E Interview preparation academy E Negotiating Your Salary E A comprehensive guide on salary negotiation

Negotiating Your Salary: A Comprehensive Guide

Negotiating your salary- A Comprehensive Guide

Learning how to negotiate a higher salary can make a significant impact on your earnings. This doesn’t only apply to your next role, but also to your long-term career based on your compound earning potential. Despite this, most candidates are hesitant to negotiate their salary. A survey done by Robert Half proved this to be true, where 55% of the respondents said they didn’t try to negotiate for higher pay on their last job offer.

Many candidates are concerned that they might lose the job offer if they ask for a higher salary. However, this is not always the case. The truth is that most hiring managers expect candidates to negotiate their salaries. In this article, we will share salary negotiation tips that will help you walk away from the negotiation table with the salary you truly deserve.

Why you should negotiate

In most cases, employers have a salary range for each of their vacancies. This means that there is always an opportunity for negotiation. In fact, 70% of hiring managers anticipate candidates to negotiate a higher salary after a job offer. So, it’s a common practice for employers to offer a lower salary to start, leaving room for negotiation.

Professionals who move to a new position outside of their company can expect a compensation boost of 10% to 20%. How much increase you’ll get will vary depending on how your negotiation goes to achieve a win-win agreement. Let’s say you were offered a starting salary of $100, 000. If you’re apprehensive about negotiating and jumped to accepting the first offer, you could be leaving $10,000 to $20,000 per year on the table.

Salary negotiation, whether monetary or non-monetary benefits, is not just about you being happy with the offer. It is also an opportunity to demonstrate that you understand the market, know your worth, and are confident about what you can bring to the business. That being the case, you are showing your potential employer that you are indeed a valuable hire.

What you should negotiate

A compensation package is far more than just a regular paycheck. It typically comprises monetary and non-monetary elements. However, when we talk about negotiation, the first thing that comes to mind is asking for higher pay. While salary definitely matters, the benefits constitute 30.9% of the total compensation package. If you do the math, this is not a small sum that can just be brushed aside.

Apart from the pay, you can also negotiate the non-monetary aspect of the job offer. In fact, XpertHR’s Recruiting and Hiring Survey 2021 revealed that 42% of the employers said they are open to negotiating bonuses. Additionally, 32% of the respondents are willing to negotiate benefits. So, taking both the monetary and non-monetary elements into account when negotiating is imperative to get the best offer possible. With that in mind, here are some of the top things you should negotiate.

a) Salary

Salary is the fixed amount of pay that the companies periodically pay to their employees. It generally makes up 69.1% of the total compensation package. So, candidates see this as the most critical part of a job offer. When it comes to salary negotiation, most companies are flexible. According to a survey, nearly 90% of the organizations said that they are open to negotiating pay with a prospective hire.

b) Benefits

Benefits cover the indirect pay an employee receives, which are equally critical in any job offer. While benefits don’t provide direct cash value, these can help you pay for healthcare, save for retirement, and take the time off work when needed. These are essential for improving your health and well-being that could impact both your personal and professional life. Below are some of the benefits you can negotiate.

  • Leave
  • Severance Package
  • Healthcare Benefits
  • Childcare Support
  • Tuition Reimbursement

 c) Work Location and Hours

In response to COVID-19 measures, many companies have refocused their IT strategy and budget to enable flexible working arrangements. Under this work scheme, employees have the opportunity to work in different locations and hours to meet business and personal needs. According to research, 60% of the businesses plan to continue this way of working. This means a remote work or hybrid model will continue to become the new norm. Employees who have never thought of working this way are experiencing a newfound love for flexibility that the new norm can offer. If you’re one of them, this one is for your negotiation list.

d) Job Title and Responsibilities

Your job title defines your role and seniority level in the organization. While this does not put food on the table or money in your bank account, it can impact your career progression and income level. By ensuring the title is commensurate with the role’s responsibilities, you can be in a stronger position for a more senior role and better pay in your future job applications. Before entering a negotiation, consider what is realistic within the context of the firm and the industry. As a rule of thumb, startups may be more flexible with titles than big companies, as the latter may have a more rigid job title structure.

e) Signing Bonus

While bonuses come in many shapes and sizes, the signing bonus is the most common one. This is a one-time payment that is generally awarded to a new employee for joining the company. If the employer is unable to meet your salary requirements, consider negotiating a signing bonus. Since this comes from a different budget, companies have greater flexibility with signing bonuses than with salaries. However, keep in mind that this often comes with terms, such as required job tenure or resignation restrictions. Make sure you know and understand these terms before accepting the offer.

