The words “salary negotiation” can dry the mouth of the most confident person, but renegotiating your package with your existing boss or coming to an agreement with a new employer needn’t be terrifying.
If you are well-prepared for the discussion and approach it with conviction, it can be rather exciting and empowering.
PayScale’s Salary Negotiation Guide — an international benchmark—shows that 75% of professionals who ask for a raise get one. Yet 60% of millennials accept their first job offer without negotiating, often setting them up to be compensated below their worth for years into the future.
There are three major instances where you might need to negotiate your salary:
• accepting a job from a new employee,
• applying for a new role at your current employer, and
• seeking more compensation for your existing role.
Here are some tips to help you secure the best possible deal from your employer:
1. Sell yourself before putting a price on your skills and experience
Whether you’re presenting yourself for a new role or motivating for a salary increase, it’s important to demonstrate your value before you talk about money. That means you need to show that you understand the opportunities and challenges your manager and the organisation are facing, and how you can help address them. It also requires that you be charming and sincere to win the employer’s confidence.
2. Get the timing right
It’s important to choose the appropriate moment before talking about money. If you’re applying for a job at a new employer or a new role at your current place of work, wait for the interviewer to bring up the topic of remuneration. When you are thinking about asking for a raise in your existing job, wait for an opportune time, such as when you’ve secured an important contract for the company or received good feedback in your performance review.
3. Do your homework
Being informed is the key to faring well in salary negotiations. You should have an idea of the salary range similar organisations usually offer for similar roles to the one you hold or are applying for. You should also be aware of which skills and qualities you have that might set you apart and increase your value. Talk to people in your industry and look at the salaries and job descriptions on online job boards to get some ideas.
Steer away from basing your ask on personal circumstances – the company is paying for your skill, so make sure that you always relate your expectation to the value that you add to the organisation. Remember, employers usually offer 10-20% more if you held a similar role in a similar industry when you’re applying for an entry to mid-level position. Any awards, certifications, and qualifications you have above the minimum job spec might increase your value to the employer, and hence the salary you can negotiate.
4. Understand the offer on the table
Your offer will usually be presented as a monthly or annual cost-to-company package – be sure that you understand the net salary and benefits the employer is proposing. You can ask for a dummy payslip so that you can see the take-home pay each month as well as how much money the employer is paying towards retirement, medical insurance and other benefits.
Be especially careful to understand remuneration that comes in the form of performance bonuses, commissions, and staff share schemes. It is easy to under or over-estimate the money you’ll be bringing in if you are not clear about how these will work in practice. And don’t forget that benefits such as paid maternity leave, annual leave and workplace facilities like gyms and canteen also have a financial worth. If your new workplace won’t provide you with gym access or paid maternity leave, is it prepared to offer financial compensation?
Think like an entrepreneur when you embark on your salary negotiations. As a business builder you take risks to follow your dreams and pursue your passions. Your employer will usually appreciate your commitment and excitement, helping you to advance your career and achieve the remuneration you are worth.
Heidi Duvenage is the Head of Sage Talent Solutions.