I was out to lunch the other day with a close girlfriend and she was talking about how much she hated her job, but in the same breath expressed how she could not leave right now.
The reason? She said “she was making pretty good money.”
Being the curious person I am, I asked her what she was making. She paused and there was an awkward silence. I immediately let her off the hook.
She eventually reluctantly shared the amount with me, but this is pretty typical when you are talking about salary or money with anyone.
We have a deep uncomforted and shame around discussing our finances.
This could be because we are embarrassed by what we make or we think it’s so much more than the other person that we don’t want to brag.
This leads us to the problem that arises around this reluctance to discuss your finances with other people.
How can you know your value if you have no idea what others are being paid?
So many people have no idea what they are worth in the market. There is so much variance in wages from company to company.
I remember when a Director left our company only to be replaced by a woman who was named Vice President.
You would assume that the VP automatically made significantly more than the former Director. Wrong.
She came in with a $120k base salary, whereas the former Director was at $160k. She likely had no idea how much value she left on the table.
If you aren’t talking to your peers or colleagues at other companies openly about compensation, then how can you really know what you are worth in the market?
To make matters worse, how can you negotiate with any persuasion when you don’t know what you are worth in the market?
The truth is, most people do not feel confident to negotiate every chance they get.
According to salary.com only 44% people say they negotiate occasionally. 37% say they always negotiate.
We all know that women are notoriously known for not negotiating.
A study of the job and salary negotiations of graduating professional school students at Carnegie Mellon University found that the male students were eight times more likely to negotiate a larger starting salary than female students.
In part because women don’t negotiate compensation as often or as effectively, according to the Women in Management Report .
Where is this fear and reluctance coming from?
Many people who don’t negotiate hold the mindset: “I need the employer more than they need me.”
They feel that negotiating salary is petty and they worry about damaging the relationship or coming across as a greedy.
The willingness to negotiate comes down to 95% psychology.
Negotiation is about understanding your value and realizing they need you more than you need them.
Negotiating is not easy. For many people, it’s not at all pleasant. Most people know how much hinges on salary negotiations.
Failure to argue your self-worth often means leaving thousands of dollars on the table and could potentially cost you millions over the course of your life.
The best way to overcome this fear is to know your worth in the market with real data. Don’t be afraid to talk to your colleagues about money to get the data you need.
It’s in your employer’s best interest to keep this information a secret, but you lose all leverage when you go into these conversations blind.
Go in with a plan and an understanding of what is most important to the employer and how your skills and experience align with those priorities.
This makes your argument less personal and more centered around business value. Remember, this is business and you must focus on your own financial well being because no one else will.
Do you struggle to negotiate? Share your story with us in the comments.
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