If someone came to you with a check for $600,000, would you turn them down? I’m guessing you probably wouldn’t. But if you fail to negotiate your starting salary, you may in effect be doing the same thing.
According to a study conducted by George Mason University and Temple University, salary negotiations have a compounding effect, meaning if you negotiate for a higher salary at the beginning of your career, any raises you get in the future will be higher as well.
The study found that not only do non-negotiating employees miss out on an additional $5,000 per year to start — any pay bumps they receive over the course of their career will still leave them trailing behind their negotiating counterparts. Assume an initial salary of $50,000 a year with an annual increase of five percent, and you’re looking at a loss of $600,000 throughout your career compared to those who did successfully negotiate.
[Related: 4 Things to Consider When Asking for a Raise]
So, what can you do about it?
1. Commit to Taking Action
Don’t be too hard on yourself if you didn’t negotiate your starting salary — it’s never too late to fight for what you deserve. But you should act as quickly as possible, since the sooner you see a pay raise, the sooner you’ll enjoy increased returns.
It’s hard to successfully negotiate your salary if you don’t know what you should be making in the first place. Find out the market value of your skills with Know Your Worth, then use that information to set a range for what you’re willing to accept.
3. Start the Conversation
From there, it’s time to have a conversation with your manager and HR. While every conversation will be unique according to your personal situation, it always helps to be confident and keep your emotions in check.
[Related: 10 Dos & Don’ts of Salary Negotiation]
With three in five employees admitting that they haven’t negotiated, tens of millions of Americans have the opportunity to step up and ensure they receive fair pay. But remember: the sooner you act, the better. So if you haven’t yet had this conversation, put something on the books. You owe it to yourself to not settle for less.