This post is from staff writer April Dykman.

One of my goals for GRS in 2012 is to write more about earning money.

I quit my job a year-and-a-half ago to become self-employed, but I know that most people are employees, and I’m the last person who would suggest that everyone should quit their jobs and become full-time freelancers. For one thing, it’s not right for everyone. It can be lonely, and it doesn’t come with medical benefits, which some people need, especially those who can’t get individual insurance at a reasonable cost. Depending on your career, it might not even be possible (never heard of a self-employed police officer, for example). And some people want to put in their time and leave work at work at 5 p.m., or just plain enjoy their job.

There are a lot of reasons why it makes more sense to be an employee, which is why I don’t plan to only write about starting a side business or freelancing (although I do plan to cover those topics), but also how employees can earn more at their current job and make savvy career moves.

A history of unsuccessful negotiation
I worked for one company or another from the time I was 17 until 2010. And one thing I never mastered, despite my sad attempts, was the art of negotiating salary. There was the job I took because I desperately wanted to work for this company with great benefits and “just be an editor” (not an editor and secretary and event planner and marketing coordinator and graphic designer…). They called, offered the job, and I said “yes” to all of it without even blinking. There was the job where I tried negotiating — I even researched how to negotiate and prepared facts and figures — but felt strong-armed into taking the amount offered.

In both cases I was scared they’d pass me over. I didn’t know what to say if they said “no”. I wondered if it was even possible to negotiate at either of these companies, or was it more that the common denominator here was me? So when I decided I wanted to write more about career strategy this year, I also knew I would need to bring in some experts. Obviously I’m not the best person to tell anyone how to negotiate their salary!

How the pros negotiate
Recently I spoke with Ramit Sethi of I Will Teach You To Be Rich (the blog and the book). When Ramit was studying at Stanford, he got a group of friends together who, like him, were interviewing at some of the world’s toughest companies — such as McKinsey, Google, and Goldman Sachs — and learned the intricacies of interviewing, negotiation, and writing effective résumés.

I interviewed him about some of the top mistakes people make when it comes to negotiating salary, and how to overcome your fears.

April: What is the biggest mistake people make when it comes to salary negotiations?
Ramit: They don’t negotiate at all. We concoct all kinds of reasons why — “The economy is terrible!” and “I’m just lucky to have a job,” and “They don’t have a budget this year,” but really, we don’t know if it will work because we rarely try. In our research of 20,000+ people, we found that most of us are afraid of negotiating for two reasons: We were never taught how, so we don’t know what to say, and we worry what will happen if they say “no.”

April: There was one job offer where I didn’t negotiate at all! I accepted their offer right away because, like you said, I was scared they’d rescind the offer or think I was being difficult. What’s one thing can we do to assuage our fear of negotiating?
Ramit: Practice relentlessly. I went from closing zero interviews to closing a double-digit percentage of interviews once I practiced — and practiced in the right way. First, practice in front of a mirror. Then, record yourself. Next, have a friend run a practice negotiation and videotape yourself. Most of us find this weird, but I find it weirder to leave literally millions of dollars on the table over your career because we don’t want to take a few hours to negotiate.

April: What are the gender and age differences when it comes to negotiating?
Ramit: The data is clear that women negotiate far less frequently than men, costing them tens of thousands of dollars in the short term and millions over the course of their careers. They also use subtle phrases that cost them thousands, like “I think” or “I’m not sure, but…” There are very subtle gender pressures in a negotiation, so it’s extremely important to practice and deconstruct any self-sabotaging verbal or body language tics that compromise your position. This can work well — my female students negotiate, on average, $10,000 in salary increases.

April: Wow. I use those phrases all of the time! But some negotiating tactics sound like they could be pretty uncomfortable if someone isn’t good at selling themselves. Does successful negotiation involve sales techniques or some kind of Jedi mind tricks?
Ramit: When I was younger, I had to get scholarships to pay my way through college. I ended up applying to 60-70 scholarships, and when I landed my first interviews, I kept losing again and again. I finally decided to videotape myself and I discovered a subtle tic — I wasn’t smiling! In my head, I was a friendly guy. On camera, I wasn’t coming across how I wanted to. Once I started smiling, I started getting scholarship after scholarship. Is that a Jedi mind trick? Or is it simply studying the process systematically? None of this is magic, but it does require some unconventional approaches.

April: At one of my companies, my boss was notorious for putting people off when it came to an answer about raises — is it worth “bugging” my boss? Do a few thousand dollars more make that much of a difference?
Ramit: Even one $5,000 raise — just one — can be worth $1 million over an entire career. And people who tend to negotiate a raise once tend to do so repeatedly.

Well, there you have it. It was me, not them. I was a young female using phrases like “I think” who was too fearful to ask for raises because I was always hearing about budget concerns and how we were lucky to have jobs. I was pretty textbook, and a lot of that could have been remedied if I had videotaped myself. It’s a powerful way to avoid common mistakes — such as not smiling or using weak phrases that undermine your efforts — and to gain confidence before you sit down with your boss.

If you’re interested in more on negotiation, Ramit is offering a free mini-course that includes tips on overcoming fears about negotiating; the three biggest interviewing mistakes; the exact words to use to get a raise; and more. Here’s a preview of what you can expect:



Do you negotiate your salary? If not, what has held you back?

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