Negotiating Compensation and Benefits
The time has now come for you to negotiate the conditions of your employment so that they at least match your expectations. Salary negotiations always are a matter of a compromise. Most of companies use an exact formula or table to calculate salary and benefits according to each position within the company. Thus negotiations are usually only possible within this framework. For some positions, usually at top managerial positions, so called “green field” negotiations are possible.
Prior to negotiating your new salary, inform yourself about salary levels at similar positions, in similar companies and if possible in the same region. Advertisements for similar positions can be a good source of such information. To properly negotiate compensation, facts such as education, experience, the number of reporting employees, place in the organizational chart, etc., must be factored into the equation.
Begin the discussion of salary and benefits at the end of the interview, ideally after the job has been offered to you. Before you formulate your expectations you should know what is expected from you at the position. If the recruiter or your future manager asks you the question “How much do you want to earn?“ at the beginning of the interview, simply reply “Before I can answer that, I would like to know the extent of my responsibilities at the position.”
If the topic of salary is not brought up, even after the job offer, you must take the initiative. This may be a test of your self-confidence and ability to negotiate. Before you reveal your expectations, remember to take into consideration career opportunities and the educational policies of the company. A career at a well recognized company may be worth a lower starting salary, because its value is elsewhere. This kind of job can be a great launching pad for a career that could pay off handsomely in the future.
Try to be a good negotiator. Make the person interviewing you want to “buy” your skills and experience before then tell him the size of the salary you expect.
Here are a few useful rules for successful salary negotiations:
- Do not give an exact figure. You have to be flexible during salary negotiations. If you ask for too much, you might not to get the job. If you ask for too little, you might get short-changed or give the impression that you underestimate your abilities. It is better to give a broader salary range and let the interviewer offer you a salary within this range. Ideally, both the candidate and the company have the feeling they achieved what they wanted even when making a compromise.
- Always speak about gross salary.
- Think about salary development, not only about the starting salary. Before you agree on a salary, ask to know how often and under what conditions your salary will be reviewed. It’s always easier to gain an advantage during the recruitment process than to get a pay rise few months later.
- When stating your expected salary level, also consider further benefits offered by the company and factor them into the overall package.
If you are already employed in a company and you feel your salary does not match your performance and results, you can ask to renegotiate the conditions of your employment. Don’t be afraid to push for a higher salary if you feel you deserve it? After all, it’s “the squeaky wheel that gets the grease.” Just remember to keep your demands within reason.
- Ask for a pay rise when you have capped off a string of long-term good results. Another ideal opportunity to ask for a raise is after an unexpected positive result.
- Negotiate your pay rise with your manager when he is in a good mood. If your manager just has just returned from a meeting with his director, who ordered him to cut 20% of the budget, you might not have much of a chance. It is better to wait until he has been praised for the performance of the whole department.
- Make sure that your manager has enough time to consider your request. Ask him in advance to meet with you and adjust your schedule to fit his. Don’t ask for a pay rise, when your manager is running off to a meeting.
- An opportune time to negotiate a significant pay rise is right after a regular performance evaluation. With a good strategy you may be able to negotiate a very advantageous raise.
- Do not try to negotiate a pay rise on a Monday. This is usually the busiest day of the week and chances are that your manager has a whole slate of meetings to attend. Negotiating a pay rise before your manager’s long-term absence, (i.e. before a business trip or vacation) should also be avoided.
- Give yourself room to negotiate and prepare yourself for a possible retreat. Speak to your manager about a salary range you would be satisfied with rather than asking for a set sum. Your manager may be unwilling for unable to rise your basic salary, but you may still be able to negotiate a better car or other benefits such as an education program.
- When asking for a pay rise, never use a colleague’s higher salary as the basis for your argument. Moreover, avoid citing personal problems as reasons for the pay rise. Instead, let your contribution to the company speak for itself.
- Write down all your reasons in asking for a pay rise in advance. Be ready to talk about your recent accomplishments and don’t be afraid of show your ambition. Demonstrate what you have to offer in the future and explain why the company should invest in you. Finally, save the strongest reason for a pay rise until the end of your negotiations. Depending on the strength of your case, you may be able to keep that ace up your sleeve until your next negotiation.
- Be realistic and consider the overall situation within the company. If the company is having financial problems, you might reconsider asking for the raise in the first place.