MASTER THE ART OF NEGOTIATION AND GET THE SALARY YOU DESERVE
Whether you’re considering a new job, agreeing a promotion or moving sideways within a company, agreeing on a salary is likely to be an important part of the process. This guide will help you get those negotiations right.
KNOW HOW AND WHEN TO NEGOTIATE YOUR SALARY
Lots people find the prospect of negotiating their salary daunting and uncomfortable. They fear they may come across as greedy or that a company will have second thoughts about them. But as long as you have credible reasons and are respectful, no company will withdraw an offer because you tried to negotiate.
This also applies to internal moves, promotions and the yearly pay reviews most organizations give their staff. But negotiating a better pay package at the start of a new job is when it has the biggest impact.
As Linda Babcock points out in her bookWomen Don’t Ask,more than 90% of women do not negotiate their first salary whereas more than 50% of men do. Those who do negotiate achieve on average a 7% uplift in salary. Since future pay rises are usually calculated as a percentage of your current salary, this adds up to a significant amount over a career.
Having said that you shouldn’t assume the first offer you receive is an attempt to secure you at the lowest price. If you are the preferred candidate, a good leader will usually do all they can, within the constraints of their budget, to secure you at a cost that is fair and in line with the organization and your new team.
It’s also important to bear in mind remuneration and benefits specialists within human resources (HR) teams spend a lot of time formulating packages that are compelling to candidates. There is usually more on offer than just a salary and you should evaluate all the benefits when considering whether to accept an offer or not.
But as long as you approach any discussion in the right way, you have nothing to lose.
HOW TO NEGOTIATE
There’s plenty you can do to improve your chances of getting what you need from a discussion about your salary. Here are a few tips on how to prepare, conduct and close a negotiation.
DO YOUR RESEARCH
When a company sets the salary for a role, there are a number of things they’ll think about:
- What existing employees in a similar role are paid?
- What competitors and the market are paying?
- What else they offer in addition to the salary?
- Other influential issues, such as how long the role has been vacant and skills shortages in the sector.
You should think about these too. Understanding all the factors that have an impact on hiring in your industry, and for your position, will help you formulate your negotiating position.
Put together a spreadsheet detailing your past three years’ worth of earnings so that you can see clearly what your total package is. Include your base salary, bonuses and the financial benefit of any allowances, equity awards, insurances and other perks. Now do the same for any new offer so you can compare like with like.
You should also research wider pay in your specific sector and location so that you know you are being valued correctly. Look at salary surveys and salary calculators online, talk to your network and pick the brains of recruitment agents who have a huge amount of knowledge in this area.
If you are a woman, make sure you ask men and women in your field of expertise for feedback so that you are aware of any gender bias. By considering multiple sources of information, you are more likely to arrive at an accurate figure.
BE OPEN AND TRANSPARENT
You’re likely to be asked what your current salary is and what salary you’d expect in a new role, at some point in the recruitment process. This isn’t an unreasonable request and we think it’s best to give a transparent response.
Some career advisors suggest not providing this information until you’re at an advanced stage of the hiring process. We disagree. If a new employer can’t match your current or expected salary it’s better to know before people waste their time and energy on the recruitment process. When you are asked, be clear about what your salary is and what your total package includes and explain what you would be looking for and why. Tell them what aspects of an offer you’d consider being flexible about and which you won’t compromise on.
TAKE YOUR TIME
When you’re made an offer, it’s reasonable to ask for at least 48 hours to think about it. Consider every aspect of the package such as: the flexibility it offers, bonuses, specific training and accreditation opportunities, relocation reimbursements, work-life balance, pension contributions, annual leave entitlements (some companies allow you to purchase extra days), childcare contributions or facilities and other salary sacrifice opportunities. These perks can quickly add up to make an apparently average salary, much more attractive. And if the salary is non-negotiable, some other aspects of the package might be.
Some companies may try to prevent entering into a negotiation in order to secure you quickly, by saying their offer is ‘best and final’. But simply saying: “I’m excited, but will need a day or two to consider this. Is the offer negotiable at all?” is a good way to buy yourself some time before returning to them with your terms. They may also tell you that based on your current salary they are offering a certain figure. If you think that undervalues you, remind them politely of what you can offer and what you feel you are worth, before telling them your preferred salary.
