How to Build Bargaining Power to Increase Your Pay
Bargaining power is what you have if there's an oil field on fire and you're the only outfit capable of being on the scene to smother the flames tomorrow. Bargaining power is what you have if you wrote the year's hottest-selling business title, and now every company wants you as a speaker. You can name your price, because you're the one who can do the job.
Build bargaining power by smartly positioning yourself for the position and smartly negotiating for your compensation package. Here's how to do it:
1. Enter the Hiring Process Early
The sooner you enter the hiring process, the more bargaining power you can exert. A company rarely decides to seek out a new employee on the spur of the moment. Instead, they identify a need, consider solutions, and define a job-then post for it.
If you enter the hiring process before a company's started looking to fill a position, you won't meet much competition. And competition decreases bargaining power.
2. Take on a Short-Term Project
While you're holding informal discussions about the company's needs, you're in an excellent position to suggest that you take on a short-term project addressing a critical issue. If you do that project successfully, effectively, and on deadline, your bargaining power goes up.
Properly structured, such a project allows you to demonstrate the quality of your work; operate on the inside, where you'll get a full picture of the company's needs, and have a chance to suggest follow-up projects.
Managing a short-term project will also allow you to charge a daily rate that may be substantially more than what you'd earn doing similar work as a full-time employee, so that when the company does offer to bring you aboard, your frame of reference on salary-and theirs-is this daily rate, rather than the lower rate that might otherwise apply.
3. Know the Market
Researching industry standards for compensation will help you build bargaining power. If you know what others are paying, you can use this information if the company seems to be giving you a lowball offer. This way you can express surprise-tactfully-at the proposed salary and have the figures to back up your reaction.
4. Assess Your Bargaining Power Realistically
Just as you shouldn't underestimate your bargaining power (you don't want to shortchange yourself), it's important not to overestimate it. To overestimate is to court resentment and lead the employer to search for someone less troublesome. Your tactics throughout the hiring process should reflect, as accurately as you can assess it, your actual bargaining power.
5. Never Be the First to Name a Salary
If you name a figure in response to a question about your salary expectations, it could be well above what the employer had in mind, and your interviewer's thoughts will shift to another candidate. If the figure is too low, you'll be stuck with less than what the employer was planning to pay-and you may even come off as suddenly less qualified to boot.