Salary Negotiation Tips

Salary negotiation is a vital part of the job offer process. Whether you are a veteran or an early-career professional, knowing how to negotiate a higher salary after a job offer can maximize your long-term earning potential. So, make sure to follow the tips below.

a) Know your worth

When negotiating compensation, information is your strongest ally. This can provide you with a realistic view of an ideal salary range for your target job. Additionally, it can help you justify why you’re asking for higher compensation. So, the first thing to keep in mind is to understand your value.

Before heading into a negotiation, familiarize yourself with the industry salary trends. To find relevant data, we recommend checking existing public data. Some of the resources you may find useful include Glassdoor, Salary.com, and PayScale. Understanding where you fit in the job market can help you strengthen your bargaining position.

The job market data can provide an idea of the salary range that is common for your target position. However, the public data won’t give you everything there is to know about your own worth. So your work doesn’t stop here. Your candidate profile impacts the salary range you can request. Thus, identifying where you stand is imperative.

To figure out where you stand, read through your target job’s responsibilities and requirements. Then, compare them with your level of expertise and experience. For example, if you’re an early staged professional, you know you aren’t quite at the top of the salary range yet. On the other hand, having some experience or being more skilled can put you at the mid to top of the range.

b) Set a range, not a figure

Now that you have understood your value, it’s time to determine your expected salary. Having a figure in mind will help you make an informed decision on whether to accept the job offer or consider salary negotiation. So, make sure you have figured out your target number before entering the negotiation table. Remember, preparation is key to achieving a successful negotiation outcome.

To get the best offer possible, we recommend setting a range rather than a single fixed number. This gives you an edge by making you come across as flexible, maximizing your chances of getting the salary you deserve. An online study conducted by Association for Psychological Science proved this to be true. The outcome revealed that providing a range can result in significantly higher overall salary agreements.

When you specify a range, be prepared that the decision-maker will likely choose the lowball end. So, it’s best to start with your ideal compensation amount and utilize it as a negotiating starting point. Of course, you also need to consider your candidate profile and the data you’ve gathered from your research. For example, if your minimum acceptable salary is $70,000, your desired salary is $80,000, and the market range is $80,000 to $100,000, your range may be around $80,000 to $90,000.

c) Consider perks and benefits

The value of perks and benefits is often less obvious than the salary. Hence, it is easily overlooked during a salary negotiation. However, the non-monetary benefits make up 30.9% of your total compensation. So these forms of compensation can make a great deal and are worth considering before accepting a job offer.

Create a summarized list of perks and benefits that can add the most advantages to your work and personal life. Then, prioritize two to three elements that would be beneficial based on your personal goals and needs. In case the employer is unable to negotiate higher pay, you may leverage this to bridge any gaps and supplement your salary needs. Perks and benefits don’t impact the employer’s salary budget for the role. Hence, you can expect them to be open to negotiating these separately.

Bear in mind that there is no such thing as a standard one size fits all benefits package. This may differ depending on the company policy and the legal environment in which the business operates. Additionally, there are benefits that can be more challenging to negotiate because the companies already have established terms. So, make sure to do your own diligence in researching what’s available to you and open for negotiation. 

d) Build your candidate value proposition

A pitch is a summarized presentation of your candidate’s value proposition with the goal of persuading decision-makers that you are worthy of the compensation you’re asking. Having the right words to say is critical in making or breaking your chances of getting paid fairly. So, your pitch needs to be carefully structured around a compelling narrative that articulates the value you can bring to the role.

To build a strong case, avoid using your personal needs to justify your request. Instead, mention your two to three unique selling points, highlighting specific examples of how your skills and experience can benefit your target company. Then, use the data from your research to back up your argument with salary relevant to the industry, employer, and role.

Apart from knowing what to say, how you communicate your pitch will also play a crucial role in your salary negotiation. You can have the best pitch, but if you can’t deliver it in a way that convinces the hiring manager, you may not achieve your desired outcome. Thus, rehearsing your pitch is a must. Practice using a mirror, video, or with a friend. As you become comfortable with your pitch, you’ll be more confident with the delivery. In turn, the probability of achieving a successful negotiation increases.

e) Carefully assess the job offer

When you finally get an offer, it can be tempting to accept it on the spot. However, not every job offer might be the right one for you. Many important things rely on you landing the right opportunity, like your career progression, fulfillment, self-confidence, and well-being. Hence, taking the time to carefully assess it before moving forward is imperative. If you’re unsure how you may ask yourself the following questions to assess the offer and decide whether it’s worth your while or not.

