How to ace your work negotiations

Estimated reading time
 5 min

In this article

• The importance of negotiation and how it affects your finances
• Negotiating tips for three different work scenarios

Negotiation is a big part of our lives – at work, at home and when we’re out and about.

The secret to negotiating is working out what you can offer the other party in exchange for what you want. Once you’ve figured that out, the next step is delivering your argument while navigating how the conversation plays out before sealing the deal.

Why are negotiating skills important?

Negotiating at work is important for many reasons. It can help you resolve any workplace conflicts that might occur and help you progress your career.

But it can also help you get a good contract, which can have a ripple effect on your personal and financial goals. For example, negotiating a higher salary will directly impact your finances, so you might update your budget or re-evaluate your savings goals. And if you negotiate to work from home more often, you could choose to put the money you would’ve spent on petrol or public transport into your savings.

That’s why we’re taking you through three scenarios to help you ace your negotiations and get what you want while supporting your financial goals – let’s go.

How to negotiate a salary

One of the most important conversations you’ll have when starting a new job is about your salary. This is how to feel confident when giving your asking price:

• Know your value: Look back on your experience and skills to see what you’re bringing to the table. For example, someone applying for a director role with decades of experience might ask for a sizeable amount in a new role. Or if you’re switching industries and have a unique set of skills that can fill gaps, sell that angle to increase your worth.
• Come armed with the facts: Do your research on industry standards to get a ballpark salary range you can use as a starting point. From there, explain why you deserve what you’re asking for – like listing your experience, skills or your unique perspective. You can also mention any big projects you’ve delivered that have shown off your skills.
• Shoot for the moon so you’ll land on the stars: Come in with a number or range that’s higher that what you’re actually willing to settle for. This can help give you a buffer, but also manage your expectations if you settle on a lower figure.
• Set your boundaries: While you might not get exactly what you want, it’s important you know your salary boundaries. Go in knowing what you’re ready to compromise on and be confident in holding your ground on the things you’re not.

  Bonus tip: Avoid the anchoring bias

In your first interview, the potential employer makes you an offer of $75,000 per year, even though the industry standard is from $90,000. As you have more interviews, that initial figure sticks in your mind and becomes the comparison point for other offers – $80,000 seems reasonable as it’s slightly more than what the first company offered, but $90,000 is just too much.

This is what we call the anchoring bias, where we latch onto the first piece of information that’s given to us and use it as a comparison point for information we receive afterwards. The anchoring bias can make it harder to negotiate your initial salary, which is why it’s important you research market rates and come in with a salary that’s industry standard and reflects your experience. Your bank account will be thanking you if you get the job.

How to negotiate a pay rise

If you’ve been in your workplace for some time, putting in the hard yards and getting results, then it might be time for a pay rise. Here’s how you can navigate this conversation and nail your pay rise request:

• Gather your evidence and be prepared: Reflect on the last six to twelve months and collect evidence of your achievements, like exceeding certain KPIs or leading a certain number of projects. Having the hard facts about your impact can boost your chances of a pay rise.
• Research market rates: Know the standard salary for someone in your role and with your level of experience in your industry. This can help you come up with an ideal salary range to put forward when it comes to the negotiation.
• Choose your timing: It’ could be helpful to bring up a salary increase when the company is doing well, like seeing an increase in sales, rather than when it’s doing not-so-well. You should also lock in a meeting with your boss or manager with plenty of warning and let them know what you’re there to discuss.
• Keep it professional: Use your previous experience and future potential as bargaining chips, rather than bringing up your personal circumstances. For example, don’t lead with ‘I’m about to be a parent and I need extra money’. Instead, lead with your achievements at the workplace over the last few months and go from there.
• Aim for a mutually beneficial outcome: You’ll want to walk out with a win-win solution. If you only get a slight increase because it’s within the company’s budget, then you could consider asking for other benefits, like having a designated parking spot.

How to negotiate for better working conditions

Sometimes, a workplace can be just okay. But negotiating for a few adjustments, like more work from home days, can easily make it pretty great. This is how to negotiate for better work conditions:

• Identify what’s important for you: Narrow down what you need to make your working and personal life better and why. For example, if your child’s daycare closes at 6pm but it takes you at least an hour to get home on public transport, then working from home will allow you to work up until 5:45pm instead leaving the office before 5pm. When negotiating work from home or other ways to make work better, highlight the value this will have for the business and your personal life to your manager.
• Understand your rights: Some industries might have standards or laws in place you can refer to when asking for what you want.
• Give your boss or manager a head’s up: Contact your boss or manager to let them know what you want to talk and outline what you’d like to discuss so they’re just as prepared as you are.
• Think about how they’ll respond: Try to predict any feedback (good or bad) your boss or manager may have. This can help you come up with responses ahead of time, so you can be confident in your rebuttals.
• Summarise and follow up: Recap your conversation in an email after the meeting so you have a paper trail to refer to.

Read more about different types of contracts