There are many salary negotiation tips on the internet but none that actually provide a real life salary negotiation example. I successfully negotiated my salary twice in the past, one that led to a 25% increase in pay and another that led to a 15% increase in pay package.
The experience taught me the most valuable lesson ever. The lesson is that you never get paid what you deserve, you get paid what you negotiate. It doesn’t matter how much value you add to your company. What matters is what’s the market willing to pay for your labor and services.
Companies standardize their raises, not personalize them. Sure, there are different raises for a high performer versus a low performer. However, the difference is minimal. In my last company that I worked in, the yearly salary raises was somewhere between 2 – 4%, 7% if the employee performed particularly well.
The highest performers got 4% raises and the lowest performers got 2% raises. It’s not that much of a difference when you think about it. The highest performer typically provides more than 2% of an increase in value. However, companies don’t pay for that increase in value.
The classic strategy that companies use to keep their employee costs down is by standardizing the employees’ salaries. Don’t fall for it. Companies hate job hoppers but employees have no other option but to job hop if they want to be compensated fairly.
The “you get paid what you negotiate” was a difficult lesson to learn but I’m glad that I learned it through a real-life salary negotiation example that’s outlined below. It’s important to know the backstory so the conclusion of the negotiation makes much more sense by the end.
Real Life Salary Negotiation Example: Backstory
When I first graduated college, I joined a training program in which the company paid us to learn about the different lines of businesses that the company offers. After the program, the companies placed us into a business unit. The information that’s the most crucial detail in this salary negotiation example is that the starting salary to join the training program was below market.
Why is that information important? The company based our salary increases on our starting salary, not in a personalized way. Therefore, when the company placed me, I knew the company was underpaying me by 20 – 30%. Although my overall compensation actually increased by 63% when I got placed, I knew it was still below market.
My boss at the time assured me that there was nothing she could do and that she tried to fight with HR about it. She even apologized to me that she couldn’t do anything more. So I was thinking “ok, she did everything she could, the answer is still no, so the only way I’m going to be paid more is if I go to another company”.
Nope. That was completely incorrect.
She was using the classic negotiation strategy in which people get you to think that they are on your side. My boss’ boss took it one step further said he even fought with HR to increase my base pay by 6.7%, which was objectively a lot but still below market.
He made it seem like it was a huge struggle to even get the 6.7% raise from $52,500 to $56,000. While I’m sure it was a struggle, (many of my friends got a ~4% raise), I still didn’t buy that I was getting paid fairly. This is the backstory.
The Competing Offer
To continue my salary negotiation example, we move on to a competing offer. My work experience interested a recruiter and we started interviewing. The interview process was a bit long, with 6 months of interviews. I suspect they were doing early recruiting to field out what kind of candidates that they can get.
Their intention was to field out as many candidates until the bonus season was over so that they can make a decision then. Whatever their intent was, they ended up giving me an offer by the end. It was a good offer, with an increase in base salary from $56,000 to $80,000. However, what they didn’t tell me was what the bonus would be.
In hindsight, it was a HUGE mistake to accept a job offer without knowing what the bonus would be. However, I accepted anyway because I was tired of getting underpaid on my base salary.
The $80,000 base plus the $10,000 401k matching would at least equal the $56,000 base + $29,500 bonus + $3,400 401k match that I was getting paid, was my thought.
The bonus would just be the cherry on top. Although that is factually correct, I can’t believe that I did that. I’ll never make that mistake again. Also, to get the offer, I actually negotiated against myself and made the first mistake in my salary negotiation example. Here’s how.
They told me the salary range of what they were offering, between $70,000 – $90,000.
I didn’t want to be too greedy so I asked for $80,000 but with the caveat that they should give me their best offer. They ended up offering me exactly $80,000. I negotiated against myself. HUGE mistake. Companies will use every trick in the book to pay you the least amount of money that they possibly can.
Fortuitous Counter Offer
Before I go on any further on my salary negotiation example, can I ask for you to SMASH and DESTROY that social share button and post to your favorite social media for your friends to learn from the story? Your friends can learn from my mistakes so that they can be better at negotiating their pay as well!