  • Does the offer reflect your candidate profile and average market salary range?
  • Does the offer satisfy both your monetary and non-monetary needs?
  • Does the company culture resonate with your personal values and working style?
  • Does the role fit your long-term career goals, or could it be a stepping stone to reach them?

In general, no job will meet one hundred percent of your requirements. So, it’s important to take a holistic approach when evaluating an offer, keeping in mind your priorities. If you think you got an offer that’s already fair and aligned with your needs, you can say yes and seal the deal. Otherwise, we encourage you to negotiate and attempt to achieve a win-win solution with your prospective employer.

f) Don’t give in to pressure

When you’re in need of a new job, it can be easy to give in to the pressure and accept any offer. After all, it’s better than a zero income, right? Although this may seem a logical solution, it can hurt your long-term income potential and job fulfillment. Knowing when to throw in the towel is imperative to get the salary you deserve.

Before walking into a negotiation, make sure you know the minimum offer you are happy to accept. If you are unable to establish a mutually satisfactory agreement, walking away may be the best option. When things don’t go in your favor, trust that there is always something better coming your way. With the labor market reaching full employment in 2022, you’ll surely find the right opportunity for you.

Never burn bridges even if the negotiation didn’t work out as expected. Always remain professional and polite as your reputation is at stake. Thank the employer for the opportunity and express your interest in working with them in the future. Your professionalism will be appreciated by the company. They may even consider contacting you if another opportunity that suits your requirements arises.

Unless you’ve initially been offered everything you have hoped for, you’re unlikely to get the compensation you want if you don’t ask for it. As daunting as it may seem, salary negotiation is your best shot at getting what you deserve, which can make a significant difference in your long-term income potential. The above guide should help you maximize the probability of achieving an outcome that is beneficial for you and your prospective employer. But if you still find the thought of salary negotiation intimidating, you can always reach out to us for support.

References
1) CareerHigher, 2021. How to Negotiate Your Salary. Available at: https://www.careerhigher.co/career-advice/how-to-negotiate-your-salary-122952/
2) CareerHigher, 2021. How to Evaluate a Job Offer. Available at: https://www.careerhigher.co/career-advice/how-to-evaluate-a-job-offer-125070/
3) CareerHigher, 2021. 8 Things You Should Negotiate Other than Salary. Available at: https://www.careerhigher.co/career-advice/8-things-you-should-negotiate-other-than-salary-123591/
4) Association for Psychological Science, 2015. Offering a Range of Numbers Can Lead to an Edge in Negotiations. Available at: https://www.psychologicalscience.org/news/minds-business/offering-a-range-of-numbers-can-lead-to-an-edge-in-negotiations.html
5) CareerHigher, 2021. How to Get the Salary You Deserve During the Pandemic. Available at: https://www.careerhigher.co/career-advice/getting-the-pay-you-deserve-during-the-pandemic-124597/
6) Forbes, 2014. Employees Who Stay in Companies Longer Than Two Years Get Paid 50% Less. Available at: https://www.forbes.com/sites/cameronkeng/2014/06/22/employees-that-stay-in-companies-longer-than-2-years-get-paid-50-less/?sh=28d55e02e07f
7) U.S. Bureau of Labor Statistics. Employer Costs for Employee Compensation Summary. Available at: https://www.bls.gov/news.release/ecec.nr0.htm
8) SHRM, 2021. Most Employers Open to Negotiating Salary, Not Benefits. Available at: https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/most-employers-open-to-negotiating-salary-not-benefits.aspx
9) 3stepIT, 2021. Flexible working and the impact of COVID-19. Available at: https://www.3stepit.com/blog/flexible-working-and-the-impact-of-covid-19
10) Harvard Law School, 2021. Signing Bonus Negotiation 101. Available at: https://www.pon.harvard.edu/daily/business-negotiations/signing-bonus-negotiation-101/
11) RobertHalf, 2019. Salary Negotiation. Available at: https://www.roberthalf.com/blog/compensation-and-benefits/salary-negotiation
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