Negotiating your Salary

24th November 2016

A salary negotiation of £2000 a year now can make you £20k in 10 years. If you stick that extra cash into a investment like a cash ISA, you could double that. Simple math, but it isn’t that much harder to pull off with the right negotiating skills and a knowledge of how much you are worth.

Don’t let people tell you that the economy is tough. It is always tough, but you can capitalise on that by being a top performer and getting paid what a top performer deserves. A “tough economy” is not an excuse.

Do your research. Find out how much people in your industry earn at the level you are working at. For a company, paying an extra £2000 a year for an employee who is going to make them ten times that amount is a great deal, so your goal is to show them that you are worth more.

Don’t let your boss or prospective employer just offer you a salary without negotiating. If they ask you how much you expect to be paid (this happened to me once), a good rule of thumb is to go 20% higher than you feel comfortable asking for. I want £60k, but I ask for £72k and they come down to £65k – I’ve just made £5 more than I would be comfortable accepting!

If you’re going to your boss asking for a raise, you’ll want to have a few ducks in a row beforehand:

  • Know how much other companies are offering for the same work.
  • Show that you have taken on more responsibility and done a better job for the company than they could expect.
  • Don’t accept a six-month review, you need to put a tiny bit of fear into your boss that shows that you are a top performer who has value to the company at a higher pay rate.

For some useful videos and strategies, check out Ramit Sethi’s guide to negotiating your salary here.

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