I was your guys’ personal guinea pig so you don’t have to go through with something like this.
Anyway, now that the backstory is over, we can get to the meat of my salary negotiation example. After accepting the offer of $80,000 + $10,000 401k matching + an unknown bonus, I approached my boss and told her that I was leaving. That was mistake #2. I should NOT point blank told her that I was leaving.
What I should have done was approach my boss that I had this offer and if there was anything that she could do. By accepting so quickly, there was no turning back. I had no power.
I randomly asked my boss to talk. Then my boss enthusiastically said “sure!” While walking to the conference room, my boss said “I hope you’re not telling me you’re going to quit”. I replied “uhm…” When we sat down, my boss gave me compliments after compliments to get me to stay.
Then my boss questioned, “if we raise your pay… will that change your mind?” Ding ding ding. In 4 hours, my boss offered to increase my pay to $70,000 plus a $35,000 bonus potential (the target turned out to be closer to $33,000, but I was paid $38,000 at the end of it so I didn’t complain).
This lucky counter offer made all the difference in the world. I accepted.
Where the Salary Negotiation Example Got Interesting
Remember I told the new company to give me their best offer? After they blatantly ignored that request and offered the $80,000 that I suggested, they said these words that I will never forget.
They said “we can’t increase the offer. The salary we offered was already so high. It was so high that we even had to go to our parent company in Europe for approval.” The classic negotiation strategy of them pretending to be your friend. They made it seem like they pulled all the necessary strings to pay me as much as they could.
That turned out to be a total lie. When I told the new company about the counter offer, they tried everything to get me to still say yes without increasing the pay. They said “your company ONLY gave you an offer after you told them you were leaving”. “Well, a job shouldn’t be about the pay”.
They also questioned “well, why did you want to join our company in the first place?” To remind me that their company is so great and that the pay shouldn’t be a factor. In my salary negotiation example, they tried every dirty trick in the book to get me to work for them.
Without paying more for it.
After that initial chat, the new company called me randomly (without warning) and asked, “I just got done talking with the compensation committee, if we raise our offer to $90k, can I get a yes?” That was insulting.
Not only did they not have the offer in writing, they wanted me to give them a yes even before the offer. Plus they blindsided me. No time to consider it. Just a “you have no choice but to take it”. I immediately told them no.
Lessons to Learn from the Salary Negotiation Example
There are so many lessons to learn from my real life salary negotiation example. I was an awful salary negotiator back then but I’m better now. The lessons are below:
1) Don’t Negotiate Against Yourself
I wrote an entire post on why you shouldn’t be negotiating against yourself. You should never say the first number unless you are comfortable asking for the moon and are OK with them saying no.
Most people aren’t. It’s better for you to get the other side to say the number instead of you. Otherwise, you will always lose the negotiation. They key is to create a win-win scenario. There are definitely cases where a negotiation results in a win-lose.
Don’t say the first number. Never EVER say the first number. If they company doesn’t like that, it’s time to walk away. Doing no deal is better than doing a bad deal. If you say the first number and negotiate against yourself, you lose.
I learned this expensive lesson through my salary negotiation example so that you don’t have to learn the hard way.
2) Don’t Immediately Say You’re Leaving
The first rule is to never bring up the offer to your current company if you have no intention of leaving. Bluffing rarely works and the downsides are greater than the upsides. The second rule is to bring up the offer to your current company to see if they can beat or match the competing offer.
Never tell them straight up that you’re going to leave. Ask them if there’s any way they can increase the offer. I was so lucky because I told my boss I was leaving right before promotion seasons are going on, not after. Otherwise, even if they wanted to keep me, they couldn’t have kept me.
My life would be dramatically different had the timing not been right. Never ever immediately say you’re leaving even if you have every intention of leaving. Always approach them and ask if they can increase your compensation first.
You have no risk then.
In my salary negotiation example, I had every intention of leaving my then current company. I wasn’t bluffing. My boss saw and noticed that so she didn’t mess around in giving me a counter offer to get me to stay.
