Since leaving the Marine Corps, I’ve been on a mission to pass on the most important lessons learned from other veterans who have successfully made the transition. This is why I started SuccessVets.com, a transition resource site that helps service members with their careers and lives after the military. Some of the most frequent questions I get from the audience of my blog and podcast concern salary negotiation. That’s no surprise to me since this subject is left mostly uncovered by transition assistance counselors. But it should be something that veterans learn before entering the private sector. Beyond finding gainful employment after the military, negotiating your salary may have the biggest impact on earnings in your lifetime.
“Not negotiating…can be more costly than you think. In their paper ‘Who Asks and Who Receives in Salary Negotiation,’ researchers…found that employees who negotiated their salary boosted their annual pay on average of $5,000. According to the researchers, assuming a 5% average annual pay increase over a 40-year career, a 25-year-old who negotiated a starting salary of $55,000 will earn $634,000 more than a non-negotiator who accepted an initial offer of $50,000.”?- Camille Sweeney and Josh Gosfield in Fast Company, 2013
In the military, nobody has to negotiate their salary. Compensation is public information, so you can figure out what someone makes with a quick Internet search and some back-of-the-napkin calculations. In the private sector, however, getting paid fairly and adequately for what you do is something in which you can take some control. This can be nerve-wracking. For someone with no experience at this, it can feel like you’re in over your head, which is why many people convince themselves to trust their employers and leave their compensation up to the goodwill of others. On the other hand, being able to lay claim to what you deserve can be exhilarating. Unlike the military, you aren’t paid the same as everyone else in your peer group. You can demand, in a reasonable manner, for fair compensation for the outstanding work that you do.
Here’s what you what you need to know to negotiate your job offers effectively:
Getting Paid Fairly is Your Responsibility
There’s an assumption in the military that the organization will take care of you. In the private sector, the bottom line drives all incentives. While companies will pay more to attract and retain talented employees, they won’t go out of their way to give everyone a great offer. What they do is hedge their bets. Most employers budget flexibility into their contracts. If the employee accepts, great! The company just saved money. Don’t let your employer get you at a discount. Be sure to confirm whether the offer is within the range of compensation of others in the same industry and position.
Do Your Homework
Employers will not be transparent with you. Salaries in the private sector aren’t usually public information. In a Salary.com study, over a quarter of the people surveyed did not know the industry standard for their position. I bet this is percentage is even higher if you poll recently transitioned service members. I can tell you I had no clue when I first got out. I just trusted the salary ranges on the job position postings. This ignorance is a critical mistake that can be easily corrected.
There are several sites like Payscale.com, Salary.com, Glassdoor.com, and Visadoor.com, that have collected salary information from various industries and positions. I would also recommend reaching out to people in the industry for informational interviews and to have a conversation about compensation, in general. Use this information to set your expectations and goals when you do your job search. Also use it to check that the employer is offering a fair compensation package.
Communicate Your Value
Your ability to highlight the skills and experiences that you bring to a company has the most impact on negotiating better compensation according to a CareerBuilder survey. A company shouldn’t be paying you less “because you’re a veteran.” Doesn’t that sound crazy just reading it? They should pay you less if you don’t have the ability to fulfill what the job requires. The problem most companies have in hiring veterans isn’t that veterans aren’t skilled enough to do the job, it’s that employers don’t understand how those experiences translate to the private sector.
If the compensation being offered to you is lower than expected, it’s likely because you haven’t communicated how well you fill the company’s needs. Make sure that when you do talk about your accomplishments and capabilities you clearly associate which problems and job requirements those are fulfilling for your employer. Your military background can be difficult for a civilian to decipher, and the onus is on you to get them to understand where your skills fit. But once you do, you put yourself in the same “pay grade” as anyone else they would hire for the position. Don’t assume that the offer you get accounts for all the talent you bring.
Your Recruiter Will Not Do it For You
The only person who will truly want to negotiate your salary is you. If you, like many transitioning veterans, work with a recruiter to get your job, you might assume that he will work to get you your highest salary. It would be reasonable to assume this, since many times, the recruiter’s commission is based on the salary you receive from the employer. But the incentives for recruiters to get the highest possible offer for you are not aligned with yours.
The authors of the book Freakonomics detail a similar relationship between home owners and their real estate agents. Studies showed that real estate agents, on average, accepted lower offers for their clients compared to when agents sold their own properties. This is because the extra effort required for agents to sell someone else’s home does not result in a significant enough difference in commission to do so. After all, they only make a percentage of the deal. That extra effort isn’t worth it if they can make more by closing more deals. In no way am I saying that recruiters or real estate agents are being dishonest. But realize that you have much more at stake when it comes to negotiating a salary offer than the person working as your agent. If you have a recruiter as a buffer, you have to push him to get the best offer for you, or do the negotiating yourself.
Ask, and You Will Open Doors
Bad things don’t happen when you ask. But it does give the opportunity for good things to happen.
There is a lot of fear mongering over salary negotiation. I hear this argument a lot – “In this economy, you should work hard and prove invaluable to your company. Then you’ll get paid.” The problem with this line of thinking is that it ignores reality and research. Salary raises during your career fall in a very narrow range, usually 2-5%. Companies do this for a variety of reasons, including aligning their budgeting and accounting, maintaining pay differences for positions within the company, and knowing that most people are afraid to counter for more. Notice that none of these are based on paying someone for the value they bring to a company. On top of that, your future bonuses and job offers are often based on what you made previously. Negotiating your initial job offer makes the most difference in your long term earnings. What else does that statement get wrong? Well, as I mentioned before, most employers budget room into their initial offers, which means if you accepted, you would be getting paid less than you could. So make sure you ask, or you may be leaving money on the table. An employer may say no to your counter, but that’s the worst of it. Be professional and courteous in your dealings and your employer will treat you the same.
Provide a Solution to the Negotiation
Not all employers are willing to flex on salary. That doesn’t mean you are out of luck. Before your employer shuts down the negotiation, ask if they would compromise on other terms of your contract. That same CareerBuilder survey found that a majority of employers are open to offering flexible schedules, more vacation days, telecommuting, or even paying for mobile devices. Be creative! These little things can make a big difference to your quality of life and can move the negotiation forward if your employer balks on salary figures.
Confirm Everything in Writing
I may come off sounding paranoid, but don’t trust your future employer with abandon, even once you’ve finished negotiating. If you’ve come to an agreement with your employer, make sure to get confirmation of all terms in writing, even if it is only via e-mail. One friend of mine joined a company after his new boss promised him some bonuses throughout his first year at the company. Due to some quirk in the hiring process, this wasn’t documented in his original contract, but my friend was told that it would be added later on. Unfortunately, the hiring manager was let go from the company before this could happen. It took my friend another nine months of going back and forth with HR, showing them e-mails of these commitments, before he finally got those bonuses. I wouldn’t recommend starting a job until the contract is in place. If you go to work for the President of the United States or this is a once in a lifetime opportunity like that, I’d say fine, let it go. In all other situations, be wary.
Veterans shouldn’t be afraid to negotiate employment offers when they go from the public to private sector. After researching for nearly a year to put together a book on salary negotiation for veterans, I am confident that most would benefit and be successful in getting a higher salary if they put in the work to prepare. Like interviewing, networking, or putting together a resume, negotiation is a skill that you can develop. It could be the most important thing that isn’t taught when you are separating from the military.