A Quick Trick For Getting A Big Raise
Every time I’ve ever had a discussion about my salary, it never occurred to me to discuss anything but a round number, in the thousands, and preferably in the fives or tens of thousands. I recall a recent talk about a potential jump to another employer. We discussed numbers and they were all in denominations of five thousands. I stayed put, but in retrospect, I realize I felt locked into those big round numbers.
Now new research by professors at Columbia Business School suggests that we may be losing out by getting stuck on multiples of five and ten, instead of breaking our salary requests into less-common fractions. In fact, if you zero in on a more unusual request, say, for $94,500 instead of $95,000, you may get closer to your goal in the final negotiation.
Earlier this week, The Wall Street Journal reported on a paper by researchers at Columbia Business School who found that by staying away from round numbers, especially in your initial request, also known as the anchor number, you will be more likely to come out of the negotiation with a higher figure.
The Columbia researchers didn’t look at salary negotiations per se, but it makes sense to apply their conclusions. The more exacting you can be about your anchor number, the more a hiring manager or supervisor will think you’ve done your homework to come up with such a precise calculation. If you use a round number, it’s a way of telling your counter-negotiator that you don’t have specific knowledge of what the job entails and what the market will pay for your skills.
The lead author on the paper, Malia Mason, teaches a course in managerial negotiations. She told theJournal that she got the idea for the study after taking a cab in Prague and finding herself trying to figure out the fare with the driver, who wanted 1,000 korunas ($50), which she knew was arbitrary. “It made me think about how we use round numbers and what they convey about the state of our knowledge,” she told the Journal.
Mason set up several experiments to test her idea about arbitrariness . In one, she had 130 sets of people haggle over the price of a used car. Those who started with a round number wound up paying $2,963 more than those who gave a more exact number to start, who paid an average of $2,256 more than the initial offer.
Mason says the best strategy is to start with a high number that is not round, like $94,500. Apply that to a salary negotiation and a hiring manager may be inclined to talk you down to $93,000. That’s much better than if you asked for $95,000 and the person on the other side of the table wound up getting you down to $90,000. “We often think a higher anchor is the way to go,” Mason told the Journal. “But you risk upsetting people if you’re too extreme. We found that you could be less extreme if you were precise and still do better in the end.”
The best strategy: Start with a high number that is not extreme but that is also precise, hopefully based on numbers you’ve gleaned from research on sites like Glassdoor.com and Payscale. I just searched for my title, senior editor, on Glassdoor, and found some good, un-round numbers, like $118,000, $101,000 and $93,000. Glassdoor also helpfully has a column of “average starting salaries” at each company, and those are quite precise. At Conde Nast, the average for a senior editor is $98,733. At Houghton Mifflin Harcourt it’s $59,992. Those numbers are probably too granular even for Prof. Mason, but they are helpful in setting a benchmark based on research, like, say, $98,750 if you are applying for a senior editor job at Conde Nast.
I like Prof. Mason’s idea of proposing specific anchor numbers but in the salary context, I am reminded of what many coaches have said to me as I’ve written stories on the career beat: Don’t be the first one to name a number in a salary negotiation, especially if it’s for a new job. When asked how much you are currently making, say, “I make a competitive salary,” and how much you want to make, say, “I hope to make a competitive salary for this field.” Once the other person has named a number, you can come back with a higher figure. But Prof. Mason’s research suggests you shouldn’t name a number in the fives of thousands. Try a more specific figure and you’ll likely do much better. When it comes to raises, do the same. Try checking on the rate of inflation and adding it to you salary, plus whatever merit you think you deserve–say a bump of 10% or 15%. That will likely yield you a precise number and you will have substantive reasons behind it that can back up your request if you wind up negotiating further.
This article was taken from another site (see link below) and posted on this blog by Andre Rosa for educational purposes.