How to Use Leverage for Salary Negotiations

So, you got your offer letter. Or maybe you’re in the process of interviewing for a job, and they’ve given you an idea of what type of salary to expect. Either way, it’s not really enough money – but how in the world do you negotiate?

Well… The first thing is leverage. This means anything you can leverage against them, whether real (like other offers) or imaginary (like future performance).

So let’s say that you get three offers for this amazing position – one at $75k/yr, another at $80k/yr, and another at $90k/yr. Which one do you pick? Well, leverage says that if they know that there are other options, they’ll be more likely to adjust their offer up.

How Does Leverage Work?

For leverage to work, it has to have a bit of truth behind it. If you just tell them that you have other offers out there “that is much better” without any specifics at all, or if you don’t make any attempt to hint towards this leverage thing – they may not believe you. If they know that your best offer is $90k/yr and that most companies pay around market rates for good talent, then the offer will come in somewhere between those two numbers ($75k/yr and $90k/yr).

It’s sort of like negotiating a price on a used car. Would you rather pay 40k for a car, or 30k? Well, if you’re buying from somebody who knows that they can’t get more than 25k on the lot – then you’d better believe that this person is going to leverage everything he can against you.

The Perils of Leverage

But leverage doesn’t always work! Sometimes it’s not an issue of money but rather timing. Let’s say that your current company has been in negotiations with some big companies, and while these negotiations have been going on, they’ve offered you a raise up to $5k/yr. You don’t want to leave them, but there’s this new recruiter who’s offering a salary increase of $9k/yr instead.

If they think you’re willing to leave, then they’ll only offer the bare minimum. It’s possible that leverage could work here, too – but it’d be a lot easier if you could convince them that there was no chance of losing you.

TIP – Don’t waste your time with negotiations that have no room for negotiation at all!.

Topics to Leverage for Salary Negotiation:

  • Your resume
  • Your previous work experience
  • What other companies would pay you or have offered you
  • The demand for your specific job
  • Quality of person you are and hire
  • Use recommendation letter points to showcase what you have meant to other companies or bosses.
  • Your current or past salary
  • Knowledge of the job
  • Potential for the company when they hire you

With salary negotiations, if you are willing, kind, and respectful to the hiring manager, your desire for a certain number will come across appropriately. Practice negotiating your salary and some possible responses prior to the interview. Know your worth!

Hopefully, you didn’t anger the hiring manager, but just in case you might want to consider sending a thank-you note.