THU, JUNE 9, 2011 AT 12:00
Asking for a pay rise or negotiating a salary when you first join a new company is tough. Knowing what do’s and don’ts to follow for each different situation and scenario is also very challenging and there aren’t a set of generic rules you can simply follow that will be guaranteed to work. Ultimately it really depends on who you are negotiating with and also what you feel is right for you. However to give you a few pointers and to get you started here are some tips and tricks on salary negotiation that we gave to someone we worked with and who ended up increasing his salary by over 40%:
Last month, I helped someone with their salary negotiation. They wanted a pay rise and felt like they deserved it. However, they had no idea how to approach the subject or situation. I put forward a range of ideas and tips some of which are outlined below. There is no guarantee that these will be the right tips for you to follow in your particular situation, however in my situation – the result was a very happy employee who had succeeded in increasing his salary by over 40%. We are also running a webinar on the 16th June - on how to negotiate a pay rise and the salary you want when applying for a new job - for Warwick alumni. Check out our speaking events for more information.
Think about your value to your organisation
How valuable are you really to your company? How important is your role? How unique are your skills and how hard would it be to replace you?
It can be easy to undervalue what you have to offer. Spend a bit of time thinking about the responsibilities that you have and the tasks that you do and how reliant on you people are at the moment. Would it be easy to hire someone new and to train them to do what you do currently? How do you compare to your colleagues and peers? Often it is easy to believe that you are at the mercy of your organization, however, many of us actually have more ‘power’ and ‘control’ than we think.
Be careful not to become overly confident though. Some organisations are set up to treat people as ‘dispensable’ resources, so if you get on your ‘high and mighty’ it could be easier for them to get rid of you than keep you. This is more about identifying what you bring to your company and role given your experience and skills. Spending a bit of time getting clearer about your specific talents, strengths and interests could help you to appreciate your asset-base more and hence your full value.
Know the market rate
Find out what other people in similar roles are on. Check out job boards and benchmark your salary against the market rate. Try to get a good idea of what is ‘normal’ for your industry and for your type of role. If you were to leave where you are and go somewhere else, what are you likely to get? What will you be aiming for? What could you expect?
Get inside your boss’ head
In order to negotiate well, it can be very helpful to try and see things from your boss’ perspective. What’s in it for them? What is motivating them? What are they interested in and what do they care about?
Is it their reputation? Is it money? Do they have other concerns you haven’t noticed before that you could help them with? Do they need to build the business in a certain way and could they use your help in doing that?
It’s important to remember that the person who will be making the decisions is a fellow human being. They have needs, wants, desires, ambitions and responsibilities. Try to understand what makes them tick and hence how to push their buttons in a positive way.
If they can see that you can be helpful to them and that by giving you what you want, they will get what they want – you have a win-win.
Take your time to think
In today’s world it is easy to be impatient and to react very quickly to information we are given. In a negotiation, taking your time to think, to process information and to react accordingly can be crucial. If you are prone to responding with your initial reactions straight away, try and stop yourself from doing this.
If you are asked for an answer there and then, hold you ground. Say that you would like to think about it and that you’ll get back to them. Being put on the spot and placed under pressure to respond and make rushed decisions can result in you losing out so stay in control of the situation and make them wait. Respond when you are ready rather than caving under pressure.
Role-play or prepare for different scenarios
If this salary negotiation is important to you – you deserve the time to think about it thoroughly. You also need to be prepared for various scenarios that may occur. What will do you do if they offer you X? or Y? What will you do if they don’t offer you anything? What if they ask you about this or that?
Make sure you have at least played out the scenarios and outcomes that you can think of in your head. Think about how you might want to respond.
Know your boundaries
Think about what your boundaries are. What will work ok for you? What will be the best option for you? What are you willing to accept or not accept?
By having clear boundaries in your head, you have something to work with and you will know what in reality is going to work for you or not. Knowing what is acceptable and not can be extremely powerful. It can also result in easier decision-making because it is clear what you are after and also what would make you feel de-valued and ultimately unhappy.
Think creatively about what is useful for you
Salary can be in the form of a cheque in your bank account each month, however, that does not have to be the end of it. It can often be useful to think more creatively about the options and opportunities available to you. There are many ways that you can be remunerated and rewarded for your efforts. Thinking about this and being flexible about it will also help your employer to accommodate more of what you want. It may also end up being better for everyone in the long-run.
What about expenses – travel, equipment, software? What can be done to help you with these?
What about your health – do you care about that? Do you go to the gym, have medical bills to worry about?
Do you want to have a piece of the pie? What about equity or options?
Go for a non-rounded number
Usually in most salary negotiation books I’ve read, one will be advised not to let on what salary you want. If possible it tends to be considered optimal if you are the one to tease out what might be possible and offered to you rather than you setting an amount in stone.
However, in some cases this isn’t possible. You may simply be asked to give a figure and that’s that! So how do you come up with a figure? Well knowing what you want, what you are willing to accept or not, knowing what the market rate is, what your value is – all comes in to it. Then there’s the point where you need to pick a number to settle on. At this point – the person we worked with decided on a rounded number. They said – “that’s what I’d like to ask for and then if they take me down, I’ll be happy with X amount or Y amount minimum”. Ok, so that all seemed logical. There were certain boundaries set and an assumption that he would be negotiated down was accounted for. However, in going for a rounded number it occurred to me that surely that makes it very easy to shave off at least £5k or so – simply to get to another neat number. My suggestion here was to settle on a non-rounded, non-neat number i.e. something that feels and is a bit more calculated. Basically that means avoid the 5s and 0s.
As mentioned at the start, these tips and tricks may not work for you. They are just some suggestions and ideas that worked for us in the particular situation that we worked on.
If you’d like more help with this feel free to contact one of our guides by filling in our ‘free consultation’ form.
Author: Nisa Chitakasem, co-founder of Career Consultancy, Position Ignition Ltd
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