Negotiating a better package for your new job
Although many graduate training schemes have set starting salaries, there are loads of other jobs where you’ll need to exercise your negotiating skills. When you are offered a job, you have a unique opportunity to position yourself as a valuable asset in the organisation and to set your level of remuneration accordingly. To achieve this, you need to establish an appropriate asking price – and it is wise to think about this early in case it should come up during your interview.
What's your price?
On the one hand you don’t want to oversell yourself and price yourself out of the market, on the other hand you need to avoid selling yourself short, as it’s extremely difficult to change your position significantly once you’re in a pay structure. Some people have spent the first few years in a new job trying to make up the gap between their salary and colleagues' in the same role.
There are no hard and fast rules about how and when to conduct your negotiation. Every situation is different and each employer will have their own set of thresholds. Understanding the context in which your negotiation is going to take place and being sensitive to the culture of the organisation is therefore essential. Having said that, there are some practical steps you can take to position yourself sensibly.
Research the employer and the market
Research before entering the negotiation. Familiarise yourself with the company itself, as well as the range of salary and benefit options on offer.
When you are going for a job, you are effectively a salesperson promoting a product and it is up to you to demonstrate that the ‘product’ is valuable, high quality and superior to anything a competitor could offer.
Potential employers or ‘buyers’ are looking for the best value for their money, so will be driving the deal in the opposite direction. However, if you have positioned yourself well and made a good impression at interview, they won’t want to risk losing you and will be prepared to settle at the top of the market rather than at the bottom. If you know what the employer can afford and typical salaries for the sector, you will automatically gain an advantage.
Five tips for researching your salary
- Look at the range of packages offered for similar positions in the adverts online or in the jobs pages.
- Ask for advice from people in your professional and personal network.
- Ask a contact in the industry to advise you – or use his or her own network to access the information.
- Approach your local Training and Enterprise Council.
- If you are a member of a union, they will have information on acceptable salary ranges for your profession.
You can put off a prospective employer by pitching too high or too low, so it is important to get your level right. Get a feel for the market rate by drawing information from the above sources. You will also find listings on the internet that can help you.
Discuss salary as late as possible
It’s best to leave salary discussions until the point at which you are offered the job. However, it is not always the case that this will be left to the final stages of the process.
Many recruiters ask for salary expectations and details of current salary early in the process. Some even screen people out on this basis. If this is the case, you may need to spend some time researching the question of salary at the application stage or before the first meeting. This will require you to think about your aspirations and to be absolutely sure of the territory you would like to tread, the experience you would like to gain and the context in which you would like to work.
If you are forced to answer a question about your salary hopes at the beginning of the recruitment process, have a figure ready that is at the higher end of the scale. You can always supplement this with a request for a particular benefits package.
If the salary offered is less than you had hoped for, you can discuss the benefits package and make provision for an early salary review. If you have a job already, don’t assume you’ll be offered more than your former salary – especially if you’re competing with someone who is equally qualified but willing to work for less.
Consider the whole package
Make sure you check out the salary package, not just the number of zeroes on your payslip. The extra things an employer offers may be worth more than their weight in gold, but they might just be thrown in to make the company seem more appealing.
Some employers have fixed-scale salaries in which case there is little room for negotiation. However, you may find that the total package of pay and benefits raises the worth of the salary to an acceptable level. For instance, you may be offered private health cover, a non-contributory pension, a fully financed car and/or significant bonus potential.
You may be able to negotiate a cash equivalent in place of a benefit, particularly in a smaller organisation that is more flexible.
When bonuses are mentioned, you may want to discuss the basis on which the bonus is paid, so that you are absolutely clear about the terms and conditions attached to it. Some bonus schemes spread the payments over several years as an incentive to stay with the business. Such complexities can be very off-putting.
Remember the tax implications. All the benefits included in a package are taxed as benefits in kind. For example, on company cars and health insurance. Find out more about using our benefits jargon buster.
When negotiating, be persuasive and consistent in your arguments but be prepared to compromise.
Explore the boundaries
Adverts sometimes carry salary ranges to give applicants an idea of the boundaries of the negotiation. You can be sure, however, that the negotiation will start at base level.
If you find that the employer is not responding to your sales pitch, you could negotiate an early pay review instead: for instance, if you demonstrate your worth against certain criteria in the first six months of your employment, they will agree to a particular salary increase. Ensure that the criteria are clearly set, though, and that they are included in your contract of employment.
Some adverts state that the salary is ‘negotiable’, the onus is then on you to move in with an offer. Again, try and leave it to the end of the recruitment process and be sure that you have studied the equivalent packages for the type of role and industry sector you are applying for.
If you are successful in your negotiations, ask for the agreed terms and conditions confirmed in writing ASAP.
When negotiating for a package, try to do it calmly and assertively.
Appearing too eager can defeat your negotiation. Being too laid back or diffident can portray a lack of professionalism or overconfidence. Either approach can damage your case.
Three common mistakes in salary negotiations
- Not doing your research. It is a common, misguided belief that requesting a high salary will convey a greater sense of your worth. The prospective employer will naturally ask you why you think you are worth so much. If you don’t have a rational argument, you will look ill-prepared and unprofessional. Time invested in research is always well spent. In this way, you can argue your case logically and professionally.
- Bluffing. Don’t bluff in your negotiation and try to play off fictitious job offers against the real one you’re hoping to get. Employers generally don’t respond well to this kind of pressure, and instead of receiving a speedy offer, you’re likely to be left with nothing. However, if you do genuinely have another offer, be candid about what you are being offered (without giving away the other organisation’s name).
- Being too interested in the package. Beware of seeming more interested in the package than in the role you are being recruited for. Every employer knows that you will want a fair deal, but you need to demonstrate that your financial concerns are balanced by a genuine desire for the job.