Salary Negotiation: The Fastest Way To Gain (Or Lose) Money As A PhD
When I was offered my first industry job, I was a bag mixed of emotions. I was desperate, relieved, happy, and worried – all at the same time.
But the emotion that won out was desperation. I wanted/needed that job so badly that I enthusiastically declared ‘I’ll take it!’ when my new employer shared their conditional offer.
What I didn’t realize was how this was going to impact my earning potential – not just now, but for years (even decades!) to come.
There’s a reason it’s considered a conditional offer. That’s because employers expect you to negotiate.
As one Cheeky Scientist member recently shared:
“I just heard from HR. All the obsessive studying of negotiation strategy and tips paid off.
I ended up with total 10k above their initial offer at a great company.
After reiterating my experience with my open ended ask, I heard back from HR saying they could increase my salary by 5K.
I said I would consider the offer as a whole. I deflected by using the ” I have to discuss it with family”.
Finally, HR sent me a new offer for another 5k above the previous offer and also accepted a later start date so I can do a family trip.
I am so happy that I negotiated and held my nerve.
My advice to everyone is NEGOTIATE! Thanks to you all for your support!”
How To Overcome A Poor Academic Mindset So You Can Negotiate
For PhDs that’ve spent the majority of their career in academia, negotiating for a higher salary is alien territory.
And yes, talking income is uncomfortable for even the most confident job candidates, but it’s especially challenging for PhDs that haven’t had to think about their value in terms of money.
But the stats speak for themselves.
For one, 70% of hiring managers expect a salary and benefits negotiation when they make a job offer. And for those that do negotiate, 87% of professionals aged 25 to 35 years get exactly what they ask for.
Yet sadly, only 36% of job candidates even attempt to negotiate for a higher salary.
So, when it comes time to navigate money talk, remind yourself of your value.
Negotiating will not only increase your perceived value (i.e., how valuable employers think you are), but it will establish your earning potential for the remainder of your career.
Which is why I want to give you a bird’s-eye view of the negotiation process and share the must-knows you need to maximize your earning potential for years to come.
4 Tenants Of A Salary Negotiation And Why It Must Be Win-Win
1. The industry job search workflow (and where negotiations come into play)
When you imagine creating a job search strategy, what do you envision happening first? If you’re like most PhDs, you probably think that a job search starts with writing your resume.
But that’s not it at all.
The job search strategy you learned in academia is backwards.
An effective industry job search starts with networking – connecting with people that have jobs you want working at companies you want to work for.
This is where you should be spending most of your time. Not writing the perfect industry resume.
Your professional relationships are what will land you a job, not a few sheets of paper that are never going to be read by a hiring manager who doesn’t know you.
Once you’ve gained a rapport with people in your network, had a few informational interviews, and have procured a referral, then you can start to worry about applying for jobs and writing your resume.
And if everything goes well, then you start to prepare for your interview(s).
This is when you need to start thinking about salary negotiations.
It may seem like negotiating a starting salary is the least of your problems; however, it’s important to start mentally preparing for this inevitable step.
In the grand scheme of things, negotiating your starting salary takes up the least amount of time – but it has some of the biggest impacts on your career.
2. A salary negotiation from the employer’s perspective
As a job candidate, your first point of contact with a company may be the first messages you exchange with an employee.
However, from the employer’s perspective, your first point of contact is the initial phone screen, when they receive your resume through an internal referral, or when they’ve discussed your candidacy with a recruiter.
No matter the case, realize that the employer is assessing your value (monetarily and otherwise) from the moment they have contact with you.
Many PhDs mistakenly think that negotiations are left for the end of the hiring process – after an initial offer is provided by the employer.
But, from the employer’s perspective, negotiations are happening throughout the entire interview process.
Right from the very first conversation.
In fact, many employers will ask outright about your salary expectations in the first phone screen.
Don’t fall for this.
You should never provide the first numbers – nor should you agree to a verbal offer.
I’ll discuss the appropriate response to such questions later, but for now, just realize that employers are thinking in terms of money from the start.
3. The many reasons why you should be negotiating for a higher starting salary.
Employers expect you to negotiate. In fact, if you eagerly accept their first offer, that’s going to raise their suspicions.
They’ll start to wonder if you’re qualified for the position, considering you value yourself so little.
Sadly, almost 90% of PhDs fail to negotiate their starting salary – and on average, this results in $17,000 less in starting salary.
Which means some of the most valuable and experienced people on the job market are not getting paid what they’re worth.
When it comes to salary, knowledge is actually a curse.
PhDs that fail to negotiate do so because they know, in the grand scheme of things, they have so much more to learn; and that there’s always room for improvement.
But failing to negotiate not only hurts your starting salary – it also damages your entire career trajectory. Even if you change positions or companies, what you made in the past will impact what you make in the future.
Consider this example…
There are two job candidates – Sarah and Aditya. Both are offered positions starting at $45,000 annually. Aditya accepts the offer immediately while Sarah negotiates for $50,000 and a 4% raise every third year.
Obviously, Sarah has already come out on top.
Now, let’s look at Aditya’s and Sarah’s pay down the road. Both salaries are going to compound over time, but Sarah’s will compound at an accelerated rate.
After five years, the gap between Sarah’s and Aditya’s salary is $6,816 per year. After 45 years, the pay gap is $45, 616.
And that’s just per year.
According to the economist Linda Babcock of Carnegie Mellon University, not negotiating for a higher starting salary leaves anywhere from $1 million to $1.5 million on the table in lost lifetime earnings.
Let that sink in.
Just because this is your first job outside of academia, it doesn’t mean you can’t negotiate your salary. As a PhD, your skills and experience are valued in industry – use this to your advantage.
4. The art of negotiation
The first offer an employer puts on the table is called a conditional offer – it’s how it goes into their system.
That’s because they know that it’s not set in stone. Not only that, but the employer will want to do their due diligence – check references, do a background check, etc.
As I mentioned before, you never want to put down the first numbers. You also don’t want to immediately counteroffer.
Instead, lead with open-ended questions.
Say, “Thank you for the offer – I really appreciate it. I believe I can bring XYZ to the company, but the numbers don’t look quite right. What can we do to increase the salary?”
This way, you’re not allowing them to respond with a simple ‘yes’ or ‘no’; you’re asking what ‘we’ can do – which indicates that you’re a team player –and you’re reminding them of your value while also remaining polite and professional.
In most cases, this will result in a 5-10% increase in your starting salary.
Overall, a successful negotiation creates a win-win situation for both you and the employer.
PhDs are notoriously bad at negotiating a higher starting salary. And if you’re like many PhDs, you avoid negotiating altogether. But to maximize your earning potential, you need to learn this artform. To start, you need to understand what a negotiation looks like from a bird’s-eye view – where it comes into play in the job search process, how to recognize negotiation tactics, the impact of salary negotiations, and how to utilize the open-ended question to learn how much money is truly on the table. With a little practice and confidence, you will enjoy a salary that you deserve – not only now, but for the remainder of your career.
If you’re ready to start your transition into industry, you can apply to book a free Transition Call with our founder Isaiah Hankel, PhD or one of our Transition Specialists. Apply to book a Transition Call here.