The Lifelong Payback from Salary Negotiations

The next time you’re offered a job, immediately open salary negotiations by asking your hiring manager, “Is this salary negotiable?”

You should attempt to negotiate your salary even if your target job is in the public sector. Why? Because contrary to popular belief, salaries for federal jobs and other government organizations are frequently negotiable.

Even a modest negotiated increase may, over the course of your career, cumulatively total tens of thousands of dollars, or hundreds of thousands of dollars — or more.  That is an unbeatable ROI for just a few short minutes of negotiating.

An example of the ROI from successful salary negotiations: Suppose you add $5,000 per year to your salary through negotiations. Over the course of a 35-year career, this $5,000 annual increase would total an additional $175,000 ($35 X $5,000 = $175,000) of earnings.  

Your salary negotiations will probably continue to yield additional paybacks to you throughout your career climb. Why? Because as your career progresses, your income will likely be further boosted by future promotions and future annual cost-of-living increases.  Both of these types of salary increases — usually computed as a set percentage increase over current salary — would be higher than they otherwise would have been without your negotiated increases. 

But wait — there’s more!  The payback from your salary negotiations will probably not end when you retire; you’ll probably continue to receive a big ROI from your salary negotiations for the rest of your life.

Here’s why: Most retirees receive Social Security payments from retirement until death. These payments are based on a formula that heavily weights average monthly earnings. Therefore, by increasing your annual salary through negotiations, you will also increase your eventual Social Security payments. 

Most retirees from government jobs also receive retirement income from a government pension and from the government’s version of a 401(K) savings plan — both of which increase with increasing salary. (The savings plan for feds is called the “Thrift Savings Plan.”) Therefore, by increasing your salary through negotiations, you would — as a government retiree — also likely significantly boost your retirement income from your pension and savings.

So, if you are intimidated by salary negotiations, remind yourself that your quick negotiations may be the gift that keeps on giving — yielding big increases in your income for the rest of your life. 

Federal Career Coach Lily Whiteman is the author of the critically acclaimed book: “How to Land a Top-Paying Federal Job.” She provides workshops and one-on-one coaching on landing jobs and negotiating salaries. Lily’s practical, insider career advice is based on decades of experience as a federal executive and hiring manager. Lily’s website is SalaryNegotiator.net.

Photo by Andrea Piacquadio