Are you happy with your current salary? Or are you considering re-negotiating your compensation package with your employers? Are you just starting a job and are looking for an effective way to communicate your salary expectations? Look no further. Whether you’re just starting a new career or have been with your company for some time, we’ve devised a complete guide for you to negotiate your salary such that you come out a winner.
Negotiation is a skill, and like any other skill, it can be mastered and perfected. Fear of getting rejected or the fear of seeming too desperate can lead some workers never to negotiate their salaries and accept the very first figure that is offered to them. The thought of negotiating over one’s pay is often uncomfortable and is one that people actively avoid. However, we must understand that offers are made to be settled, and people who negotiate successfully earn more than the ones who don’t.
According to Glassdoor’s recent survey, 58% of women and 61% of men negotiated their salaries, and 17% of them reported better earnings in their current jobs after successful negotiation with their employers. The percentage of employees who take the first salary offer has also dropped to 40%. This goes to show half of your colleagues are negotiating their salaries in a bid to earn better, and you should join the wagon too.
If you’re applying for a new job, the process of salary negotiation lasts only three minutes; three minutes that will determine your compensation for a position you’ll probably hold for a long time. Make sure those minutes count.
Step 1: Preparing for the negotiation
1. Get an interview:
Thousands of resumes are sent and received every day. Your resume is an excellent way to start negotiating your worth. It will effectively let your employer know how good you are at what you do, what experiences you have, and how worthy you can be to the company. While writing your resume, make sure it’s tailor-made to the job you’re applying for. Instead of sending cookie-cutter resumes everywhere, send them to a select few and make sure your resume directly addresses the employer’s needs. Use a headline that attracts attention and includes a well-written description of your experience, starting with the last job you held. Don’t be afraid to write a long resume. It’s only bad if it’s boring. Don’t forget to mention your computer skills, any charitable work you’ve done, and the foreign languages you speak. The purpose of this is to get a face-to-face interview.
2. Getting a job offer:
So you landed an interview. Great job! The second step is getting a job offer from your employers. The point is to be as objective as possible, and never suggest that money is an issue at the beginning of the interview.
Stress on your skills during the interview and highlight your expertise as much as possible. Let the employers know of your leadership and problem-solving skills. Preparing for the meeting beforehand goes a long way and makes you ready to face many of the questions that are asked by the employer. You may get a job offer over the phone. However, use the phone only to confirm that you accept the job and postpone the salary negotiation until you meet in person.
You must postpone negotiating your compensation before you get a firm offer from the employer. If asked to negotiate on your salary expectations beforehand, stall the question with phrases such as “Before we discuss this, can I ask you about… ?” or “Can we discuss this when we’ve both decided that I’m perfect for this position?”
3. Gather information about the company:
Research specific details about the company before your interview so you can impress them with your knowledge. It also shows the potential employers of your desire to be involved in the company. Read the company’s website thoroughly and go through the press release section to catch up on the current company news.
Step 2: How to start the negotiation
1. The right attitude:
It’s all in the attitude. Hiring managers can sense your insecurity and lack of confidence the minute you step into the room. For you to be in a power position, you need to show an attitude that screams, ‘I am worth the salary I’m asking for.’ Learn how to shake hands firmly while holding eye contact with your interviewer. It’s easy to let the nervousness show in your face while going for an interview and negotiating something as crucial as your salary, but this is when you need to come out stronger than ever. Focus on how much you’re going to reward the company, and not on how much the company needs to reward you. Remember, the company has shortlisted you because you meet most of its requirements, act the part.
2. The perfect timing:
An interview has a curve where it starts with the employer just beginning to know you and then peaks to a point where they’re sure they got to have you for the company. Get the interview to its peak by focusing on your past experiences and knowledge to let your interviewer know why you’re different from the other interviewees. Let the employer hear you’re the answer to what they need. You’ll know the interview has peaked when your interviewer starts behaving more warmly and asks you questions such as how many days’ notice you need to give your present employer before you can quit and start working for them or asks precise questions regarding your job references. This is when you begin salary negotiations. Never before and never after.
