Ok, you’ve sent your CV, aced the interviews and you’re finally at the point where you’re discussing salary.
So, do you just accept the salary on offer or do you take a gamble and hold out for more? From the basic pay to your benefits package, make sure you know the most effective way to negotiate an offer.
Consider the salary
The first step in salary negotiation is to do some research into the remuneration package you expect, as well as the current market rates for the type of role you’ve been offered.
Consider the following three salaries:
Minimum salary
Whilst seemingly obvious, ascertaining your minimum salary can be tricky. Does it equate to what you’re currently earning? Or perhaps it’s just enough to pay your outgoing bills? Your minimum salary should basically equate to your minimum cash requirements for a role, based on your circumstances.
So, if you’re a first jobber, this may be enough to cover your costs and give you some extra spending money. Alternatively, if you’re currently working and you’re moving jobs to earn more money, your minimum will probably be at least the same as you’re earning now.
Expected salary
Your ‘expected’ salary will naturally sit in between your minimum and dream salaries. But how do you calculate this?
Looking at equivalent salaries is usually the best place to start. You should also look for job specs with similar requirements to what you’ve been offered and check what other employers are currently offering. Of course, if you’re particularly well qualified or experienced, you may well expect higher than average market rates.
Dream salary
Having done some research into what the market rates are, you’re now in a position to start considering your dream salary. But what is your dream salary?
Most of us would like more money, so, naturally, we’re reluctant to put a cap on our ‘dream’ salary. It’s easy to get carried away, but you should try and remain realistic. Your dream earnings should be the most you can expect to be paid given the job you’re applying for and your own level of experience.
Looking at the higher-end salaries for jobs being advertised in your chosen field, as well as the level of experience they require, is a good place to start. If you’re expecting a salary higher than any of the jobs you’ve seen, the chances are you’re probably expecting too much.
What about the benefits package?
Whilst take-home salary is clearly important, there are other elements to consider. Namely, the benefits package.
For example, your prospective employer might offer one or more of the following benefits:
- health care
- pension scheme
- stock options
- free gym membership
- travel schemes
- flexible working options (e.g. flexi-time)
The next step is to consider how much flexibility you’re willing to offer for all of these benefits. This should take into account the monetary value of each benefit, but you should also consider some of the lifestyle and time-saving benefits. For instance, flexible working hours might allow you to spend more time with your family, whilst the provision of company pensions scheme will mean you don’t have to organise your own pension scheme.
How to negotiate
You’re now at the stage where you know what you should be earning, and what room you have for negotiation. So it’s time to start negotiating your offer.
Your prospective employer is likely to have a figure in mind for your salary, but don’t simply accept or reject the first offer.
- Ask if there is any flexibility in the offer, as well as how regular salary reviews will take place – taking a lower salary will be more acceptable if there will be regular salary reviews
- If the salary is below your minimum expectation, explain that the offer is below what you were expecting, backing it up with why
- If the package is around your expected salary, you should still attempt negotiation, explaining how your experience, knowledge and qualifications position you in the market
- In the event of being offered your dream salary, you’ll probably want to discuss room for future growth in earnings and career development; remember, although this is your dream salary, as you progress your expectations are likely to increase
For any of these scenarios, you should never flat-out refuse the offer of a salary straight away. You should state that you ‘need time to consider the package’, giving you and the employer time more time to consider your options.
Know when to back out
There are clearly a number of considerations when deciding whether to accept an offer from an employer.
- Don’t solely consider salary: take into account other considerations, such as benefits, working hours, work culture, the job itself and room for career development
- If the salary is not what you expected and is not compensated by additional benefits or career development, you should say so; if this is not then reviewed by the employer, you’ll probably need to accept that the job wasn’t right for you and move on
Remember, if you’ve done your homework, you should know what you’re worth, so you should try your best to make sure that’s what you earn in your next job. Whatever happens, don’t sell yourself short.
