What Is a Competitive Salary - And How To Negotiate One
Phrases like "competitive salary" and "competitive pay" are often used by employers in job listings, but they can leave candidates scratching their heads. So what do these phrases actually mean?
Competitive Salary Definition:
A salary that is at or above market rate for similar positions and geographical locations.
The Good News: While not quite as transparent as listing a number or a range, if the company has said that they pay a competitive salary, then you can assume that they intend to pay you at or above market rate.
The Bad News: "Competitive" can mean different things to different people. It can vary based on the local market, and with remote jobs, this only gets more confusing.
So, when you see these phrases, your first move should be to use resources like Glassdoor, Payscale, and Github to research the market rate for the role (I'll talk more about this later). Once you know the average salary for the position in whichever city you're based, you should expect the company to make an offer at or above that level.
If you get an offer and their competitive salary turns out not be as competitive as you expected, you can share your research and tell them you were expecting something a bit higher.
Remember, companies have access to the same resources you do - and many, many more! So they know very well what is "competitive" and what is not.
If they ask you what your salary expectations are, they are likely hoping that you are expecting less than market rate - or that at a minimum, you don't want much more than it. (If you need help answering the ever-tricky salary expectations question, check out these expert tips.)
So, the real question becomes, once a company does actually give you a number - whether or not they said upfront that they consider it to be competitive - what do you do if it's not?
You negotiate.
How To Negotiate a Competitive Salary
There's no doubt that salary negotiation can be uncomfortable - but if you don't ask for what you deserve, you'll never get it.
For women in particular, this can be challenging, because we've been conditioned to be agreeable, and to trust that we've been offered what we deserve. But companies don't want to pay you more than they have to, so you need to be your own advocate. No one else will. The men are asking for more, and you should too.
In these situations, it's crucial that you know your own worth - a modest account of your accomplishments won't get you to the number you deserve. (If you don't yet know the importance of valuing yourself, just check out this story about a designer who was underselling herself by 50k!!)
And if that's not enough to convince you to ask for what your worth, consider the fact that your negotiation today will not only impact your current role, but your entire career earnings trajectory (AND the trajectory of women to come after you, lateral to you, and across the industry).
With a little research, role-playing, and honest communication, you'll be ready to negotiate the salary you deserve.
1. Remind Yourself of Your Value
Have you self-assessed recently? Taking time to reflect on your achievements will help you evaluate your current worth and bring an undeniable strength to your interview. I find that muting the hustle and bustle by stepping into nature with paper and pen helps me to recognize my achievements. From there, my self-confidence and self-respect grows and I can start outlining a game plan to reach my desired salary.
I've achieved XYZ. Here is where I've seen success. Add numbers to back it up. Voilà.
2. Research the market.
First, investigate your field's competitive salaries online. Some of our current partners at PowerToFly use platforms like GitLab's Compensation Calculator to adjust their salaries based on the role, experience, and location. Resources like Payscale, Glassdoor, and Comparably are also great for checking salary ranges.
But don't just rely on the internet - ask 5 friends in similar roles/industries/locations what their compensation package looks like. DO NOT JUST ASK WOMEN! If you truly want to understand what a competitive salary is for your position, you need to understand what other people are making - this includes equity, benefits, bonuses, and other forms of compensation. Don't let the taboo topic of money keep you from earning your worth!
3. Watch how your favorite thought leaders present themselves and mimic them - practice makes perfect.
Research how some of your favorite thought-leaders and innovators present themselves in public so you can adopt some of their presentation skills. TedTalks are a good example. There's a reason these people are chosen as speakers - they have charisma! Have some fun and mimic your gurus as you practice presenting yourself and lead to your competitive salary ask. Now is the time to practice your ask word for word, citing why you deserve this compensation. Role-playing with friends and colleagues is crucial for practicing different scenarios and practicing authentic answers. Don't forget to ask for feedback!
4. Ask.
You've done your research. You know what the market rate is, what number you're looking for, and what your walkaway is. The worst that can happen is they say no.
Salary Negotiation Tips For Women: 10 Expert Tactics
The first time I was asked this question, I had no idea what to say. I just knew that what I'd been offered wasn't enough. Having relocated from the U.S. to Argentina just a month prior, I was still learning the market and was worried about having my offer rescinded if I asked for too much. Knowledge is power in a negotiation, and in my ignorance of local norms and rates, I found myself feeling powerless and frustrated.
The hiring manager seized on my silence and asked me another question: "What's the minimum you'd accept?" Not knowing how to stall for more time, I blurted out my actual minimum. He flashed a toothy grin and said, "Done." I knew then and there that I'd gone way too low - his smile said it all.
I broke two cardinal rules of negotiation that day:
1) Think about the number you want and ask for more
2) Know your value in the market
I went home kicking myself for flubbing the negotiation and not asking for what I really wanted/deserved.
Some research has shown that women are much less likely to negotiate salary than men; an oft-cited study of MBA grads from Carnegie Mellon showed that only 7% percent of women negotiated their initial salary offers as compared to 57% percent of men. Other more recent data has shown that women do now negotiate at the same rate as men. Either way, the reality remains that as women, we are often socialized to be agreeable (see point 2 below)... and negotiating feels like the opposite of people pleasing, so it can be tough to do. All the same, it's of vital importance that we keep having these conversations.
When we don't negotiate, what's holding us back?
- We (erroneously) believe that what we've been offered is what we deserve - Economist and negotiation expert Linda Babcock said it best, "Women tend to assume that they will be recognized and rewarded for working hard and doing a good job. Unlike men, they haven't been taught that they can ask for more."
- We've been socialized to be agreeable, and we face backlash when we aren't - As women, we're taught to go with the flow and please others. And for the first half of our lives -- in school and at home -- we're rewarded for this with good grades and encouraging words from our parents and teachers. But patting us on the back for being agreeable doesn't do us any favors once we enter the workplace, where the results-oriented culture means that if you don't speak up for yourself and make your achievements known, then no one else will. Unfortunately, when we do speak up for ourselves, we're often penalized for being too assertive.
Why is this a problem?
- Experts believe that women's reluctance to ask for more, and the double bind they face when they do, are major contributors to the persistence of the gender pay gap.
- Future salaries are largely dependent upon previous earnings, so what may only be a few thousand dollars annually when you're starting out quickly compounds with each raise, salary-based bonus, or job switch (when you're often asked how much you were making). Some experts estimate that women can lose as much as 1.5 million dollars over the course of their careers as a result of not asking.
Try these expert tactics to make sure you come out on top
Although gender stereotypes can contribute to our reluctance to negotiate, there's no reason to let them prevent us from going to the table.
At PowerToFly, we sat down with lawyer and negotiation expert Nicole Page to get the inside scoop on how women can gain the confidence to be their own advocates and come out on top of any negotiation. She's successfully helped hundreds of clients get better offers and was kind enough to share her wisdom.
Keep these tips handy so that the next time you're considering a job offer, you don't make the same mistakes I did.
----
Hungry for even more negotiation skills? Check out our full interview with Nicole here, as well as our more recent chat and learn with another lawyer and negotiation pro, Anica John, where she addresses how you can answer the dreaded, "What are your salary expectations?" question.