Also consider what your priorities are and whether the offer matches them. Clarify anything you are uncertain about. If there is a bonus, make sure you are clear on how it will be calculated and what performance measures must be met to achieve it. Ask what the past three years’ bonus pools have been and how much people at your level were awarded, to get an idea of what to expect.
But don’t take too long thinking about it. You should ask when they need your final decision and then respect that deadline.
KEEP DISCUSSIONS LIGHT AND FRIENDLY
Whether you are negotiating face-to-face or by email (many people find it less intimidating doing it in writing) always be polite but confident. A quietly confident candidate who knows what they offer and how to articulate it, is likely to create a good impression. Outline your commitment to the process and the opportunity and reiterate your skills and experience. Once you have justified your number, tell them what it is.
During discussions also think about:
Your body language.The simple act of straightening up your posture can trick your brain into feeling more confident. Sit up straight, lean in a little, smile and nod to demonstrate you understand a point. If your body language and verbal communication – pitch, tone, and rhythm – are in sync with the person you’re talking to (known as ‘mirroring’) it’s a sign you’re getting on well.
Who you talk to.You’ll have a better chance of negotiating a higher salary if you’re talking to your soon-to-be direct manager. They have a vested interest in you joining as soon as possible and an emotional connection with their preferred candidate. Someone from the HR team may be less willing and able to give you what you want.
Your starting figure. Pick a salary you would be happy with and then ask for slightly more. Negotiations tend to work their way down, so don’t sell yourself short by starting too low. You will hopefully end up with what you wanted, or higher, while the manager will feel like they have saved some money.
When you’ll walk away. If the package on offer just doesn’t stack up and you can’t reach a mutually agreeable number, you’ll need to respectfully decline. This comes back to doing your research and knowing the market rate, how you’ll compare to the team and what you’re prepared to compromise on. For example, will you take a lower salary for a better company that pays higher bonuses? Discuss your priorities with close family members and others who’ll be affected by your decision beforehand.
WHAT TO DO IF YOU HAVE SEVERAL OFFERS
If you are lucky enough to have more than one job offer on the table, you should let all the companies involved know. If you unexpectedly decline one it’ll reflect badly on you and could damage your chances of joining that company in the future. Companies will appreciate your honesty and, if they really want you, they’ll do everything they can to prevent you joining a competitor. Having said that, make it clear you’re considering more than just the salary so they don’t feel they’re being forced into a bidding war.
In an ideal situation you’d be able to compare multiple job offers simultaneously, but that’s not always possible. However, if several offers are likely to arrive at a similar time you can try and slow down the process so that you get a chance to consider them all before making a decision. You can do this subtly, by:
- Requesting a final meeting with additional team members.
- Asking to discuss the offer in more detail.
- Asking for the offer in writing.
- Or simply asking for a few days to consider your options.
WHAT SHOULD YOU DO IF YOU’RE STAYING AT THE SAME COMPANY?
Most of the above is still applicable when negotiating a pay rise or new role with your current employers, but in this situation you should also consider:
- Your overall performance and key achievements.
- The job description and how your role is changing.
- The company position and peer group pay levels.
- The length of time you have been in the role.
If you are asking for a pay rise, keep in mind that your annual performance appraisal is probably not the best time to do it. Most large companies have an annual budget cycle and the salary budgets are set months in advance of the performance cycle. So, if you want a pay rise, you’ll need to tell your manager three or four months ahead of your annual discussion.
HOW TO CLOSE NEGOTIATIONS
If the number you have proposed is rejected and the manager cannot negotiate any further, you will need to decline or accept the offer. If you choose to accept you can say something like: “Thanks for considering my request and I understand your position, but I am still very excited about the opportunity and would like to accept the offer.”
Once an offer is made make sure you get it in writing. A verbal offer isn’t necessarily binding and leaves its terms open to interpretation, whereas a written offer or employment contract will clearly say what is included in your package.
Whatever your decision, you should always thank everyone involved for their time and the opportunity. You don’t want to burn any bridges you might need down the road.
FIVE THINGS TO REMEMBER:
- Don’t be scared to negotiate.
- Know what you are worth.
- Be positive, respectful and clear through the process.
- Consider all aspects of the package and its overall value.
- Negotiate on more than just salary.