Even when you’ve got a sure job offer from the employer, never mention your salary expectation. The interviewer must go first. If your employer asks you to go first, stall with phrases such as “I have done my research on compensation packages for this job. However, could you tell me how much your company is willing to offer to an employee of my position?”
3. Know exactly how much to ask:
Ask about the critical job responsibilities of the position. What will your essential duties be? What are your chances of advancing in the company? What kind of training will be provided for you before the job? Who will you report to? These questions will lead to the answer of how much you need to be asking for. Salary.com has a comprehensive salary calculator that can be put to use. Jobweb.com is a great site that offers information to college graduates on how much they’re worth.
Your salary surveys usually give you a range of how much a person of your position is currently earning. Pick the higher number in the range while communicating your salary expectations and work the negotiations from there.
Remember to include both the fixed salary as well as the benefits. Avoid mentioning your previous salary as this destroys your chances of making a significant leap in your earnings.
4. Avoid the first offer made by your employer:
Never accept the very first offer made by the employer. Remember, offers are made to be negotiated. If he offers the number such that it’s non-negotiable, do not just sit in silence as it can be interpreted as agreement from your side. After stating a figure, they may ask you questions such as “Do you agree to the mentioned salary” or “Is that okay with you?” to which you must never explicitly agree or disagree. Reply with an open-ended statement that lets your employer know that the negotiation is still ongoing. Statements such as “It definitely is in the range of my salary expectation” is open-ended and opens the door for further negotiations.
Hold your emotions in check when the first offer is mentioned, echo back the number to your employer and maintain silence after as if you’re thinking it over. You might be bursting with happiness if the amount they propose is way above what you expected, but don’t let it show in your face. There might be some awkward silence following that, but let the interviewer break the pause. They are more likely to offer you more if they think you’re perfect for the job.
Remember, a good negotiation entails two winners, wherein both the employer and the employee believe they have made a good deal. You need to be happy with the amount of money you’re bringing in, and the employer needs to believe you’re going to be an asset to the company.
Step 3: What to do if it doesn’t go your way
1. Know how much you would be willing to settle for if you get the job:
The figure you had in mind may not be the figure your employers are willing to pay you. However, there needs to be a walk away point for you where you let the employers know you’ll walk out if that amount is not met. Let your employers casually know that you are wanted by other organizations as well and may take up their offer. Having options gives you the upper-hand in a negotiation. Your employer will try to get the best deal for their company and start low. You need to strike a balance and find a middle ground on how much you think you should earn and how much the employer is willing to give you.
2. If you’re offered too less:
You may accept the current salary offer by asking for a written commitment of a raise in the near future, possibly the next 3-6 months, provided you perform exceptionally well for the company. This helps you determine the amount of trust the employer has on you and gives you a chance to prove yourself while working for the agreed salary. While on the subject, don’t forget to overlook the benefits such as insurance coverage, paid vacations, and retirement plans so you can decide whether or not you want to accept the offer.
If it’s too less, but you’re still attracted to the thought of working for the company, you may offer to work part-time or as a consultant. Instead of a 40-hour week, propose to work for 20, which will free you up for a second job. Speak percentages instead of being specific, such as 50% of my time instead of three days per week, which gives you more flexibility to determine your working hours.
You can try to keep negotiating a better offer, but it might start your relationship with the company on a sour note. If, after a few discussions, your requirements aren’t met, thank them for their time and withdraw your application.
So you landed a job and negotiated a good compensation deal with your employers regarding your salary. Do you stop now? No! When the time is right, you need to think about how you can better your salary situation. And by that, we don’t mean you start thinking of ways to get a raise on the second day of work! After a reasonable amount of time, preferably after a year, you can raise the subject of salary renegotiations with your boss. It is up to you to supply strong reasons that you deserve a raise and aren’t merely asking for one because you have a right to.
Step 1: Preparing for the negotiation
1. Find the perfect timing:
A good time to negotiate your salary is when you’re positive you’ve been doing performing exceptionally well at work. When you’ve been praised for tasks you just completed, or when there are significant changes in your job responsibility, this is when you may initiate the negotiation. You need not wait until a performance review to negotiate your salary. However, you need to adhere to company rules about salary increases and time your negotiation appropriately. If you have agreed on a timeframe with your employer during the initial negotiation on when you would qualify for a salary raise, remind them of this a month before the actual negotiation talk.
