FORGET THE WATCH— GIFT YOUR GRAD SOME NEGOTIATING SKILLS
Nice watches are great, but with the amount of student debt most kids are graduating college with—you'd be better off helping their negotiating skills.
While talking to Laura Shin of Forbes Magazine, Ramit Sethi, the New York Times bestselling author of I Will Teach You to Be Rich underscored the importance of negotiating salaries early on.
He had several great points, notably that "a single $5,000 raise in your 20s if you properly invest it, can be worth more than a million over the course of your career. And that’s just one raise. People who negotiate tend to negotiate over and over again.”
And of course if your kid gets an extra $5,000 at their first job, because they didn't just say "Yes, thank you" to their first salary offer— their paycheck is going to grow faster than their peers.
Each raise your grad gets is based on their previous salary, so over the course of their lifetime the overall earnings of kids who started negotiating will quickly outpace the salaries of people who never (or rarely negotiated), making it nearly impossible for the more timid folks to catch up financially.
JenNash Sharable: "Teach your kids financial negotiation early. It helps set them up for life!"
Sethi adds two other reasons: “If you are a top performer, then companies want to pay to recruit you. For new grads, (companies have) already spent $6,000 recruiting you, so they don’t want to lose you for a few thousand dollars more. And the third thing is, it sends a signal. Top performers negotiate and average performers don’t. If you are a top performer, then they expect you to negotiate” he continued in the Forbes interview.
Now should ever grad kick the negotiation door hard? Maybe not.
There are a couple cases when negotiations just aren't appropriate, or they're unlikely to be successful. The first case relates to structured jobs; think military, government or jobs at management consulting firms where they typically set the salaries.
And the second case where negotiation probably won't get your grad anywhere is in situations where no one can stand out or differentiate themselves. Think Starbucks, Target or other corporations with very set, flat pay structures.
Clearly it's important to encourage your grads to negotiate but here are the specifics they'll need to have under their belts so they can even get a chance to practice their negotiation skills.
#1. Do the research
Do they know what the position they're applying pays for at other companies?
Are they speaking to recruiters? So they know the correct salary ranges and can learn about new opportunities.
Have they networked with their university's alumni association? Networking is truly the key to work success in this economy.
#2. Stay ahead of the pack
Don't wait for graduation to get resumes out there. Start at the beginning of senior year. Companies set budgets in Q4 and also in Q1, why not have them thinking about including your candidate?
#3. Follow up
Too many grads send out resumes and never follow up. It's as though they're either too afraid to rock the boat, or they think they're magical unicorns for whom the gates of prosperity will automatically open.
Teach them to write follow up emails. In the negotiating kits I have here on this site, I include templates for all aspects of communication because you can't leave this important work to chance!
Now if they make it to the offer stage here's some solid guidance. Don't let your grad handle this solo. Work with them to practice how the money talks will go. Trust me, you'll both be glad you did. Here's you're cheat sheet:
1. Get an offer in writing.
2. Practice with your grad so they don't say "thank you" and leave the employer thinking everything is roses and wine.
3. Train your graduate to respond to any and all offers by asking for more time, so they can run the numbers and cross reference their research.
4. When your grad responds to the recruiter or employer, have them reach out via phone. The current reliance on text and emails isn't appropriate for negotiations. It's uncomfortable yes, but that's why you'll have practiced different responses and scenarios.
5. Referencing the research that they've done have your grad ask for several thousand more. Could be $2,000, 5000 or $10,000! Rely on the facts. Don't make stuff up.
6. If they get pushback find out what other compensation options are available. Could they get an extra week of vacation? A parking space? The ability to work remotely one day a week?
Lastly, remind your hopefully-soon-to-be employed graduate that employers expect them to negotiate.
It demonstrates their confidence, maturity level and most importantly their ability to negotiate. Plus it gives future employers a glimpse of how their prospective employee will handle themselves once employed.
Let me know if you found this helpful. Love to hear stories from the employment front-lines so email us at life@jen-nash.com or comment below.
*A study cited by Linda Babcock and Sara Laschever, authors of Women Don’t Ask