How to Understand Your Market Value, So You Know Exactly What to Ask For
If you experience anxiety while looking over your bank statement each month, you’re not alone. Money worries plague most professionals (especially those with student debt to pay back), yet only half of us are willing to ask for more compensation at work.
In fact, according to a survey SoFi conducted last July, more than 50% of young, college-educated professionals do not negotiate salary for new or existing jobs. That means half of us believe a pay increase is not worth the discomfort we might feel in approaching a salary negotiation. But long-term gains are definitely worth the initial test of nerves. Here’s why.
The Proof Is in the Paycheck
Let’s take Meg and Paige, for instance, each starting work at similar jobs in the same company when they’re 22. Both receive a starting salary of $75K, and each performs well for the company over a period of eight years.
Each year, the company offers a standard 3% raise to employees. Meg manages to negotiate increases of 2% more than that, realizing a 5% hike each year. Paige decides negotiating isn’t worth it, and receives just the 3% yearly salary bump year over year.
Based on the 2% difference between their annual increases, Meg is earning almost $5,000 more than Paige by her third year of employment. By year eight, Meg’s total earnings at the company trump Paige’s by nearly $50,000.
Just think about what can be done with Meg’s extra $50K! Remember, too, that Meg and Paige can still work approximately 32 more years, accruing a lifetime of rewards just by asking for a raise.
A little bit of negotiation now can make a big difference in your long-term earnings. The key is knowing how much you should ask for in salary negotiations.
Setting Your Target Salary
While it used to be considered taboo to discuss pay openly, times have changed—and smart negotiators have caught on.
While 49% of respondents in the survey dig into salary data using online platforms such as Glassdoor and PayScale, 63% who are making over $150K a year prefer to consult with others in their network, such as current and former colleagues.
The potential boon there? People close to your work situation might also be able to offer more accurate figures for your particular setting. Enlist the help of your former colleagues (and current colleagues, when appropriate) and those in your network as you set out to determine a target salary to fuel your negotiation fire.
Just remember: When broaching the salary subject with colleagues, keep the focus on yourself instead of asking directly about their earnings. Say you’re talking about house shopping, for instance. As everyone groans collectively about rising prices, bring up that you’re thinking of asking for a raise—“I’m hoping for an increase to somewhere between $92K and $94K. Does that sound about right to you?” Their responses should let you know if you’re aiming too high to too low for your company, and you won’t have to ask them to reveal what they earn directly.
After gleaning an idea of the salary norms, consider personal factors. Why should the company value you more in the future? Have you attended trainings or received certifications? More importantly, do you have plans for how you can use these new skills at work? If you’re unsure just how much more these accomplishments and ambitions could earn for you, a consultation with a professional career advisor can help bring you up to speed.
Whether you scour the web, phone a friend, or ask an expert, defining your market value—and then seeking it out—is well worth the investment. Both Meg and Paige did well at their jobs, but Meg ended up with a substantial stash more thanks to her tenacity and courage during review time.
In the same way you work hard day in and day out, always negotiate for higher salary offers and raises. If you ask for more, you’ll likely receive more. Go after it!