Friday, January 23, 2015

How I used to negotiate my salary

I started working in 2007, just before everything changed. In 2008 companies were terrified of the economic shift and started cutting back as much as they could. This meant that I would never see a yearly raise. 

I’m not easily discouraged so I looked for an alternative. I wanted to stay ahead of inflation and keep my salary goals on track. Instead of patiently accepting the knee-jerk reactions of fearful executives I took my career back under my control. 

I didn't go freelance, what I did was start promoting myself. I made sure all my resumes were up to date and all my career site accounts were accurate and exciting to read. I updated my resume even though I wasn't looking for a new job. I also started blogging and keeping a record of my accomplishments. 

When my employer would predictably announce that there would be no raises that year, I would start my job search engine. My mother taught me that those who switch careers were the ones who made more money and were more employable. In fact, at one of the companies she worked at changing companies was a well established career path. Employees would leave for a year or two and then return to a more senior position. 

Even if raises had been consistently given, they were only 3%. If I changed jobs I could negotiate at least a 5% raise and usually much more plus a bonus. So I made it a priority to interview for new jobs every year. My motivation has always been to place myself in a better strategic position and increase my yearly salary. Since I was looking for a job while I held one, I was able to push the negotiations in my favor. 

Looking for jobs while I was employed had the added benefit of letting me know what skills were in demand and what skills I needed to improve. Every interview was a free career coaching session. The added benefit was that the coach had to decided if I was worth it. A rejection was hard on me emotionally, but it told me exactly what skills I needed to learn or improve.

Whenever I received an offer I would compare it to my current situation. I would compare salary, benefits, vacation and bonuses. Then I would take the differences and if I was getting less in one area I would ask to make up the difference with an increase in yearly salary. This worked well and I always got an offer I was happy to accept, but it didn't produce the massive raises I negotiate now.

As an engineer I see numbers and compare numbers. What I was missing was value. It is a subtle shift in mindset. Value is a fuzzy concept that changes depending on who is determining the value. If I find a company that places a high value on my skills, then I can negotiate salary based on the value and not a simple percentage above what I currently make. Now when I negotiate my salaries I don’t say what I currently make or if I do I make it clear that I won’t accept a small increase.

During the interview I ask questions to determine how much value the company perceives I will bring. If I get the sense that it will be a great fit and the company is very profitable, then I know I can pursue a salary that is seemingly way out of my league. 

- Know your value and improve it.