Negotiating can be very intimidating for most people, regardless of their professional experience. People often describe the process as uncomfortable and sometimes fear the perception of being pushy. However, reaching the point of negotiating compensation is a pivotal step when interviewing for a job.
I like to think of negotiating as an opportunity to discuss and demonstrate one’s value to the prospective employer. Keep in mind, even though your initial salary is just a starting point, it can significantly impact your financial trajectory going forward.
Recruiters say that only 25 percent of candidates negotiate initial job offers. Perhaps this is due to the uncomfortable perceptions many job seekers feel about negotiating their own compensation. However, 80 percent of employers say that, when candidates do negotiate, it makes a better impression than not (Lowenstein, 2012).
So how much money is being left on the table? One study found that the average gain from negotiating, from a single negotiation, is 2–4 percent. Over time, this can add up to an average of $2 million to $4 million during the course of a career (Lowenstein, 2012).
Creating and claiming value are two fundamental aspects of negotiation strategy that exist in tension with one another (Lax and Sebenius, 2006). In any negotiation, the parties must decide whether to be competitive, cooperative, or some of both.
As you might imagine, the best outcome for one party may not necessarily be the best for the other party. For example, if you want $100 more than offered, it may not be in the company’s best interest to increase the monetary compensation.
If both parties choose to prioritize their own preferred option, not what’s best for both parties, they will often both get the worst outcome. In this situation, if the company is unable to increase the money offered, you could ask for something else that they may have more flexibility around, such as another day of paid time off (PTO) or a four-day work schedule.
When value is created in negotiations, it’s often referred to as “enlarging the pie.” This can be done through a cooperative process known as interest-based bargaining, or joint gains (Lax and Sebenius, 2006). In this process, the parties find ways to increase the amount of benefit divided between both parties.
The main way to create value is to try to understand the interests of the other party: Why do they want what they want? By sharing information openly and communicating with one another, the parties work to find shared interests and create value or expand the pie.
Doing this makes it more likely that both sides will get something they want out of the negotiation, leading to a “win-win” solution, the ideal resolution.
According to the American Academy of Audiology 2019 Compensation and Benefits Survey, based on the responses, females make up 82 percent of the audiology workforce. However, according to the same survey, female audiologists are making about 85 percent of the average male audiologist’s salary (Academy Compensation and Benefits Survey, 2019).
For both women and men, earnings are substantially higher for those with higher levels of education (see FIGURE 1) (Cynthia and Ariane, 2016). In other words, with a higher degree comes a higher salary—which seems reasonable.
However, the gender wage gap exists at every level of education. Women with graduate degrees experience the widest wage ratio of 73 percent, earning more than $440 less per week than their male counterparts.
These data reinforce the fact that women cannot educate themselves out of a pay gap, whether they are represented equally in a profession or not. Increased education does raise overall earnings, but it does not eliminate the gender wage gap. In fact, the pay gap increases along with the degree earned.
Keeping this in mind, the collective we, regardless of our gender, are doing a disservice to ourselves, our colleagues, and our profession if we do not negotiate.
How to Negotiate?
Many negotiations over time have failed because the two parties didn’t understand each other.
“Place a higher priority on discovering what a win looks like for the other person,” says Harvey Robbins, author and business pyschologist.
When going into a negotiation, it’s imperative to not just choose an arbitrary number, but rather, to have an educated ask. It’s important to be able to justify your ask.
Start by looking up salary statistics specific to the region in which the practice is located. The U.S. Bureau of Labor Statistics has this information available at no cost.
Next, be sure you can provide an explanation of why you deserve this amount. Figure out what you can bring to the practice by researching their audiological services and needs and determine how you can add value.
Knowing your best alternative to negotiated agreement (BATNA) is critical to negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are (see FIGURE 2) (Lax and Sebenius, 2006).
Your BATNA can be a variety of things, including another job offer, living with a friend while you continue looking, going back to school, or joining the Peace Corps, etc.
You must identify this prior to the start of your negotiation so it isn’t affected by the offer. It’s important to note that your BATNA is not necessarily your ideal outcome, but the best you can do without the offer you’re considering.
Your reservation point (RP) is your bottom line, the lowest offer you’re willing to accept. If the offer is higher than this, you would accept. If the offer is worse, you would walk away (Lax and Sebenius, 2006).