Three months before the negotiation, start collecting details on all the projects you’re asked to help with. Focus on the achievements that set you apart from your colleagues and quantify it as much as possible. Talk to your boss and discuss ways for you to excel at work. This is a great initiative that your boss will remember when you have the negotiation talk. Keep a log and start writing down exactly when and by how much you helped the company get better results. Communicate these results to your boss and send regular updates of your activities.
Remember, you need to increase your value in your company if you expect increments in your earnings, and the difficulty of replacing you determines your value. For you to be valuable to the company, you need to work yourself into becoming irreplaceable. You then have an upper-hand in the negotiation and can convince your employer of your options.
2. Get a meeting:
Get yourself a meeting with your employer to talk about the negotiations. Even though your employer has an open-door policy, it’s best to arrange a meeting with him so you can be better prepared. Studies suggest Thursdays are best to talk negotiations with your boss as our mind tries to unwind itself at the end of the week, so try and get a Thursday meeting. Make sure to ask for enough time from your employer, so the session isn’t rushed. You only get one chance to make your case. Do it right.
All through the meeting, let your boss know that you have been a top performer, and you have the numbers to prove it. Preparation is key. Practice with your friends or family so you can walk into the meeting prepared with answers to some of the questions or statements that your boss will likely say.
Step 2: How to start the negotiation
1. The right attitude:
Even though you’ve been in the same job for some time and are quite familiar with your boss, you may still get a sense of nervousness while talking about re-negotiating your salary. Walk in the room with your head held high and thank your employer for agreeing to meet with you. Think positive thoughts and try to keep your demeanor as casual as possible. Be polite but firm while speaking.
2. Know exactly how much to ask:
This is where your weekly log comes into play. Start with your key achievements in the past and how you’ve contributed to the well-being of your company. Let your employer know exactly how much you’ve contributed to the company or how you’ve helped in specific profit numbers go up. Quantify your achievements as much as possible. Never mention the cost of living or inflation. Focus only on your achievements.
Spend some time surveying compensation packages for your position, research employment ads that specify the amount of compensation you will receive at your position. If the amount you’re asking for is, say $76,850, don’t round it up to $77,000. Say the specific figure so your employer knows you’ve done your research. However, make sure the amount you’re asking for is fair and reasonable and justifiable to your achievements in the company.
Step 3: What to do if it doesn’t go your way:
1. If your employer shoots down your salary negotiation request:
Sometimes your employer might say they can’t give you a raise right now because the company isn’t doing well enough to afford the increment in salary. Do your research on the company’s performance beforehand and have all the information ready for you to counter that statement. Look for stock trends and investments made by the company to determine its current status. Information is power.
They may also reject your salary raise request by saying your performance isn’t good enough for you to get an increase in pay. Again, do your homework. Come to the meeting loaded with information on why that isn’t true. Quantify your achievements over the last few years, talk about the goals you set, and how much you accomplished.
2. If you’re offered too less:
If you are offered a very slight raise in salary, remain polite and thank your employer for meeting with you. Let him know that you don’t want the raise to happen right away and set a timeframe for the increase to take effect, possibly in a month or at the end of the quarter. Give your employer enough time to consider your request. This is also an excellent time to ask your employer what he expects from you and what specific goals you can achieve to qualify for a raise in your salary.
3. Counter the offer:
You may find that countering the proposition that your employer has just made may go your way. Mention your survey research again and let your employer know that someone with your credentials and position is earning in the range that you have mentioned and dig for a better offer. Remember, it is up to you and only you to show your boss that you have earned the right to ask for a raise, not just based on surveys but based on your performance as well.
4. Opt for other benefits:
So your request for a salary raise has been denied, or you have been offered very little. You can opt to negotiate better benefits from your company, which would still qualify as a win for you. An increase in vacation time or the ability to work more flexible hours are topics that can be negotiated with your employer. Maybe you can work from home some days, or the company might give you some stock options instead. The possibilities are endless.
However, if you feel that the raise wasn’t substantial enough and isn’t enough for you to keep working with the organization, maybe it’s time for you to think of the next job you will apply to.