Posted on 4/02/2022 by Matt Fox
A CANDIDATE'S GUIDE TO SALARY NEGOTIATIONS
Our recently-published guide to managing counter offers made it clear that accepting an offer to keep you at your current company when you have an offer to go elsewhere is something you should be wary of. However, there are two situations where, as a candidate, entering into a negotiation with an employer is not only an option, it's something that's outright expected.
Firstly, there’s the obvious option: you’ve interviewed successfully and have just been (or are about to be) offered a role by a new employer. In those circumstances, you may get an offer that’s exactly what you want – or you may not. If the latter, our tips to salary negotiations below will help.
Then there’s another situation that’s almost as common. You’re in a role you enjoy at a company you don’t have any intention of leaving, but you also don’t feel you’re being paid quite what you’re worth. It could be that you’ve taken on more responsibility since your last pay review. Or that you’ve been there a long time and your intrinsic knowledge of the company’s rhythms gives you more value. Or even that your starting salary was lower than you would have liked, but you didn’t feel able to negotiate at the time. Whatever the reason, you’ll find something to help you in our employee's guide to effective salary negotiating.
First, however, some quick-fire salary negotiation FAQs to get a few key points clear
Should you ever accept the first salary offer?
Some guides of this nature will tell you no, and that you should always negotiate because it’s expected. Our more moderate advice would be that it really depends on how well the offer meets your expectations. Remember, jobs aren’t just about money. If the offer is as hoped and also comes with a role that excites you, good people you can learn from, brilliant benefits and excellent prospects, it might feel like the perfect fit right away. Take each of those factors into account, and only enter into a negotiation if one or more of them isn’t quite right.
How do you justify a higher salary?
The key is knowing what an employer would have to pay someone else to do the job you’ve been offered, or are already doing, to the level you are capable of. To ascertain this, study the job spec and compare it to open roles on the market where a salary range is given.
What is a reasonable salary negotiation?
Common practice is to ask for an increase of between 10-20%. The keener you feel the company is to acquire or retain your services, the higher you might feel comfortable aiming for. More on this below.
Can you lose a job offer by negotiating a salary?
It really depends on how you go about it, but in most cases the answer is (thankfully) ‘no.’ Employers respect that you need to do the best you can for yourself. After all, the chances are high that the person you’re negotiating with has done the very same thing for themselves at some point in their career. If you’re tactful, respectful, and realistic with your counter offer strategy, an employer is less likely to be put off by a negotiation, and more likely to see it as a normal part of the employment process.
Our Candidate’s Guide To Salary Negotiation
These are our top tips to salary negotiations, and equally helpful whether you’re negotiating around a new role or trying to improve your salary in an existing one.
1. Do your research to know your worth
As we mentioned briefly above under the ‘how do you justify’ header, the basis for any salary negotiation is knowing the going market rate for your professional skills, knowledge and experience. The key to effective salary negotiating with employers is feeling secure that what you’re asking for is realistic and achievable. If that’s the case, then assuming you’re confident in your interview ability, if one company doesn’t offer you what you’re worth, the chances another one eventually will. So, know your worth, and don’t feel too afraid to walk away; it puts you in a stronger position mentally and emotionally.
2. Don't be afraid to ask2. Don’t be afraid to ask
As we mentioned earlier, one of the top reasons people feel the need to renegotiate their salary is to make up for low starting pay caused by them not having the confidence to negotiate at the offer stage. Our second tip to salary negotiations is therefore to use the research you’ve done and be confident in asking for what you’re really worth. It might not only save you losing out on money, it might also save you more salary negotiations further down the line.
3. Prepare a list of your best relevant qualities and accomplishments
One of the biggest mistakes you can make going into a salary negotiation is focusing on what you want to get from the employer and how it might help you. Salary negotiations are all about what’s best for business – there is no room for high emotion, or explaining to your employer how a salary increase could benefit your life. (The chances are your co-workers all face similar challenges in one way or another and could use the extra income too). Instead, you need to be clear about the benefits you bring to the business.
Preparing a kind of ‘crib sheet’ of your best achievements, biggest strengths, and references from colleagues about your usefulness, all put you in a strong position when bargaining for a better salary. That’s why putting one together is one of our top tips to salary negotiations.
