When you get a new job, effective negotiation is critical. It not only establishes what you make, but it also sets the stage for your future earnings and career trajectory.

Let’s go over the basics…

Whether it’s your first job or your tenth, the rules for negotiating your salary remain the same.

The Most Important Rule: You Must Ask

The single most important rule in salary negotiation is simple: if you don’t ask for more, you won’t get more.

When you boil it down, the employment game is quite straightforward… Employers aim to minimize labor costs, and are structured – legally as well as culturally – to pay as little as possible.

Yes. You read that right… Corporations pay you as little as possible, and that is by design.

When employers set up compensation structures to minimize salaries; it’s like setting a baseline for an auction. They establish a starting price with the expectation that you will make a counteroffer. In fact, they are prepared for you to ask for more, but are also hoping that you won’t. Research shows that many people do not negotiate their salaries, despite the fact that most employers expect them to do so. [1]

Of course, savvy professionals will know the game and ask for more. But enough individuals fail to ask, which lets employers get away with paying below market rate. (A desirable corporate outcome to maximize shareholder value by minimizing labor costs.)

Therefore, failing to negotiate means leaving money on the table. You need to ask for more, reflexively, even when it’s your first job.

The Cost of Not Negotiating

By not negotiating, you leave substantial money on the table. On average, individuals who negotiate their salaries can expect to earn $5,000 more annually than those who don’t. [2]

Of course, over a career, this difference compounds significantly, highlighting the critical importance of negotiation from the very beginning. (Note: most employers will ask your current salary to determine your next. To learn the right way to handle such inquiries see Launch Your Career)

Understanding Leverage: The Foundation of Negotiation

Despite all the rhetoric about win-win negotiations in business, employment is not really business…

Sure, it’s in the context of business. But in practice, employment is much less about business and much more about capital-labor relations.

In this context, negotiating a salary is fundamentally a game about leverage.

Leverage is about power; it’s about getting people to bend to your will.

Keep in mind, most workers have very little power beyond their ability to walk away. Therefore, negotiating your salary as a worker is a considerable challenge, especially for a first job.

In order to come out on top, and get sizable jumps in salary, you need to learn how to build leverage into your particular negotiation discussion. There are many ways this can happen.

Typically, this comes from understanding your worth, the current market conditions, the specific needs of the employer, the opportunity costs they would incur if they did not hire you, and being prepared to walk away, especially in a way that hurts the employer (i.e. they sunk too much time in you to walk away, they don’t want their competition to have you, they made the plans that would require changes if they don’t hire you, they will lose money or clients if you don’t join, etc.)

When you have such leverage, you can have very productive salary negotiations. In fact, when our students get such leverage, we recommend they go beyond salary asks, and expand into legal protections such as exit contracts or stock options.

When you lack such leverage, however, your negotiations are more of a formality. Yes, they are still beneficial, but they can only get you what the employer has already budgeted for the role.

This is a crucial point to understand. Also, by no means is it insignificant…

Negotiating Without Leverage

Even when you lack leverage in a negotiation, it’s still worth going after as much as you can manage to get. Ask for what you want, just to see if your desired number is already within their budget. Perhaps it would be “no big deal” for them to give you the number you want.

More often than not, it is no big deal.

Remember: the number they initially offer you is almost never the amount they budgeted for the role. And your job, if you lack leverage, is to get the total budgeted amount for your role.

If you have leverage… That’s a completely different story, which we cover elsewhere.

Research and Preparation

Here are some specific tips about negotiation your first salary effectively.

Understand Your Market Value

Start by understanding your market value. This involves researching the typical salary range for your position, considering your location, industry, and the company’s size. Use resources like Glassdoor, PayScale, and LinkedIn Salary Insights which provide comprehensive salary information.

Or if you want a quick rough answer, just ask Google “what is the salary range for a [job title] in [your city]”.

Highlight Your Unique Skills

Differentiate yourself by emphasizing your unique skills and achievements. The Five Core Skills and Seven High Value Disciplines offer benchmarks to articulate your strengths. Speaking the Language of Value, allows you to stand out and be perceived as uniquely valuable, even indispensable.

Highlight internships, projects, or relevant coursework that demonstrate your readiness to contribute effectively to the company.

(Pro Tip: You do this highlighting by starting any communication related to a salary negotiation by listing your unique skills and qualifications. For instance, you don’t want to start an email asking for more money by simply saying “I think I should be paid X”. You start that email, by first articulating how you are “one of the only seven people in the world who know how to use this particular software package” followed by “therefore I think this position should be worth around X to Y”)

Timing and Approach

Timing your negotiation appropriately is crucial. Engage in salary discussions after you’ve received a job offer but before accepting it. This is when you have the most leverage.

Avoid discussing salary prematurely during the interview process, as this can weaken your negotiating position. In fact, avoid having any salary related discussions before you actually receive a job offer – this includes answering questions about your “salary expectations”; you don’t want to answer them and shoot your future negotiations in the foot. (See Launch Your Career for scripts to handle these conversations effectively)

Assertive Communication and Objective Data

Assertive, respectful communication is key. So is your usage of objective data to support your salary request.

Reference your market research and align it with the value you bring to the company. For instance, “Based on my research, the average salary for this position in our area is $X. Considering my experience with [specific skill or project], I believe a salary of $Y is appropriate.”

Don’t try to act confident, or hype yourself up for the conversation, as that tends to backfire.

Remember: competence creates confidence naturally. If you know what you’re talking about, you will automatically become confident. Gather real world data and present it using an assertive language structure in a professional, friendly tone. Don’t worry about how you will be perceived and you will automatically be perceived as a confident professional.

The Myth of Job Withdrawal

A common fear is that asking for more pay will lead to a job offer being withdrawn, especially for your first job. This fear is largely unfounded.

That being said, negotiating tactlessly can harm your relationship with your future boss or HR department. Approach the negotiation professionally, focusing on mutual benefit rather than demands.

Comprehensive Compensation

Keep in mind, salary is just one part of the total compensation package. Consider other benefits such as health insurance, retirement plans, bonuses, and paid time off. If the employer cannot meet your salary expectations, negotiating for additional benefits can enhance your overall compensation.

Try to maximize your salary first. If that doesn’t work, try to get other forms of compensation. If that doesn’t work either, you may want to plant the seeds of a future salary negotiation.

For instance, you can set up discussions for the future with an ask like the following: “I understand that you are not able to offer me $X today, and despite that, I’m still interested in this position. Would you be willing to revisit my compensation in 6 months, when you’ve seen the quality of my work and had more time to think?”

Formalize Agreements

Once an agreement is reached, ensure all details are confirmed in writing.

Again: ensure all details are confirmed in writing!

If it’s not written down, it’s not real.

This includes your salary, benefits, start date, and any other negotiated terms. A formal offer letter or contract protects both you and the employer, providing a clear reference if any discrepancies arise.

Conclusion

Negotiating your salary is a critical skill that benefits you throughout your career.

By understanding your market value, preparing thoroughly, and communicating assertively, you can secure a compensation package that is worth your time.

Keep in mind, effective negotiation is 100% about leverage. But that leverage is not cultivated or expressed alone. It requires preparation, practice, and patience to manifest.

In order to ensure your first step into the professional world is both rewarding and impactful, you need to have done your homework. Your salary is rarely the result of your negotiation, but it is the result of all the work you’ve done before going into that negotiation.

For further guidance, explore our comprehensive resources including specialized Courses and Publications.

And remember, in the modern corporate world, most professionals do not have any significant leverage, and as such, remain beholden to the whims of their employers.

The few that learn how to build and wield leverage, however, get to write their own ticket.