Knowledge is power. It's also one of the most important tools you have when negotiating your compensation plan after you receive a job offer. While there are many factors that come into play in the negotiation process -- benefits, perks and work-life balance -- salary is one of the trickiest things to get right, says Rick Gillis, job search expert, career strategist, consultant, and author.
What are you worth?
One of the most important things to understand is your worth in the current job market, says Gillis. That also means having an understanding of current market conditions and economic outlook, he says, regardless of your past compensation.
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"You have to understand and accept that the market rate may not be what you're currently making," Gillis says. "If you're making $100,000, for instance, but the economy has tanked in your area, then you're just not worth that much anymore, and you won't be able to command that much," he says.
Gillis says keeping up with the Bureau of Labor Statistics salary data is a great place to start, even though the data published can be anywhere from 30 to 45 days old.
Beyond knowing your current market value, Gillis says, communicating to your potential employer that you're aware of and accept the reality of the economic situation can help ease the negotiation process.
"Going into negotiations armed with this data says to the employer, 'I understand the current market and I'm willing to negotiate based on your rate,'" he says. But that understanding must go both ways, and compensation data can also help justify to an employer why you're worth the salary you've requested.
Selling your value
"Real-time market data on compensation is crucial because you can back up your assertions with fact," says Katie Bardaro, lead economist with compensation data and services provider PayScale.
"You can use that data to help sell yourself and your skills to the employer; hammer home why you are a good value for the money, and what skills and knowledge you will bring to the company," Bardaro says.
It's important to remember, too, that employers will begin negotiating at the bottom of their approved salary range and deliberately leave room for some negotiation, Bardaro says.
"If their offer matches what you've discovered in your own research, great. And if they can't meet your requirements, remember that there are many types of non-salary compensation to consider," Bardaro says.
Consider factors other than salary
"Whenever an offer is made, there's most likely a $5,000 to $10,000 'buffer' that you can get without the hiring manager or HR person having to get additional approval," says Gillis.
Besides the obvious benefit of gaining a higher salary, your negotiating skills and the respect you'll earn from standing your ground is a powerful thing, Gillis says.