Sometimes it’s necessary to write a salary negotiation letter to clarify your position and ask for higher pay or a raise. You need to negotiate your salary to make more money right now. It can be scary–especially in a tough economy, but do yourself a favor and make it happen! While we recommend you do as much negotiation as possible in person, over the phone, through a recruiter, or even an HR rep–a letter can be a powerful way to justify your request for more money.
What You’ll Lose If You DON’T Negotiate
A joint study by George Mason University and Temple University surveyed employees across many jobs and industries. People who chose to negotiate (rather than accepting the company’s first offer) got an average of $5,000 more in annual pay. And that starting salary builds on itself. Let’s give an example. Two people start a job at the same time, both getting offers of $50,000. One accepts the $50,000, and the other negotiates for an extra $5,000, bringing her salary up to $55,000. Now, if they both perform equally well and thus receive the same percentage raises throughout their careers, the one who negotiated the higher starting salary earns $600,000 more over a 40-year career.
That’s right: $600,000.
Now do you see why you MUST know how to negotiate?
Writing Your Salary Negotiation Letter
A well-crafted salary negotiation letter must do two things:
- Notify employers of your interest in a negotiating for higher pay and,
- Justify why you deserve it.
Note: the letter must also deliver one more critically important message, which we will reveal later in the article.
Choose your situation to get FREE sample salary negotiation letters and your strategy for how to negotiate.
New Job: Two Letters
Notifying the employer of your intent to negotiate typically requires a separate letter from the justification because you most likely lack a personal relationship with the hiring manager or HR rep. Formalizing the request is the best way to get the ball rolling. Once the employer has responded (either via an email or a call), you can begin the process of justifying your request. Like the figure above shows, you can make a lot more money by switching jobs and negotiating.
The power of your new job salary justification depends on how strong you will be in the job versus your competition and the strength of their job offer versus their competition.
Outshining your competition already happened because you received the offer, right? When asking for more money than offered, the shine can’t end there. You have to pound it into the employer’s mind that you are so superior to any other candidate that they would come across that you’re worth the extra money you requested.
Employers compete for the best talent. You ARE that talent so they want to hire you. Their offer has to be more than competitive—it has to be superior. If the quality of their offer is inferior to the market, then your justification for higher salary will be perceived as reasonable. Believe it or not, most of the time, employers don’t know how their offers stack up versus their competition.
Promotion: One Step
By initially having a verbal conversation with your manager about increasing your promotion salary, any letter you write would briefly mention your intent to negotiate while spending most of the time on justification.
The best salary negotiation letters leave no doubt that your past results are the best indicators of future performance in your new role. You think that already happened since you received the promotion, right? Not quite. Now you’re asking for more money, which means you must absolutely convince them that you’re worth more than they planned to pay you. If they don’t have that confidence, you won’t get the additional money.
Raise: One Step
Negotiating your raise will give your paycheck the extreme increase you want. By initially having a verbal conversation with your manager about a potential raise, any letter you write would briefly mention your intent to negotiate while spending most of the time on justification.
Justification for increasing raise salary hinges on convincing your employer that your past results will ensure superior performance in the future. You think that already happened since you received the raise, right? Not quite. Now you’re asking for more money, which means you must convince them that you’re worth more than they planned to give you.
The ultimate power in a salary negotiation is walking away. Companies spend thousands of dollars to get people in the seats to interview, or in the case of a raise or promotion, they don’t want to spend money on a replacement. If there’s a credible threat that you’ll walk away from the offer or leave your job, companies tend to negotiate. Here’s the secret no employer wants you to know:
It is cheaper to increase your salary than it is for them to search for new candidates.
Even though the economics are in your favor, subtlety in communicating credible threat is a must. You can’t give an ultimatum to an employer to meet your salary demand. You have to say that you’re willing to walk away from the offer, promotion or raise, without saying it.
Fortune favors the bold. Remember, people who negotiate make $500,000 more than those who don’t. I’ve helped thousands of people achieve their dreams through salary negotiation. Let me guide you through your process so you can make more money now and throughout your career.
Can you afford NOT to negotiate?
What to Do Next
Download our free sample negotiation letters to get you started. Click here (or click the image below) and answer 3 simple questions to get 3 FREE sample salary negotiation letters personalized to your situation. PayMe Salary Negotiation.