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How to Negotiate an Hourly Rate

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Negotiating a wage rate on a new job can be intimidating. When an employer makes you an offer, it is easy to say, “Yes, I'll take it." But if you do, you will be limiting your income potential even years down the road because future raises will be based on a lower starting rate. Whether the job pays $10 per hour or $50 per hour, take the time to negotiate the best wage you can.

Preparing Your Position

Consider the negotiation process you are about to begin. The employer might offer you less than he can pay in order to allow room for negotiation. Likewise, you should ask for more than you are willing to settle for in order to have flexibility to make some concessions. Also, make sure you know how much the position is worth. The Bureau of Labor Statistics website offers average pay information on hundreds of jobs in the U.S. Visit its site to find out the average wages for workers in your position and in your geographic area. You can also call a headhunter to find out if she is willing to tell you how much you should ask for. Even if the headhunter is not representing you today, helping you will give him a higher-paid candidate for another position in the future.

When to Negotiate

If the hiring manager inquiries about your wage expectations early in the interview process, do not give a direct answer. You might ask for too much, which will be a turnoff for the manager, or too little which will limit your income potential. Instead reply, “I'd like to learn a little more about the responsibilities before we discuss income.” In the early interview stages the employer is evaluating you against other candidates and your bargaining power is limited. Once the employer decides he wants to hire you, your ability to negotiate increases significantly.

Negotiating Your Wage

When the employer is satisfied that you are the right person for the job, he will give you an offer. Initially it may be verbal or written, but either way, do not accept it immediately. If the offer exceeds your wildest dreams, reevaluate why you thought you were worth less. In the more likely event that the offer is close to what you want, but not quite there, counter by saying, “The job sounds like a perfect match for me, but based on my research, I think my skills and experience are worth $X an hour. " Wait for a response. Silence may be painful, but the first person who breaks the silence is likely to give in to the other. Most companies will negotiate. You must give them that opportunity.

If You Can't Get What You Want

If the employer refuses your request to pay you what you think you are worth, ask him about future pay increases. If he cannot give you the starting wage you wish, negotiate for a wage increase in 90 days, or whenever your probationary period ends. Ask about the frequency of evaluations and wage increases. If wage increases are few and far between, then your starting wage is more important, but if promotions come quickly you may want to concede a starting wage that is lower than you wanted. Be sure to get your pay plan in writing.


Thomas Metcalf has worked as an economist, stockbroker and technology salesman. A writer since 1997, he has written a monthly column for "Life Association News," authored several books and contributed to national publications such as the History Channel's "HISTORY Magazine." Metcalf holds a master's degree in economics from Tufts University.

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