Salary negotiation is a skill that any professional can benefit from if they want to earn higher pay for their work. Whether you are about to sign a new employment contract or want a raise, knowing how to negotiate a salary can boost your earnings and also enhance your employment opportunities. In this article, we discuss salary negotiations, their importance and how to negotiate a salary or raise at work with examples.
What is a salary negotiation?
A salary negotiation refers to a conversation between an individual and a company that centres on payment for work done. Salary negotiations often happen when you receive the job offer. Such conversations can occur even before that, as part of the interview process.
Related: Highest Paying Jobs In Singapore
How to negotiate a salary
Knowing that negotiating your salary with prospective or current employers is important, it makes sense to approach this with preparation. Here are ways to negotiate a salary with your employer:
1. Research average salaries
The first step to take when attempting to negotiate salaries is to research the salary range for that position. This gives you an idea of the industry average and assists you in presenting a sensible salary figure to recruiters.
There are many ways you can find out the salary that professionals in a certain position earn. For example, Indeed provides national average salary rates for different roles. You can also interview professionals in that industry to get their view on how much money you can expect for a specific position.
2. Understand factors influencing salary
Before you start salary negotiations, take the time to study the different factors that influence decisions concerning salaries at companies. Once you understand them, you can better prepare for salary negotiations.
Here are some of the top factors that influence how much salary you can earn from a position:
- Responsibilities attached to the position
- Size of employer
For example, the more qualifications and certifications you have, the higher your demand and leverage. The specific duties and responsibilities of a position can also affect pay.
3. Select an ideal time to start the discussion
If you're applying for a job, it's best to leave the recruiting manager to bring up salaries and benefits. Saying anything on the topic earlier may make it seem like you're more interested in the money than the job itself. If the hiring manager doesn't broach compensation, you can ask them about salaries once you get the job offer. Waiting until the interview process nears its end to talk about salary is advisable, as you have more leverage after proving your competence and value.
4. Adopt a flexible mindset
Approaching the salary negotiation with the right mindset is key, as it can possibly impact the decisions made in a way that is beneficial to you. Agreeing to compromise may encourage recruiters and increase your chances of securing employment. Even if the salary offer is low, there are other options to get a better deal from employers. For example, you can negotiate additional benefits like paid time off, remote work days, stock options and similar perks.
5. Give a range
When asked to indicate your preferred salary, it's better to give a range, not a specific number. A range lets you set a minimum salary figure, while allowing you to negotiate higher if the chance presents itself. Providing a salary range also makes it easier to compromise when negotiating salaries. Establishing a baseline figure increases the chance that the final figure falls within the acceptable range.
6. Avoid undue pressure
Some recruitment officers may try to pressure you into accepting their first offer; resist it and ask for time to evaluate. Think of the proposed salary package for a day or two, then return with your counteroffer. Making your decision slowly can ensure that you get the reward commensurate with your qualifications.
7. Do a mock salary negotiation
A salary negotiation is too important for you to do with no preparation. It's recommended that you practise negotiating salaries with a friend to prepare you for the actual negotiations. Practising beforehand is necessary for building your confidence, which is a good quality to have when discussing salaries. It also makes it easier to remember key talking points to bring up in the discussion.
8. Show good attitude
The right attitude is critical to success in a salary negotiation. You want to be polite, gracious and composed while hashing out compensation details with a recruiting manager. It's also important to maintain an aura of confidence throughout the discussion. A confident person is more likely to get a better deal in such scenarios, as they're aware of their value and what they deserve.
9. Craft a detailed pitch
The goal of a salary negotiation is to get a higher pay than what the employer proposed. To do this, you need to convince them you can provide value that justifies your earnings, so creating a detailed pitch is important. Highlight your unique qualities, professional experience, past results and other factors that show your value in your pitch. When they see you are the ideal fit for their role, employers may pay more than they offered originally.
10. Be prepared to leave an offer
When negotiating salaries, prepare to walk away if an employer's proposed salary doesn't match your expectations. Doing that can prevent you from getting trapped in a low-paying job. It also frees you to look for better opportunities. The salary is especially important when it comes to your first job, as future employers may look at that figure to gauge how much you are worth.
Why is salary negotiation important?
Negotiating your salary has the following benefits:
Improved job satisfaction
When your pay is lower than your expectations, you're likely to be unsatisfied with the job. However, getting adequate compensation for your efforts encourages you to put in your best at work and increases workplace satisfaction. It's even better when you negotiate the pay you are getting rather than just accepting the employer's offer.
Proper start to working in a company
Salary raises may not be as frequent as you expect—and these raises can be low. Starting out in a company with an acceptable salary ensures that you don't wait for the next raise to earn good money from a job. That can help you focus on delivering results on your role instead of looking for ways to increase your income.
Enhanced quality of life
Negotiating your way to a decent salary can have a significant impact on your quality of living. You can have enough money to cover life expenses and live comfortably, while working a job that you love. Increased quality of life can also translate to a better quality of life.
Salary negotiations aren't about money alone; you can negotiate additional benefits to supplement your salary. For example, some employees may negotiate with employers to include health insurance, university tuition reimbursement, paid vacations and other benefits in their compensation package. Negotiating all these benefits before signing your employment contract increases the chances of getting everything you want.
Related: Tips for Better Work-Life Balance
Salary negotiation examples
Here are examples of how to handle a salary negotiation in different scenarios:
Salary negotiation email example
Here is a salary negotiation email example:
I received your company's offer for employment as a Marketing Manager over the weekend and could not contain my excitement. I love working with innovative companies like Dax Energy Corp. and cannot wait to join the team.
But, before I enter an agreement, I have to address the compensation attached to the position. As evident in my resume, I have expertise and experience in developing effective marketing campaigns for companies.
I have also achieved an average of 40% increase in sales revenue for more than five companies in the past. Given my experience and skill, I am considering a salary between $70,000 and $100,000, which is higher than the proposed salary of $60,000.
I know I can add considerable value to your company and bolster the success rates of your marketing efforts. Please reach out if there is an opportunity to negotiate a salary figure that is beneficial for both parties.
Thank you for your consideration. I look forward to hearing from you.
Salary negotiation discussion example
If you opt to discuss details of your salary package over phone or in person, here is a handy script you can use:
Thank you for sending the Strategy Lead offer. I should use this opportunity to restate my desire to work with the team at Greater Business Solutions Inc. to drive performance and higher revenues. However, I'd like to discuss the proposed salary before signing a work agreement.
As I indicated during the hiring process, I have more than 20 years of experience in business strategy and planning for Fortune 500 companies. In my current role, I directed a 13-member team to craft sales strategies for a top Singapore retail chain and increased sales by 40% in just a quarter.
With my experience, qualifications and past results, I would be open to competitive salaries in the range of $150,000 and $200,000. I am willing to negotiate the final figure and can consider additional benefits including stock options, insurance and performance-related bonuses.
Thank you for your consideration.