How to Negotiate Your Salary If You're Underpaid, with Ramit Sethi

You want to take a different approach when it comes to negotiating your salary. If you find out that you are underpaid. Now, many people are being underpaid and they simply don't know it. So step one, find out if you're being underpaid. Use these three websites, payscale.com, salary.com and glassdoor.com go and find out exactly how much you should be being paid. You can triangulate it by your geography, by the type of company, in fact, even the company that you work at. And you can find out if you're being underpaid or not. Now, you will find that a lot of people are dramatically underpaid. Let me give you some examples of people. College graduates because they're stupid and don't know how to negotiate. Women, because they don't negotiate. And many, basically everyone. Everyone's underpaid if they're top performers. Average performers go to hell. Because you're a commodity, you can be traded in and out. That's how hiring managers think about it. But if you are a top performer, you can negotiate your salary on off into a huge salary increase. Now, here's how you do it. First of all, at a high level, you need to go in and make your boss aware that you're being underpaid. Now, chances are he already knows this, but you're going to do it anyway, and you're going to do it respectfully. You don't want to go into your boss and be like, hey, boss, this sucks. How come the numbers aren't correct? You're underpaying me. The first thing they do is they get defensive. So I'm going to show you how to do that respectfully. Then you want to marshal defenses. You want to show them how much you should be being paid. And then three, you want to end with a positive note saying, here's what I'd like and here's also what I'm going to do to increase my performance. These are the three steps. Okay? So step one, you walk into your boss's office, you set up a special meeting. You don't just do this on the lunch break. Set up a special meeting. You say, you know, I like to discuss my compensation. I've been having a great time working here. I feel like I'm really getting to help with the product development. And in fact, just in the last three weeks, we've made X, Y and Z contributions, and we are ahead of schedule to do the launch. So you're starting off with a very positive affect. You say, but one Thing that I like to discuss with you is my compensation. So it seems that I'm actually being underpaid. And here's what I've found. I pulled some numbers from different areas, salary.com, et cetera. And what I found is that for someone with my level of experience and in the role that I'm participating in, I should actually be paid about 15% more. Now, as I said, I really enjoy working here, and I'm looking forward to continuing working on this project. But we need to make some sort of adjustment so that there's a fair number for both of us here. What have I done there? I started off really positively. I love working here. Here are my accomplishments. Here's what I'm looking forward to doing. Then I said, well, I'd like to discuss compensation. It seems that not, you are a jackass, but it seems that I'm being underpaid. Somehow heaven and earth has conspired to somehow underpay me. It seems that I'm being underpaid. Here's the data. And I'd like to discuss a salary adjustment. Not, I'd like you to give me more money, because what does that make me do? It makes me hold onto my wallet. I'd like to discuss a salary adjustment. Okay, great. So what then? So you. Then you have to explain why you deserve it, and then you move on to the positive part of the compensation discussion. Say, so what you say now is, you know, I'd like to discuss a salary adjustment, and based on the numbers here, it looks like I should be paid approximately 15% more. Shut up. This is where you shut up. Now you let them talk. Too many novice negotiators continue running their mouth, and every additional word you use decreases your power. So be quiet and let them talk. And here's what likely they will say. They'll say something like, either, okay, well, we can discuss that. Great. In that case, you're off to the races, and you have a very good shot at that. Or they may counter with something like, well, you know, times are tough and the economy is tough. This is a very common tactic. Okay, here's the issue. Average performers accept that, and they're like, yeah, I understand the economy's tough. You know what a top performer says? They say something like this, well, I understand the economy is tough, but I've been making extraordinary contributions and I'd like to be compensated for right now, I'm not even being compensated at the average number of someone with my experience. Quiet. Throw it back to them. You see, Top performers play an entirely different game than everyone else. If you're not being compensated because of the economy, that's not your problem. That's the company's problem. They will find a way to pay you an additional 5, 6, $10,000 to a company that is nothing. It's a drop in the bucket. That's how top performers think. Because it's true. Average performers, they care about the company's finances, when really that's not their problem. It's the company's job to retain you. So now you're throwing it back and letting your boss handle it. Your boss will often say, well, I think we can make some sort of adjustment here. And then you discuss the details. Well, you know, according to the numbers, I'm being paid underpaid 15%. And in fact, if you look at the top range, I actually would be paid 25%. So what I'd like to discuss is an immediate adjustment to the average number. And then I'd like to discuss how to do an extraordinary job over the next six months to hit the top of that range. See what I did there? I said an immediate adjustment to the average rate, which probably is worth three to five thousand dollars to you instantly, at least. And then how can I get to the 9, 10, $15,000 raise? How do you do that? Because you're going to discuss the third part of the conversation, which is, what am I going to do to be an extraordinary candidate? So all of these things work together to help you get from being underpaid to being fairly paid or often lavishly paid. And this is how you can use these negotiation techniques to raise your salary starting in the next couple of weeks. Enjoy.