Negotiating Salary for Start-up Employees and Employers

In a conversation with a  friend recently we both lamented the low-paying jobs we had accepted in our early 20s and the long-term influence those decisions had on everything from our confidence to our student loans. The truth is I had no idea how to negotiate my salary in my 20s and I don’t think my employers knew what they were doing, either.

In order to have satisfied employees and happy employers you have to find a balance. That tight rope between over- and under-payment is influenced by experience, industry, investors, projections and promises. Get on the same page and don’t get taken advantage of with these tips:

Know the Going Rate

Both the employee and the employer should start with a base knowledge of the market rate for the job to be done. This can be found by doing a little bit of internet research after a full description of the job is complete.

Employers, don’t pretend your positions are so vastly different from those at other companies that you can’t start by knowing market rate. Your creation of job descriptions will help you organize and prioritize.

Employees, ask as many questions as necessary to understand the job components so you can understand compensation.

Know Your Range

Once you have done a bit of research you should be able to establish a well-informed range for the position. This range needs to take into consideration expectations like duties, hours and stress as well as things like applicant experience or expertise. The employer and employee should both come to the table with a pre-established range and the goal to find happy ground in the overlapping dollar signs.

Understand Your Benefits

Compensation is not just about salary. Some companies make up for what they can’t provide in salary with other benefits. The basics – health insurance and PTO – are a good start. Other things like employee wellness programs, travel stipends, profit-sharing, bonuses, flexible schedules and other perks can make a big difference. A lot of employees are able to receive a slightly lower salary when they know they are also getting a lot of other perks. Employers can help offset their budget limitations with great programs.

Set an Expectation for Company Culture

Companies rarely tell applicants that they are going to be overworked, taken advantage of, required to perform menial tasks that have nothing to do with their job, or will be treated poorly by management. However, many companies make over-the-moon promises about employee appreciation and work-life balance that end up being un-realized. Both the potential employee and the employer have a duty to set reasonable boundaries. While this might not look like there is a direct link to pay, there is. A company that pays low needs to understand their are limits to what can be asked of employees. An employee that takes a job that pays them a lot more in salary in benefits, should also understand there are expectations of availability and dedication (within reason, of course). Hashing this out at the onset of employment will help keep everyone committed and free of burn out.

The Bottom Line

The bottom line is that there needs to be open, honest communication and a willingness to accept the inherent limitations of what is agreed upon. Don’t offer something you can’t back-up and don’t accept something you can’t live off of. That’s just a disaster waiting to happen. But, also stay away from greed and be humble. When you find your balance on the tight-rope, you’ll be able to relax and focus on the tasks in front of you.


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