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How negotiating salaries can earn you $1 million

Posting in Technology

New research suggests that negotiating salaries can earn you big money in the long run.

Over the course of your career, is it possible to rake in an extra $1 million by negotiating small salary increases?

In a recent case study, Salary.com documented the difference between two workers: Jim, starting at $45,000 -- and accepting a one percent rise every year -- and Jane, who starts at $50,000 and negotiates a four percent raise every three years.

After 45 years, the difference in their total lifetime earnings is $1,037,773.

"It's a theoretical scenario," says Abby Euler, general manager at Salary.com. "But it gives a very good idea of what some people could be leaving on the table."

In a recent survey conducted by the website, only 41 percent of workers push for a pay raise, even though 84 percent of companies expect their employees to request one. Now that the economic situation has improved from the 2008 recession, it might be a good time to renegotiate rates.

While some employees may fear irritating those higher-up or losing their jobs by attempting to negotiate, a survey conducted by the website said that no employers have fired or demoted staff for asking. However, Tim Sackett, president of HRU Technical Resources, says that companies often "condition" their staff to believe that negotiation is a waste of time.

While negotiating salary increases, employees should focus on the skills they bring to the table, rather than become defensive, emotional, or mention personal needs for extra money. Performance levels, career growth and what you offer a company are far more important than personal circumstances when asking for a raise.

"Make your manager as confident as possible in your abilities," Euler says, "So when your manager decides to put your case to his manager, it's a no brainer."

Via: MarketWatch

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Image credit: Flickr

— By on September 24, 2013, 8:34 PM PST

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure