How do I negotiate a better salary?
Once you've established your personal market value, how do you actually make
sure you get it? It can be easier holding out for more money when you're in the
process of being offered a job than trying to get a raise when you actually have
one, but the negotiating process is essentially the same.
Negotiating a salary for a new job
If you're being offered a new job, don't rush things. If specific salary numbers
are discussed directly at an interview, ask for time to consider any offer made
to you. If your interviewers ask what you think the role is worth, be ready to
turn the question round and ask what range they had in mind. If you expect your
new employer to beat your existing salary package, be sure to include all your
various benefits in your calculation and then add on a bit extra for bargaining
space.
If you're not absolutely crazy about the job anyway, you could consider turning
it down to see whether they come back with an improved offer that might tip the
balance. Be aware that this can be a risky strategy if you're desperate for
work.
Negotiating a pay rise in your current job
If you are already in a job and trying to secure a pay rise, you need to go in
well prepared. Your boss is certain to question why you think you're worth the
extra money, so be ready to argue your case clearly and persuasively using
specific examples to prove your worth. Make sure you have a good idea of what
other people with your experience and responsibilities are earning, presenting
evidence of your research if appropriate.
Whatever your situation, here are some of the key things to consider:
- Positions of power - Who's holding the cards? Each side has
something the other wants – you want their job and salary, they want your skills
and experience. The eventual winner of the negotiation will be to one who holds
more positions of power so make sure they know just how much impact you can have
on their business.
- Bargaining tools - Is there anything extra either side can add
or remove from an offer that is of value to the other side? Would you be
prepared to forgo a company car allowance if they were able to get a salary
closer to what you desire? These tools may not have a specific monetary worth,
such as having the option to work from home, but can be of great value to the
negotiation process. Added extras to enhance your overall package that could be
extracted from the employer include extra holiday, an increased pension
contribution, health care, flexi-time working or even your own office. Think
about things you could offer such as essential business contacts or insider
knowledge on a competitor. You could also suggest a guaranteed increase in
salary after a certain time period once you have proven your worth. This makes
the employer aware you will put in extra effort to achieve goals during that
time to get the reward.
- Consequence of non-agreement - What happens if neither side is
happy? If you're negotiating for a new job there may be another candidate who is
just as good that they could offer the job to instead at a lower rate. Or you
may be the only suitable interviewee and they are desperate for you to join the
company. If you're asking for a pay rise, if they don't give you what you want
would you leave, meaning they have to go through the cost and effort involved
with finding a replacement? Whoever stands to gain the most from completing the
deal will generally lose out in the negotiation.
Unlike more straightforward transactions, such as buying a car where all the
cards are on the table, many of the factors to salary negotiation are hidden or
implied. This makes it very difficult to judge who is on top in the negotiation
so you may need to be more flexible than you would usually be.
If you approach the negotiation in the right way, your employer or potential
employer will be impressed, regardless of whether you eventually win or lose,
and see it as another skill which you can bring to their business.
Closing the deal
Make sure you have a record of the agreement down on paper which is signed by
both parties. There's no point winning a negotiation if you allow the other side
to go back on their responsibilities at a later date.
Particularly when negotiating a salary for a new job, be sure not to overlook
anything that needs to be factored in. Will you need to relocate? Will the
company make a contribution to your costs?
If the job is really your dream role, you might find you're willing to be more
flexible. But if they ask you to accept a lower salary than you currently enjoy,
always check to see how regularly you can expect a pay review.
