I applied for a corporate medical director job that offered $141-213K. While I knew this was on the lower end, I did not realize how low it was. According to the data from Mozicare, this is below the 5th percentile, a realization that helped me set the bar higher. According to a Google search, the salary for a medical director averages at $196. This truly highlights the need for a platform like this. If no one accepts offers this low, it will raise the bar for all of us.

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Scenario 1: Imagine you start with a salary of $350,000 and receive a 3% annual raise each year.

Scenario 2: now, let’s assume you start with the same salary of $350,000. You negotiate slightly better annual raises of 3.5%.

The difference? After 30 years, the person with the 3.5% annual increase would have earned approximately $1,416,541 more than the person with the 3% increase. This highlights how even small differences in yearly raises can compound to create substantial long-term financial benefits.

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Scenario 1: Imagine you accept an initial salary of $350,000 with a 3% annual raise each year.

Scenario 2: Now, let’s assume you start with an initial salary of $332,500. The annual raise each year is the same at 3%.

The difference? By accepting a 5% lower starting salary, you would lose out on $713,631 in total earnings over 30 years. Additionally, your salary at the end of the 30 years under scenario 2 would be $41,240 lower than if you had started. This highlights the importance of negotiating for the best possible salary from the outset, as even small differences in starting pay can compound over time. When negotiating your starting salary, even small differences can have a significant impact over the course of your career.

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Recently, I had the opportunity to attend a course taught by Dr. Margaret Neale, one of the leading experts in negotiation at Stanford Business School. Her insights on negotiation strategies, particularly around the anchoring effect, are especially valuable for salary negotiations.

The concept of anchoring stems from psychological research by Amos Tversky and Daniel Kahneman in the 1970s, which showed how the first piece of information in decision-making can influence subsequent judgments, including in negotiations.

Dr. Neale’s perspective on anchoring was both practical and eye-opening. She explained that the first number presented in a negotiation sets a reference point, significantly shaping the final outcome.

Here are some key takeaways from her approach:

1. Make the First Offer: Neale advocates that the party who makes the first offer often has the upper hand. By doing so, you set an anchor that frames the rest of the negotiation. The other party’s counteroffer is likely to revolve around that anchor, influencing the final agreement.
2. Be Ambitious, but Realistic: Neale suggests that the initial offer should be ambitious enough to allow room for negotiation, but still grounded in research and facts. The anchor should signal that you know your worth and what the market can bear.
3. Use Data to Justify the Anchor: Anchoring works best when backed by data. Neale recommends using industry standards, salary reports, or competitive offers to make your anchor more persuasive and less likely to be dismissed.
4. Re-Anchor If Needed: If the other party makes the first offer and it’s far from your expectations, Neale suggests quickly countering with your own anchor to reset the frame of reference.

The insights from this course have significantly shaped how I approach negotiations, particularly the power of setting the tone early with a well-calculated anchor.

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A few years ago, when I was in discussions with a new employer about a position I was excited about, everything was falling into place—except for one issue: my then employer had provided me with a substantial sign-on bonus that I would have to repay if I left before completing my contract. This amounted to nearly $100k.

The new employer did not typically offer sign-on bonuses, and their compensation package, while competitive, didn’t account for this type of situation. I knew I had to negotiate if I wanted to make the transition feasible.

During one of our conversations, I explained my situation in detail. I highlighted that the only thing standing between me and their offer was the sign-on bonus. I positioned the request as a necessary step for me to make the move. I emphasized how eager I was to join their team, that this role aligned perfectly with my long-term goals, and that I was willing to commit fully if they could help me navigate this obstacle. I felt being firm but enthusiastic was key.

To my relief, they were receptive. After a few days of internal discussions, they came back with a proposal: they would make a one-time exception and offer me a $100k sign-on bonus to offset the repayment.

This was a great reminder that even when something seems non-negotiable, it’s always worth asking when you have a clear rationale.

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