The secrets of salary negotiations revealed

Buoyed by rising optimism about the United States economy, some workers in this country might be ready to stop hunkering down and start demanding the salary they deserve ‒ or not. PayScale’s latest Salary Survey of 31,000 United States employees from all ages and walks of life offers an interesting glimpse into the highly personal, and often secret experience of salary negotiation for everyone from CEOs to cashiers in over 20 industries.

Here are some of the more (and less) surprising findings:

• It might not hurt to wait. Although 57 percent of respondents have never asked for a raise in their current field, 38 percent said it was because their employer gave them one before they asked.

• The rich are getting richer. Seventy percent of people earning more than $150,000 received their requested raise, while only 25 percent of those earning between $10,000 and $20,000 received the raise they asked for.

• Men have the advantage. Women are more likely than men to be uncomfortable negotiating salary, regardless of level or age. Twenty-six percent of female chief executives said they’re uncomfortable negotiating compared to 14 percent of male chief executives. Further down the ladder, women holding an MBA degree seem to be struggling the most with potential gender bias when it comes to salary negotiation. Only 48 percent received their requested raise, and 21 percent received no raise at all after requesting one compared to 10 percent of male MBA graduates. This finding also cuts across ages. Gen Y females, (people born between 1982 and 2002), were most likely to say that they do not negotiate for raises because they are afraid of being seen as pushy (35 percent). Only 25 percent of Gen Y males said the same.

• Be happy, earn more. Workers with low job satisfaction are more likely to ask for a raise (54 percent) than those with high job satisfaction (41 percent). However, only 19 percent of people with low job satisfaction receive the amount they asked for while 44 percent of workers with high job satisfaction receive the amount they requested.

• Some are shackled by experience. Less experienced, younger Gen Y respondents are less likely to have asked for a raise. However, so are baby boomers (people born between 1945 to 1964) who may be likelier to shy away from asking for a raise for fear of losing their job.

Employees may have more options than they realize. I talked with Lydia Frank, Director of Editorial and Marketing at PayScale, who advised employees to focus on the facts. “Raises are data-driven. You’ll be in a better negotiating position if you have an understanding of what your position is worth based on what you know are appropriate salary ranges for your job. Stay focused on your contribution; nobody gives a raise because you need it. They give one because you’ve earned it.”

Frank also thinks timing is everything. If business is on the upswing, raises may be in the offing. However, she’s quick to point out that wages haven’t kept up with the pace of inflation. “Factoring in inflation, our current numbers from the last quarter show U.S. wages have decreased eight percent since 2006. Workers have to ask themselves if the raise offered is ahead of the inflation rate.”

As for the gender biases that the report uncovered, Frank said, “We hope this data helps highlight issues that both sides – employees and companies – need to be aware of.”

Although this latest report may raise more questions than provide answers, it also could open the doors to more transparent discussions between workers and employers. It may even improve employee engagement which is all-important to attracting and keeping the top talent companies need for growth and innovation.

This article is published in collaboration with SAP Community Network. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Susan Galer is a Communications Director at SAP.

Image: U.S. dollar notes are seen in this picture illustration taken at the Bank of Taiwan in Taipei November 11, 2010. REUTERS/Nicky Loh.