Thursday, February 7, 2008

My 2%

Does it really make a difference to negotiate your starting salary? Yes, it can since your raises can be calculated by the percentage of salary that you are currently making. Let's look at the example below where Candidate A accepted the minimum and Candidate B negotiated two steps higher for her initial salary.

(These numbers are from the Librarian Salary Scale at the University of Alberta)

You're looking at this table and thinking: really, there is only $1,849 between the two salaries. And I thought I was bad at math. You need to look at the difference over time: over five years, Candidate B makes $8,896 more than Candidate A. It also takes Candidate A two years to surpass Candidate B's initial salary.

Now, there are some assumptions built into this table that you need to know about that also affect the numbers on this table. I did that for a few reasons:
  • sometimes steps are for good behaviour, pay tied to performance, and I am positing that there is no difference between the two except initial negotiation. Anyway, Candidate B starts at 2 steps higher than Candidate A, so Candidate B is still ahead and making 2% on a larger gross pay.
  • the math was easy, and I rounded. No decimals before coffee.
I think I made my point: you don't lose anything, but you can gain a lot by just asking.

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