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10 pointers on negotiating your salary when switching jobs
If
you didn’t bag the best compensation in the market when you switched jobs,
don’t worry. Here are some of the common mistakes you can avoid while
discussing your salary with a potential employer
1 Accept initial offer and lose 1 crore
Always, always, always negotiate. Women and
first-time job seekers are more prone to accepting the opening offer
without questioning it. A 10% salary difference in the first job with a CTC
of 4 lakh represents a lifetime loss of over 1 crore, assuming a 15% annual
hike over a 40-year career. So, politely restate your case and provide
justification for a revised offer. In over 95% of the cases, the employer
has not made his best offer right away and is expecting you to negotiate
upwards. As a ballpark, ask for a 10% increase.
2 Do your homework on position & firm
Thoroughly research the market and the firm. In
negotiations, as in war, the better prepared side wins. Never approach a
new employer without finding out the standard market salary for the
position offered based on your experience and qualification. Start with
online research, and then talk to professionals and recruitment
consultants. You can also speak to people in the company to have an idea
about the latest state of its business, operations and the compensation
structure. Use this data to justify your stand.
3 Don’t use last salary or financial need as pegs
Focus on the value you will bring to the
company. Most professionals are browbeaten by the firm’s hiring manager,
who will peg the new offer to your last drawn salary. This is usually
underselling your competence since it does not give you a fair market
correction. Similarly, do not negotiate on the grounds of how much money
you need. Convey the value addition you will provide to the profile and
firm, and why you deserve a better deal.
4 Have a back-up plan
Know your options if you choose to walk
away from the offer. Only if you have a back-up
plan can you negotiate without fear and take a stand on a fair compensation
structure. This is the reason it’s not advisable to quit a job before you
find a new one. In today’s challenging job market, a few months of savings
or an alternate source of income will do wonders for your confidence during
the negotiation process.
5 Let the employer start salary discussion
Let the employer talk about salary first. Most
newcomers make the mistake of initiating the compensation discussion early
on in the game. This exposes your inexperience and sends a negative signal
that you are concerned only about the salary, not the profile. On the other
hand, if the employer makes the first move and quotes a figure, it sets the
floor for the negotiation and the final salary can only be negotiated
upwards from there.
6 Don’t be eager to share information
Be miserly about sharing salary details
initially. Knowledge is power, more so in a negotiation. So, don’t be in a
hurry to pass on information about your past compensation, precise
expectations about salary, bonus etc. Focus on discussing your
achievements, proposed job profile, and your fit with the position and the
company. The more you delay it, the greater is the time that the firm is
investing in your hiring. This usually translates into a better job offer.
7 Only accept a verbal offer
Get every commitment in writing. If the
hiring manager makes a verbal one—review in six
months or a guaranteed 20% bonus—it has no meaning. If the firm is
reluctant or slow in making its promises in writing, treat it with
suspicion. The firm is either looking at a stronger candidate or has no
intention of following up on its promises. Do not resign from your existing
job till you have signed a written offer.
8 Avoid wrong advisers
Trust either your own research or independent consultants. The hiring
manager’s advice to you about the ‘great’ offer is a clear conflict of
interest. So is the advice of the recruitment consultant who is dealing
with you. The inputs from inexperienced negotiators like your friends often
miss the point and focus on power play instead of creating value. So,
conduct your own research and seek inputs from consultants not related to
the ongoing hiring process.
9 Refuse instant rewards
Invest in delayed gratification. If the hiring manager throws in a 1.2
lakh joining bonus to sweeten the deal, recognise that it will not be there
next year. So, your take-home salary in the second year will be lesser.
Instead, ask for a 10,000 monthly hike. Though there won’t be any instant
cash, the cumulative benefits will be much more, as also permanent.
Similarly, the new job should add long-term, permanent value to your career
and not be a fresh start for the sake of compensation.
10 Don’t show desperation
Rehearse your lines to avoid showing your need. As in a dating game or
a sales process, any hint of desperation swiftly kills your ability to
succeed. Even if you urgently need the job, you will have to find a way to
stay calm and respond smartly during the selection and negotiation process.
Seek inputs from trusted professionals to rehearse your responses. Don’t be
in a tearing hurry to reply to e-mails and job offers from the hiring
manager. Respond as you would to standard communication.
Don’t forget the extras
• Sign-on bonus
If the employer’s bureaucratic salary band restricts him from paying
your worth, ask for a signon bonus to cover the difference. It is the
easiest solution for the employer to match your value without upsetting the
applecart. The bond for this should not exceed 12 months.
• Relocation cost
Most of the employers would be willing to consider covering your
relocation expenses if you were to take up the issue. The amount is
typically higher for senior positions, so negotiate accordingly. Check if
the reimbursement is for actual expenses and whether it is tax-exempt.
• Flexitime & flexiplace
How much would you pay for the privilege of flexitime at your
workplace? Or for the opportunity to work from home? Both benefits have a
tangible value for you. Discuss these options with the firm to make your
offer more attractive.
• Six-month review
Depending on the firm’s annual performance review cycle, the next
increment and bonus could be 12-18 months away. Ask for an early review in,
say, six months. It is not a risk for the employer, while it gives you an
opportunity to prove your worth and earn a quick salary revision and/or
bonus.
• Leave
Though often bound by rigid policies, many employers are willing to
look at special requests for paid leave. You can explore the options for a
longer maternity leave, a sabbatical in 3 years’ time, a month’s furlough
after 18 months, or simply an extra week’s leave.
Devashish Chakravarty. The writer is Director, Executive Search, at Quetzal. ETW130916
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