Congratulations, you got the job! Now that you’ve secured the position, it’s time to have the salary talk with your new boss. Not sure how to go about negotiating a fair salary? You’re not alone.
Salary negotiation requires planning your approach, researching the compensation and communicating it clearly. When it comes to salary negotiation, it is important to consider the whole compensation package. This includes both tangible and non-tangible benefits.
Everything is negotiable.
Your best raise comes from when you sign the employment agreement. Spending time assessing your total compensation goal and your worth – what you bring to the company – could bring you an additional $5,000 – $10,000. And you can negotiate pretty much anything.
“The worst thing that can happen when you push for more [salary] is that they say no. But if you do it with grace, they will respect your courage and persistence – and if you don’t ask, you will never know what could have been.” – Anne Devereux, Chief Strategy Officer, Lantern & Founder of Parlay House.
When negotiating there is a small risk that the employer will renege on their offer – but the risk is very small.
Here are the steps to a successful negotiation:
Step 1 – Preparation
1. Do your research
Research industry trends, the current labor market and what the role might pay. Informational interviews and websites like Salary.com, Payscale, Glassdoor and Indeed can be a great help.
2. Determine the wage you want
Determine your bottom line first. Prepare a range that starts at your bottom line up. The range should be approximately 15-20%.
For example, if your bottom line is $50,000 then your range might be $50,000-$65,000.
3. Determine what tangible and non-tangible benefits you want
Tangible benefits
These are benefits that contribute to your bottom line and may include:
- Basic compensation
- Commissions
- Performance or company-wide bonuses
- Profit-sharing
- Equity participation
- Employee shares
- Stock options
- Stock bonuses
- Standard benefits
Consider what percentage you pay and what portion the employer contributes to:
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- Disability or long-term illness insurance
- Medical, dental, optical, massage therapy, chiropractor, acupuncture
- Maternity and paternity benefits – does the company have a top-up program?
- Vacation time – know your state/provincial employment standards
- Life insurance
- Relocation
Companies will often pay for you to relocate and may cover the following:
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- Moving expenses
- Living expenses while you find a new home
- Trips to find a new home
- Temporary dual residency and meals until you move into your new home
- Loss of money selling present home
- Mortgage fees and closing costs
- Immigration fees- visa’s etc (if relocation is to another country)
- Outplacement services for partner/spouse
- Professional development
- Tuition reimbursement (may be a $ amount per year – average $1,000)
- Paid courses that would benefit your role (could include travel expenses to these courses, if out of province/state)
- Other benefits
- Subsidized medical clinic on site (IDEXX provides this)
- Paid parking spot
- Vehicle allowance (can include: vehicle, gas, maintenance, insurance)
- Cell phone
- Frequent flier mileage – you get to keep the miles when traveling
- Professional memberships
- Gym memberships
- Financial and legal advice access
- Free food or subsidized cafeterias
- Free coffee/tea
- Expense accounts
Non-tangible benefits
These are the other benefits you want that are not necessarily tied to money – but impact your lifestyle:
- Flexible hours – For example: The ability to go to your child’s concert in the middle of the workday or flex time (work an extra hour per day and get every other Friday off)
- Working from home
- Office environment (consider noise, natural light, open concept)
- Short commute
- Job satisfaction – is there room for growth and change; is it the level you want (and are qualified for)
- Job responsibilities – know what the job entails and ask for clarity if needed
- Job title – important to some people, and not to others
- Company name – important to some– they want “Apple” on their resume
- Job security (not a lot of that now – but is it a permanent, temporary or contract role)
Step 2 – Know your worth
This can be impacted by what author Maryanne L. Wegerbauer describes as relative power in her book, “Job Offer! A How-to Negotiation Guide.”
Relative power considers the following:
Business climate factors:
- Overall economy and labour market in your industry
- Overall unemployment rate
- Demand for your skills and specific knowledge in your role
Company factors:
- How profitable the company is
- Where the company is in the business cycle. For instance, a start-up doesn’t have the same capital available as a seasoned business. Consider if it’s a startup, in a growth or expansion phase, turnaround or well-established and stable
Hiring manager factors:
- How long there has been an opening
- If the position is urgent to fill (one company I know had a position open for more than a year)
- Payroll budget
- Decision-making authority
Other factors:
- Technical expertise
- Level of competition
- Availability of other candidates
Step 3 – Negotiation
Now that you know your worth and what benefits you want (or know the company can offer) – it’s time to negotiate!
- Have your salary rage ready and the reasons why you deserve the compensation you request
- Be specific with what money you want. Avoid vague statements like, “I am looking for a little more money.” Or “Can you move on this salary?” Instead say something like, “I would be more comfortable with an initial salary of $55,000.”
- Express your interest and enthusiasm for the role and company before you talk money – even in the negotiation stage
- Speak confidently – practice ahead of time with a friend or family member
- Be clear about what you want – don’t be deceptive – employers appreciate assertiveness, honesty and clarity
- Focus on the positive – rather than, “No, that won’t work for me,” try “I would be comfortable with…”
- Avoid the word “Sorry” – apologizing by saying “Sorry” could signal that you are willing to accept the company’s initial offer or back down
- State what you bring to the company – speak in terms of results in the past, if possible. It’s what you can do for the company, not what the company can do for you!
- Focus on the company’s needs
- Remember to create a win-win situation. Negotiating is a two-way process, meaning you and the employer may both need to make compromises. The employer should not feel like they are leaving everything on the table, nor should you
- Be flexible. Counteroffers are often made. Depending on the company, some areas may be negotiable and others may not. For example, unionized companies may not have a lot of room for negotiating and small companies may not have a lot of extra cash – consider these factors when negotiating
- What are the alternatives? If a company cannot meet your wage requirements, you can ask for a wage review at probation – when the wage would then raise to what you originally wanted (provided you meet your probation requirements)
- Remember the tangible and non-tangible benefits when negotiating. For example, there may be room to negotiating working from home (a benefit to you, but not a cost to the employer. In fact, the employer can save on not needing to provide you a work space). Non-tangibles might help make up for salary gaps.
Step 4: The offer is made
- Thank the employer for the offer
- Stress your interest in the company and role again
- Request time to think about the offer and discuss with your partner/family etc. Asking for 24 to 48 hours is not unreasonable
- Decide if you want to counteroffer again
Step 5: Wrapping it up
Once an offer has been accepted…
- Ask for everything in writing
Whether your offer is for a contract, temporary work or a permanent position – get it in writing. Ask for all the terms to be sent in a letter of intent, employment contract or offer letter. This includes: length of contract (if applicable), wages, benefits and any other compensation (bonuses).
With preparation, knowing your worth and communicating clearly, salary negotiating could bring you more than you ever hoped for. Give it a try!
Still waiting for that dream job offer to come along? A career coach can help you get there.
(Originaly posted on Noomii Career Blog)