When it comes to the often uncomfortable issue of negotiating a starting salary or a salary increase, it’s often a case of, as The Rolling Stones would say, “you can’t always get what you want”. However, according to negotiations and decision analysis expert, George Wu, the John P. and Lillian A. Gould professor of behavioural science at the University of Chicago Booth School of Business, there is often more on the table to be negotiated than straightforward financial compensation. Wu advises job candidates to, rather than focus just on base salary, assess the value of bonuses, extra paid holiday leave and flexible work schedules.
While fresh graduates usually have little room for negotiating their desired salary, Wu says that, for an individual just pushing off from the starting blocks in their career, a job with plenty of visibility in a fast-growing business sector can be worth more in terms of career development and recognition than haggling over a couple of thousand dollars. “I often advise people to think about what it is they want from a job and to focus on those areas as well as salary,” advises the professor, who explains that negotiating a salary can be stressful even though individuals, whether or not they realise it, negotiate every day with colleagues and family members.
Wu says that, with no clear recipe for negotiating a salary, individuals often experience pressure to put a value on what they believe their skills are worth, which requires an element of self-confidence. He adds that multiple research findings indicate that men generally cope with the situation better than women, who also face the disadvantage of societal expectations. These tend to deter women from demonstrating self-assured behaviour, an attribute which is seen as positive in a man but viewed as pushy and aggressive in a woman. “Women usually have to thread a much finer needle when it comes to negotiating salaries because assertive competence can be viewed as being too masculine compared to the expected conciliatory behaviour,” says Wu.
The professor adds that, while women tend to be better than men at building relationships, this can also lead to a reluctance to negotiate for fear of hurting the relationship they have built with their interviewer or potential employer. However, Wu stresses this doesn’t necessarily need to be the case. The professor cites Facebook’s chief operating officer, Sheryl Sandberg, a student of Wu’s when he taught at Harvard, who, having accepted an initial offer from Facebook boss Mark Zuckerberg, returned to the negotiating table when her husband pointed out that no man in her position would accept the first offer.
When they resumed their negotiations, Sandberg put it to Zuckerberg that, since he was hiring her in part for her negotiating skills, it would be a bad advertisement if she didn’t use them. It was a ploy that worked and resulted in Sandberg being offered a substantially improved “total rewards” package, including Facebook stock options. Wu says the Sandberg scenario underpins the concept that most employers are willing to negotiate to recruit or retain the employees they want and value.
Recognising that most people are not in a position to negotiate their salary from the same platform of strength as Sandberg, Wu says there are still steps that can be taken to facilitate positive outcomes. For example, before negotiating a salary or pay rise, make sure all the elements of the company’s total compensation package are understood. When comparing a salary offer with those of other companies, take each company’s total compensation package into account. At the same time, employees should keep in mind that salary discussions with a prospective or current employer are a negotiation, not an ultimatum.
With companies always looking for employees with the skills to add value to their businesses, Wu says negotiation skills can be viewed as a positive trait. Also, while negotiating a salary, individuals might feel they are being adversarial, but employers will consider salary negotiations as a normal part of the hiring or pay review process.
Meanwhile, when it comes to the inevitable question of being asked to provide a figure for expected salary or salary history to benchmark the pay that will be offered, Wu says there are several ways to deflect the direct question. For example, by saying “I have done my research and it sounds like the range of salaries for a similar position with my experience would land me in the [name the salary range]. Does that match what you would be willing to offer?” Or, “I’m not comfortable with the idea of anchoring this conversation to my current compensation. I believe that the value I can provide is the most important factor here”.
Wu suggests that when salary disclosure is on the negotiating menu, the best way to deal with the topic is to get it out there, but to quickly pivot the conversation to one of value. For instance, by replying: “I’m glad you asked the question about salary, because in addition to many of the superior benefits your company offers, is the way it values its employees and aligns compensation accordingly – not all organisations are so reputable”. Most importantly, Wu recommends when negotiating a salary, don’t lose sight of the fact that the most effective response is the response the individual feels the most comfortable with.
