This article is written by Bonnie Chan, Head of Technology and Contracting & Payroll Services.
It was originally published in LinkedIn on 10th May 2022.
Knowing how to negotiate remuneration as part of a job offer is a valuable skill that can help ensure you’re fairly compensated for the work you do. However, like any skill, it takes preparation and practice to do well, which can be difficult when changing roles is not likely a regular occurrence.
Salary negotiation isn’t always the most comfortable process but, is clearly one of the critical components of any career move. By taking the time to discuss and define your market value, you can help employers better understand your expectations and positioning. As with any new skill, the more you negotiate, the more you’ll improve and the easier it will become. The key is being able to achieve your goals without souring the relationship or unnecessarily derailing the offer.
Why you should negotiate?
Many people feel anxiety at the thought of negotiating which is natural. However, the implications of not engaging can be significant:
Particularly earlier in your career, effective negotiation can have a significant compound impact on your life-time earnings with future cost of living increases, promotions and job moves stemming from your starting point
% increases can be limited when employers hire from the market so, if you fall behind in market rate, in can be difficult to catch up again
Current and future employers may see your seniority/potential through the lens of your salary and market value
A well-handled negotiation may even add to the employer's positive perception of you
It’s important to understand that negotiating your salary is a perfectly normal part of the employment process and, in many cases, employers expect candidates to negotiate.
When should you start talking about salary?
Before the interview process: Typically, if you are engaged directly with an employer, they may not address the issue of compensation until at least during the interview. They may however ask you to state your expectations on an application or, the internal recruiter may conduct an initial phone screen. Follow our tips below to be prepared, even before the interviews start. If you are engaged by them on an initial screening call, it is reasonable to ask about the ballpark salary budget to ensure you are in the right territory.
During the interview process: There is no offer to negotiate if there is no offer! The primary focus should be delivering the best interview possible and highlighting your value clearly so that you that you have the best leverage. However, an employer may want to initiate this discussion. If they are sounding you out about expectations, it is a positive sign so again, follow our tips below to be fully prepared.
After the interview process: This is crunch time. If you have delivered a good set of interviews and an offer follows, you need to be ready and prepared to engage. If it is an offer you want to accept (at the right number) then follow our tips below to handle it professionally and carefully.
Tips to Prepare for Salary Negotiation
Evaluate - Start by evaluating what you have to offer, based on the initial job description and then, as your understanding of the role evolves through the process. You need to demonstrate to the employer what skills that you have are valuable and appliable on this role. This evaluation will also help you understand if you fall short in any areas which will impact on your negotiation capacity.
Research your market value - Knowing your current true market value and that of the role can give you a good baseline for your salary request and can be used as justification. Speak with your peers, recruiters and HR professionals in your network to gain a genuine sense of the market ranges.
Ensure you are completely clear about your current package. Your base salary, bonus potential and bonus history are obvious but, what about:
Employer pension contribution?
Great medical/dental scheme?
These can all add up. It is also important to understand what happens to any pending bonus payment if you resign.
4. Practice how to clearly communicate your expectations – both verbally (practice with friend!) and in writing. Some additional guidance here would be:
Try to avoid quoting a range. Candidates tend to expect the high and employers gravitate to the low which creates an expectation gap. If you want to give a sense of flexibility you could quote 'at $X I would be very happy and would accept, at $X I would seriously consider the opportunity and below this, I would be less likely to give a positive response.'
5. Be confident but not arrogant. It is key that you start with a co-operative approach and show excitement and commitment. You are setting the tone for your potential entry into the organisation.
6. Prepare for tough questions and to be challenged. Recruiters and hiring managers negotiate often, so they will likely be prepared to ask important, sometimes intimidating questions to figure out your motivations. It’s important not to get rattled by these questions and to remain honest and stick to your expectations.
7. Be flexible - If you want the job, be flexible and creative about how you approach the negotiation. Be ready to ask for or suggest alternatives in the situation where the employer lets you know they cannot increase the salary offer.
Can they add a guaranteed salary review in 3 or 6 months once they are more confident of your value add?
Can they guarantee the first year's bonus to reduce the risk?
If it is a growth company, can they offer you access to equity?
8. Try and keep your end of the process tight
It's important to only negotiate the offer once, or twice at the most. You should also avoid revisiting a compensation package that you've already agreed upon. After an initial offer, it is always okay to ask for some time to process the information. If the offer is presented verbally, ask for the details on e-mail to confirm you haven't missed anything.
To gain more detailed insights please contact Bonnie Chan at email@example.com