your life and your day-to-day happiness with the role than just a few more dollars per paycheque.
Consider an extra week of vacation time per year, flexible scheduling or the option for working from home. Negotiating a better job title can boost your resume for future opportunities and cost the employer nothing.
Be reasonable with your expectations.
Just remember to keep the negotiations friendly and professional. You are still forming an impression on the employer, and they are still determining if they want to add you to their team. They might rescind the job offer if you come across as overly-entitled or stubborn. Being too demanding in negotiating the details of your contract or unrealistic salary expectations can cause an employer to simply move on to the next candidate. You want to earn as much as possible, but you also need them to like you throughout the process.
Conclusion:
Do your research, find out what jobs like yours pay, and know the market value for your skills and experience. Calculate what the added perks a company offers are really worth to you. Negotiating your job offer is a good idea, and it is essential to be smart about it.