3) You Don’t Get Paid What You Deserve
You get what you negotiate. How much power you have matters more than the work you do in getting fair pay. The saying is that “life isn’t fair.” Before you immediately think “life should be fair,” think about why life isn’t fair.
The reason is because things happen based on the amount of power someone has. The reason why the wage / productivity gap will never close is because employees don’t have power in America. The number of unions are going down with no signs of an increase.
Therefore, employees will always be underpaid because every day, their power declines inch by inch. In my salary negotiation example, I had the power because I had multiple offers. The only time the two companies increased my pay was when I had more power.
That’s why life isn’t fair. What only matters is if you have power.
4) Companies WILL Lie to You to Get What They Want
The number one motive for every single company in America is figuring out how they can pay their employees the least amount of money without having them leave. That’s every HR person’s job. Yes, they have a set budget they work with. However, they will do and say anything in order to pay the least amount from the budget.
The new company I negotiated with assured me “we can’t go any higher, the salary we offered you is already so high. We even had to go to our parent company to get approval because we offered such a high salary”. Lo and behold, when I had a counter offer, suddenly they could increase my pay? Interesting.
Learn from my salary negotiation example. I didn’t think companies would go that far to pay the least amount they could pay but they will. They will lie and commit fraud against you if they think they can get away with it. I wish I could have legally punished them some way, some how for the fraud, but I can’t.
5) Accepting a Counter Offer is Perfectly Fine
When you type on Google, “should I accept a company counter offer?” Guess what the first search result is? It’s an article that details the reasons why you shouldn’t accept a counter offer. Guess who wrote that article? It shouldn’t come as a surprise that a recruiting firm writes articles like that.
Wow. That’s BS. It is messed up that recruiters lie to you like that. They just want to earn a commission from your job switch. They have no interest in your career development at all whatsoever.
I accepted my company’s counter offer and my life did not change in the slightest bit. My boss still treated me the same, I received an even higher bonus than expected, and more. I found out my boss did the exact same thing I did. Twice. Please don’t believe the BS that you shouldn’t accept a counter offer.
If my salary negotiation example taught you anything, it’s that counter offers are completely fine.
In fact, I specifically asked my boss if she thinks less of me that I sniffed out other offers. My boss replied, “no, you do what you have to do”.
Learn from Real Life Salary Negotiation Examples
Don’t read articles titled “10 salary negotiation tips” if the author never says they went through with one. The articles don’t give you the exact words that were spoken. They rarely have firsthand experience with salary negotiations.
The articles are just examples of a hypothetical and imaginary world that could happen. Not what actually did happen. They’re just looking to get rich from your clicks, attention, and time. Learn from people who’ve actually gone through a real world salary negotiation so that they can give real world salary negotiation examples.
Finally, the most important lesson is that you will not learn salary negotiation by reading how to negotiate. It’s a good way to arm yourself of what to expect. However, the real learning will come from experience. You have to actually go through negotiating to actually learn the lessons.
Before I negotiated my salary, I read a ton of negotiation books and they were incredibly helpful. I used so many tricks from the negotiation books. However, there wasn’t a single book that covered my specific salary negotiation.
None of the example conversations in the books came close to anything like what I experienced in the salary negotiation example above.
Learning from examples is a very good way to refine your negotiating skills. However, the best way to learn is to apply the principles and actually negotiate with a real life person with real life stakes. Even if you end up walking away by the end, practice by applying the lessons you learned here.
Without application, knowledge is almost meaningless. Remember that those who can’t do, teach. There’s nothing wrong with teachers. However, there’s nothing wrong with applying the lessons that you learned, either. Negotiation skills help you get out of more situations that you can count. It’s valuable.
I really appreciated this real life example. There’s a reason so many people job hop–you have to make the first move instead of waiting for the wage increase fairy to magically pay you a visit. Bravo!
Thank you for reading, IF! You absolutely have to. Just doing good work really isn’t enough, I don’t like it. You have to put yourself in a position where you have to deal with the conflict of interest.
Conflict resolution skills are absolutely valuable in negotiation.