This is the first installment of our new series, a Q&A on negotiation! Ask our expert, She Negotiates co-founder Victoria Pynchon, your toughest negotiation questions, and get personalized advice right here!
Hi Victoria,
As my friends and I get older and wiser, we’re starting to realize that we didn’t negotiate early on in our careers and that we need to start getting comfortable with it and good at it.
My question is this: How you can negotiate when you don’t have any leverage—like when you’ve been at a company a while and you don’t have a competing offer to use as a bargaining chip? For example, when I got promoted a few years ago, I tried to make the case that I deserved more than the standard 5% pay increase for a promotion, and I was simply told “no.”
This also just happened to a co-worker of mine who took a new position with another division in the company. They gave her a figure, she tried to negotiate up from there, but they held firm to their original number. Is there something we’re missing? Or can you truly not get what you want unless you can actually threaten to walk away from the job or company?
Wanting to Stay (but Wanting More)
Dear Wanting to Stay,
Thank you so much for raising this question. It’s one I’m often asked—and also one I see a lot of bad advice given on in women’s publications.
I have good news for you, though. You do have negotiation power. There is a way to successfully ask for a raise, and you don’t have to threaten to walk away from your job to get it.
Because this is such a big topic, I’ll be answering your question in three segments over the course of this week, segments I hope you’ll read so that you (and others in a similar situation) can ask me clarifying questions as the week goes by.
Let’s start today with the most pressing question: Do you have “bargaining power?”
Walt Disney’s former general counsel once said that negotiation leverage belongs to the party who appears to be in the best position to walk away from a deal.
There are two key negotiation lessons embedded in this nugget of wisdom. The first is perception. If your employer believes you have the will and ability to walk away from your job—whether you actually do or not—you’re much more likely to get what you what you want or, at a minimum, more than you expected.
The second point has to do with your BATNA. BATNA is an acronym for the phrase “better alternative to a negotiated agreement.” If you know there’s a higher paying alternative to your current job, you can feel pretty comfortable negotiating a raise. And you actually don’t have to have a job offer in hand to use this knowledge to your benefit, nor do you have to threaten your employer with the prospect of losing you.
Your employer also has a BATNA. The moment you ask for a raise, it must weigh the costs of displeasing (or losing) you against the expense of keeping you.
The key to creating the appearance, and hence the reality, of bargaining power is knowing how much it would cost your employer to replace you, helping your employer understand your true market value, and asking for that value in a way that does not invite an irritable response.
Here’s the bottom line: You have bargaining power if you cannot be easily replaced. It’s as simple as that. Most women underestimate their value and exaggerate their employer’s ability to easily replace them. I’m wagering that you could not be easily replaced for some or all of the following reasons:
- You know your job inside and out.
- You have a boatload of institutional knowledge that permits you to do your job efficiently and effectively.
- Because the recession likely caused your employer to lay people off, you are working harder and longer than you did when you were hired.
- Because your company tightened its belt in ’08 or ’09 and is still easily spooked by the uncertainties in the economy, it hasn’t given its employees decent raises, increased benefits, or serious bonuses in the last four years.
- If your employer is doing as well as the average American company in 2012, its profits are up, its employees’ compensation is flat, and it hasn’t replaced laid off workers with new employees, keeping its labor expense lower than necessary.
- You’re a woman, so you’re making 20-30% less than your male colleagues who are doing similar, if not identical, work.
- You won’t really be asking for a raise, you’ll simply be asking for progress in the direction of wage parity with your male peers (but keep this reason to yourself because it tends to make people uncomfortable).
- There aren’t that many people with your education, training, and experience available on the job market. The highest unemployment rates right now are among the unskilled and unschooled—which is not your situation.
- Even if there were people with your education, training, and experience on the job market, finding them, hiring them, and acquainting them with company-wide and job-specific capabilities would certainly cost your employer more over the next several years than granting you the modest raise and additional benefits you deserve.
- Even if hiring an employee to replace you were to cost less than we’re imagining, your employer still has to worry that the new employee will not be as loyal, reliable, and easy to get along with as you are.
If just one or two of these assumptions apply to you, you have considerable bargaining power to seek a raise. The only question now is how best to deploy it. And that’s what we’ll cover on Wednesday.
Send your toughest negotiation questions to negotiation@thedailymuse.com, and we’ll answer them in an upcoming column! (We’ll keep you anonymous, of course!)
