5 Effective Tips for a Successful Salary Negotiation
Better opportunities and pay are some of the top reasons professionals switch jobs. An increase of 20%–40% on the current salary package is considered attractive enough for a new job. When you apply for a job with the expectation of better remuneration, you should know your target salary and if the potential employer would the number. You must keep the expectations reasonable and realistic for negotiation to work in your favor.
Be ready with a salary range
You could find many stories among your network where employees get more than they asked for, and while such cases could be rare, most companies offer packages commensurate with your education, qualifications, current salary, and niche skills. Usually, a job posting may mention the salary range, so work on a figure around that. Companies may pay more if they find you rather than select you through a normal interview process. Regardless, look up salary comparisons and competitive pay for the position you want and arrive at a figure or range considering your skills, education, and experience.
Ensure communication with the recruiters
Maintain a friendly yet formal relationship with the HR team and your direct superiors. By the time your reach the stage of salary negotiation, you may have built a rapport with your department manager or your hiring manager. You may also learn more about the role and why it is important for the company. Remember that they may be interviewing more than one candidate simultaneously. It is best to avoid being aggressive or impatient. You should keep the tone of the negotiation positive and polite.
Don’t rush into disclosing expected CTC
Most companies may give you an offer letter after a couple of rounds of interviews. Wait for their offer rather than quoting a salary in advance. You may be disadvantaged if you quote a figure that is less than what they could offer. It could be detrimental also if you quote an amount that is way beyond their budget. Maintain that you will begin negotiations only after you receive an offer letter or an exact number from the recruiter. Go through the offer letter, study the breakdown of different salary components and understand the increase in each component.
Be prepared with a counteroffer
A candidate can make a counteroffer if the salary offered does not match their expectations. Use the expected salary range as a basis, highlight your skills and achievements, and explain why you think you deserve better compensation. You can quote a slightly higher figure that gives you some leeway for negotiation. Typically salary can be further broken down into components: basic salary, house rent allowance, special allowance, travel allowance, vehicle allowance, special allowances, and incentives. Apart from the salary, consider negotiating benefits like insurance, pension plans, paid vacation time, incentives, and bonuses. Some companies offer lucrative bonuses and incentives that make their salaries attractive. Quote an amount with the break-up; this indicates to the manager that you have the required data and are serious about further negotiation. Rank the different components in order of priority and negotiate one by one if they seem open to it.
Be ready to walk away
Hiring managers may be aggressive and ask you to accept the offer within a limited period, indicating that the offer won’t last long. However, you should not panic; instead, use the time to negotiate further. You can budge slightly from your expected CTC and persuade the hiring manager to modify their offer. It typically takes two or three rounds of negotiations before you and the manager arrive at a number agreeable to both parties. If you are happy with the offer, do not negotiate for the sake of it and waste time. If the company is not open to negotiations, you can consider the offer or give your candidature up. Some companies may later agree to your counteroffer if they are unwilling to let you go.