Salary negotiation. These are two words that have the power to fill most people with a feeling of dread. Whether you are negotiating your rate of pay in a new role or looking to review your salary within your current role, discussing wages is always a delicate process.
According to a study carried out by the Society of Human Resource Management, almost 80% of those questioned didn’t like discussing money or employment terms. If you are in the majority and shudder at the thought of salary negotiation, here is some vital advice on how to come out of your next pay rise discussion with a smile on your face (and a boost to your bank balance).
NEGOTIATING A PAY RISE IN YOUR CURRENT POSITION
1. Do your research
At some point during the process you will be asked something along the lines of: How much are you looking for? And unless you are well-prepared with an answer you will almost certainly leave having agreed a figure that is less than the one you were hoping for.
To find out your market value there are number of things you can do:
However it’s important to recognise that there can be huge variation in salary according to context. Take into consideration how nuances in skills, experience, location, the wider talent market and the company in question can impact the actual salary you can achieve – a specialist recruiter can help you with this.
2. Choose the right time and place
Liz Ryan CEO and Founder of Human Workplace, highlights the following times as optimum for discussing pay rises:
In addition to this, Psychology Today suggests that Thursdays and Fridays are good times to talk about pay rises. People want to finish their workloads before the week is out – and this may well include tying up any salary negotiations with you.
Before you request a meeting with your manager, look at it from your employer’s perspective. Is it the right time for the company to be discussing pay increases? Are they celebrating recent success or have they just experienced major losses? Being sympathetic to their position, and strategically picking your moment can make all the difference.
When you’ve chosen the right time, find a neutral location in the office in which to discuss things – a relaxed manager sitting comfortably away from a desk is more likely to empathise with your request.
3. Give the (right) reasons
Your manager will expect to know why you feel eligible for a pay rise. Giving you a pay increase has to make good business sense for the firm so it’s important for you to pitch your reasoning, similar to how you would a business pitch.
Length of service does not automatically entitle you to a pay rise. Concentrate on giving reasons relating to work and not your personal circumstances – your new home, child’s university fees and so on are not your employer’s concern.
Use examples of how you’ve gone above and beyond your current role and job description – remember you’re asking for extra money for doing extra things, not the minimum. Discuss things like how much revenue you’ve personally generated or how much you’ve saved the company.
4. Have a follow up plan
And after all of this, if things don’t go to plan, set a Plan B there and then. Try not to be disheartened, simply agree new objectives, targets or goals and set a follow-up meeting to discuss a salary increase if these are achieved.
SALARY NEGOTIATIONS IN AN INTERVIEW SITUATION
Linda Babcock’s book Women Don’t Ask, revealed that only about 7% of women attempted to negotiate their first salary, while 57% of men did. Of those people who negotiated, they were able to increase their salary by over 7%. Reason enough to attempt some sort of negotiation at the interview stage. Here’s how…
1. Ask a question to kick off
“What are the company’s top priorities right now?” This type of question shows that you care about the company and its goals and also enables you to find out what is important to them in terms of skillsets. This will allow you to tailor your answers accordingly, according to Professor Leigh Thompson at Kellogg School of Business at Northwestern University.
2. Suggest an exact number
Research from the Columbia Business School suggests that candidates who use a specific number end up with a final offer much closer to the figure they were hoping for. The employer assumes you have done research into the market value to come to such a precise number. Don’t suggest a range – between £40,000 and £50,000 – the employer will always choose the least.
3. Reveal your current salary
Your new employer may ask what you’re currently earning, which can be awkward if you feel you’re currently being underpaid. Don’t lie, but include all your benefits, bonuses and the like, and then explain the kind of figure you were hoping for and why, says commercial litigation attorney Victoria Pynchon.
4. Have a walk away point
Be clear in your mind of your ‘walk away’ point – the figure you’re not comfortable dropping below. Base this on your financial need and the market value of the role.
Whether you are currently in a role or not, speaking with a specialist recruiter enables you to get a contextualised understanding of your worth, considering your skills, experience, location, the wider talent market and the company in question. Better still, if you are looking to move jobs, a specialist recruiter can help you realise how your profile relates to the pay-point of the firms you are targeting, enabling you to pitch your value at the right level during the salary negotiation process. If you would like any further advice on the salary negotiation process or are looking for a new role with better earning potential, contact us.