Ask Jill:

How to Negotiate Salary

A monthly Q&A with Jill Schlesinger, CFP®, host of the Jill on Money podcast

Disclaimer: Jill Schlesinger is an ambassador for Marcus by Goldman Sachs and has received financial compensation. However, all thoughts and opinions are hers.

Marcus by Goldman Sachs is the sponsor of the Jill on Money podcast, featuring Jill Schlesinger, a Certified Financial Planner, CBS News Business Analyst and author of the new book “The Dumb Things Smart People Do With Their Money”. Listen to her podcast on Apple and Stitcher.

The Scenario:

You’re either hunting for a higher-paying job, or you’re looking for a raise in your current job.

The Question:

How do you handle a salary negotiation?

Jill’s Take:

Summer is over, the kids are back to school and now it’s time to focus on your most valuable asset – YOU! Whether you are just starting your career, considering a change or remaining in your current job, now is a good time to invest time and energy in the process. Here are some warm up activities to get you started.

Start with these four steps:

  • Step 1: Conduct research on the opportunities within your desired or current field. While the labor market remains fairly strong, there are some industries and specific roles that are faring far better than others.
  • Step 2: Dust off the resume and cover letter and be sure that it reflects who you are today. There are tons of online resources that can help with the resume prep process, but my number one rule when it comes to a resume, cover letter or any early communication with an employer: NO TYPOS!
  • Step 3: Update your online presence, including cleaning up your social profiles so they are professional and networking-worthy. This may include changing your settings so they are private. Then get busy and talk to people that you know or share a connection with.
  • Step 4: Practice your verbal communication skills. In the digital world, many have never really mastered how to communicate verbally. If you are rusty, practice with friends or family members and try to be clear and concise.

With those four steps complete, here are the next steps in the process.

"Memorialize any compensation conversations in writing and provide updates as necessary. "

For those who want to remain at their current jobs, but seek a pay increase

Create a list of your accomplishments. Management cares about results - either how much money you saved or made the company. Exclude how many hours you spent on a project... management often doesn’t really care about that.

Understand your company’s compensation culture. Some companies might have a specific time of year to discuss performance and/or compensation. In other cases, it may be best to bring this up with your boss at a separate time, before those meetings occur. Whatever the case, be sure you understand the best time to have the talk. 

Conduct the meeting. Once you’ve picked the best time for your meeting, discuss your progress with your boss. In addition to your achievements, discuss your specific experience and why it adds value to the business and makes your boss and your department, look good. 

Know the range. With your market research in hand, tell your boss what your position is worth in the market and then make “The Ask,” but do so with a twist. Researchers at Columbia Business School found that using a range, rather than a single number, may help you increase your compensation.

  • Here’s how it works: If you wanted a $100,000 salary, you’d suggest a $100,000 to $120,000 range to your boss. Ranges frequently lead to higher salaries for a simple reason: most employers are unlikely to go below the bottom end of your range. The key is to anchor the range with an ambitious, but reasonable number at the bottom, equivalent to the one you would have used as a single dollar offer. And don’t try to shoot for the moon – most successful range offers remain within 20 percent of one another.

"The key is to anchor the range with an ambitious, but reasonable number at the bottom, equivalent to the one you would have used as a single dollar offer. "

If the answer is no:

  • Think beyond pay…would the company consider: Bumping up your commission rate or stock incentives; adding more flexible hours or an extra week of vacation; or paying for continued education.
  • Get your boss to agree to revisit your compensation in six months and set a date for a future meeting. Ask for specific goals that you will achieve in that period – a certain percentage increase in sales, projects that will be completed – and be as specific as possible.

Send a follow up email. Memorialize any compensation conversations in writing and provide updates as necessary.

For those who are seeking a career change or are just starting out:

Figure out why you are jumping ship. Sure, a bump up in pay can be great, but will it require longer hours/days or a loss of benefits? Is there a pension involved? Would you lose precious vacation time that you love? Would a move require a longer commute? After doing so, you might come to the conclusion that you are better off staying where you are and asking your boss for a raise, in which case, see above.

Prepare for the interview. Conduct research on the organization and practice how you will answer obvious questions, like “tell me about yourself”, “why do you think you are a good fit for this job” and when the interviewer asks you if you have any questions, have a few in your back pocket.

Use the range (step five above). In many states, it is illegal to ask what your previous or current pay is – and many large companies have stopped the practice. If you are asked, a good strategy is to ask what the range of salary is for the position you are considering.

Mind basic etiquette. Do not be late, know your interviewer’s name, turn off your phone, be engaged and maintain eye contact, thank the interviewer for their time and conclude the meeting with a firm handshake. Follow up with a thank you email.

Double down on what works. If you are invited back for a follow up or a series of meetings with other people on the team, think through what struck you about the prior meeting and try to build on it with the next ones.

Have the money conversation. Employers will usually make a formal offer, but don’t be too quick to accept it. This is the time when you can make the case, based on your credentials, as to why you should be placed in the upper range of the company's salary range.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.