4. Decide on the numbers for your minimum, realistic, and ideal salaries
Going into any salary negotiation, you should know the very minimum you’re willing to accept, and be ready to walk away if you get offered under it. That doesn’t necessarily mean automatically walking away, however – it could be that you need to dig deeper to understand what else the role brings. For instance, a comprehensive benefits package, the ability to work from home often rather than commuting, and the job security of a full-time salaried role (which can be particularly attractive if you’re coming from the contracting world), can all make up for a slight shortfall in your initial expectations. If they don’t, however, then you should seriously ask yourself whether the role is right for you. After all, working hard while being paid less than what you feel you’re worth is likely to cause the kind of resentment that has no place in a person’s life or career.
Alongside knowing your minimum salary, another handy tip to salary negotiations is to also think about your ideal salary. If the job spec gives a salary range (e.g. £30-35k) this will likely be the number at the highest end of that. Your realistic salary meanwhile is likely to be a number somewhere between the minimum and ideal numbers. That’s the number you think someone of your skills and experience should be earning.
In these situations, it’s a good rule of thumb to ask for the ideal salary amount, and aim in the negotiations to land somewhere around your realistic salary number. However, always be specific in what you communicate by giving a specific number, not a range. Also, remember that this is a negotiation. Only communicate your minimum amount if the offer you’re getting is so far under it that you need to indicate a baseline. Communicating your baseline in any other situation is likely to leave you with less bargaining power, and significantly out of pocket.
Whatever number you decide to start with, make sure you’re the first one to mention it. The employer may accept straight away, but they’ll more than likely offer lower. That’s where the negotiation itself truly begins.
5. Ask questions - then fit your experience to the answers
Once you’ve entered into the back-and-forth of negotiating, it becomes time to put forward your case. That’s where the hard work with that crib sheet comes home to roost. However, one of the best ways to take control of the discussion is not by bombarding the employer with your achievements – but by subtly feeling out what they’re really looking for in the role.
If they explain to you that they’re looking for someone to excel in specific areas, and you can give solid examples of where you’ve done precisely that, you’ll be in the strongest position possible to make a watertight argument for that higher salary.
6. Know when to say yes and accept no
The final tip in our employee’s guide to effective salary negotiating involves knowing when to bring negotiations to a close. It may be that you can’t get everything you want, so what are your deal breakers, and what can you concede on? This can be the most pleasing part of the whole process, or potentially the most frustrating. So bear that in mind, and whatever you do, stay professional. Threatening to leave or take a different position won’t help you, it’s only likely to alienate the person you’re negotiating with.
It could also be that the employer simply doesn’t have the ambitions for the role that you do, and therefore isn’t willing to offer as much as you hoped. Or it could be that there wasn’t much to choose between you and their second-choice candidate at interview, and the other person is willing to accept the lower salary.
It’s important to recognise that such a situation doesn’t say anything about you or your worth, and not take it too personally. Of course, it may feel personal – especially if you’re deeply invested enough in your career to be reading this article in the first place! But having that kind of separation between your job and your own identity away from work can help you make a cool-headed decision.
Once you’ve decided, you can then refocus after the negotiation is over and redirect your energy to whatever becomes your next priority; whether that’s looking for a different role, or celebrating with friends and family about the offer you’ve just accepted!
What if you’re an employer?
This post may be titled ‘A Candidate’s Guide To Salary Negotiations,’ but we recognise that many of our blog’s readers will be looking at things from the other side of the fence.
Our quick tips for negotiating salary with a successful job candidate include:
- Tell the candidate exactly what you loved about them at interview, what they’ll bring to the company and role, and where you see the role developing with them in it
- If the offer is a little lower than the candidate expected, be as transparent as possible about the market factors behind it. For instance, if you can convey that the offer is in line with the other salaries of the team they’ll be joining, it will help address any sense of injustice they might be feeling
- Explain the full extent of the benefits package the candidate will have access to and the monetary savings they can enjoy because of it
- Finally, talk about other aspects, like when bonuses may happen, when salary reviews may be factored in, and the opportunity for promotions inside the company. If you can effectively communicate that you care about furthering your people’s careers, you’ll be much more likely to have that promising interviewee convert into an exciting new hire.