This MUST be determined prior to beginning the negotiation to ensure the accepted amount supports your lifestyle. However, it’s important to be realistic when setting your RP, both in terms of what the market will bear and in terms of what personal expectations you are hoping your job will support (e.g., nice cars, etc.).
The bargaining zone (BZ) is the area in which an agreement will satisfy both negotiating parties (Lax and Sebenius, 2006). It’s important, when negotiating, to consider your range, but also consider the employer’s range. The overlap between these two is the BZ and is the only area where an agreement can take place.
Joint gains is a cooperative negotiating process that helps create value for both parties (Lax and Sebenius, 2006). One way to do this is by rephrasing questions.
Instead of turning down an offer because it doesn’t meet your requirements, try to rephrase your question to learn more about the company. This can help you come to an agreement in which both parties feel heard and neither feel taken advantage of.
For example, “I understand that working from home is against your company’s policy. When reviewing benefits from other similar companies, I’ve found other options such as four 10-hour shifts. Do you have flexibility regarding this option in lieu of working from home?”
According to Fisher et al (2011), you should consider the following negotiating tips:
Put yourself in their shoes. Try to see the negotiation from both perspectives. For example, “I understand that you don’t have a lot of flexibility in terms of my salary. Are there extra responsibilities that I can take on in order to provide more value?”
Don’t deduce their intentions from your fears. If you’re worried they’re going to feel angry or insulted, try to understand why you feel that way.
Don’t blame them for your problem. You have to be able to prove your value. Your asking salary should not be based off your loans, debt, desire for a new car, etc.
Be open and transparent with information, that can help earn trust, which can in turn lead to a better outcomes. Often times in negotiation, people look at the information they have as “leverage” or an advantage.
Have them participate so they can have a stake in the outcome. For example, ask if there are additional responsibilities you can take on in order to get your ask, or if there is a pathway to a promotion.
Make your proposals consistent with their values. Understand their perspective, especially when communicating with individuals from different generations, cultures, etc.
Put the problem before your answer to it. For example, asking for 20 days of paid time off instead of 15 would be putting the answer first. Instead, try to explain your reasoning. “It’s important for me to have work-life balance. I noticed you offer 15 days off a year. Would it be possible for me to get an additional five days per year?”
Look forward, not backward. Don’t assume the outcome of this negotiation based on your last negotiation.
Practicing and Planning
Prior to beginning a negotiation, be sure to do as much planning as possible. One way to do this is by using a preference sheet (see FIGURE 3) (Pinkley and Northcraft, 2000). This is a very helpful tool when considering multiple offers or even interviewing with multiple companies.
You may have to fill in some of the information later, as you get further in the application process. You could also create one before you have any offers/interviews to help you prioritize what’s most important to you, what’s acceptable to you, and more.
In the first column of a preference sheet, list the issues that are important to you or what you would negotiate. These can include a variety of things, such as attractiveness of the opportunity, start date, salary, paid time off (PTO), sign-on bonus, moving expenses, parental leave, etc.
There can be qualitative and/or quantitative measures and the preference sheet provides you with a way to quantify all these measures. Be sure to only include things that are important to you.
All the issues on your list will have two characteristics: the weight and the range. Weight is a numerical ranking you will create to represent how important each issue is to you relative to the others listed on your sheet. You want to give the issues that are most important to you more points, or weigh them more heavily relative to your less-important issues.
Keep in mind that your weighting only must go as low as your reservation point for each issue. For example, if the reservation point for your PTO is 20 days, you don’t need to provide weights for anything below. The range is calculated using the lowest and highest points that you’re willing to accept for each issue. The difference between these is the range.
A preference sheet gives you a visual representation of what your minimum acceptable offer is, in more terms than just salary, and allows you to add up various weights to figure out which offer is best.
Negotiations can be nerve-wracking, but spending a small amount of time preparing can pay large dividends in the end. By following the advice outlined in this article, you can reduce negotiation-related anxiety while increasing outcomes for both parties.
Furthermore, by negotiating your salary, you’re simultaneously increasing the salaries of those who follow in your footsteps. As former U.S. President John F. Kennedy once stated about the U.S. economy, “A rising tide lifts all boats.” It is equally true that the combined boats of all audiologists can rise whenever one of us negotiates.
Don’t stop here! For more ideas for better negotiating, many resources are available. Here are some of my favorites: Getting to Yes by Robert Fisher, William Ury, and Bruce Patton; Get Paid What You’re Worth by Robin L. Pinkley and Gregory B. Northcraft; and Women Don’t Ask by Linda Babcock.