When interviewing for a new role, how much you will be remunerated for your efforts is likely to be one of the main items on your list of priorities. Even though we don’t negotiate salaries anymore at Cutshort, most other companies do. And in our years of work with thousands of candidates – it’s the salary negotiation piece that sticks out like a sore thumb. Almost everyone wants to negotiate better, but mostly nobody does it well.
It isn’t surprising that many candidates aren’t comfortable or confident asking for more money than what is on offer as they are concerned about jeopardizing the opportunity or of appearing greedy, indulgent, or worse – only in it for the money. However, this is often a fear overblown as talented candidates should feel free to ask for the remuneration they expect and deserve rather than having to lowball their worth.
We have already seen how the pandemic and the global talent race have shot up salaries across the board. While this is good news for the candidates – it’s important to remember that negotiating a compensation package is a skill and not an evil – you don’t want to leave money on the table! Yet this isn’t as easy as it’s made out to be. Let’s dive in.
Benchmark yourself on value, not your last drawn cheque
Knowing what the market average is for similar roles is a good starting point. Do your research, comparing salaries across roles and companies in your field that require a similar level of qualifications and experience, knowing the market average in your field will help you negotiate a salary that either meets or exceeds the market average.
However, don’t over-index yourself on the market average or even your last drawn paycheck. A lot of individuals often end up taking up a lot more responsibilities with very minimal salary hikes because they are indexed on the previous paychecks that could be underpaying them.
Instead, it helps to get a sense of the value that you will bring to a company and communicate that clearly. Go in with a clear maximum and minimum salary amount you are willing to accept based on the value you bring.
Early in your career, optimize for learning: Money follows
Fresh graduates often make the mistake of confusing a good salary with a good career move. Those can be two very different things – especially at the early stages of one’s career. So, if you’re starting out, it is worth being patient and making the most of every learning opportunity that your employer presents. Prioritizing learning and experience over a high salary in your career can set you up for long-term success. A good employer will always be invested in the growth and development of their employees. As your experience grows and you add more value to the role, ask for an appropriate raise.
Don’t put the horse before the cart.
Negotiate towards a position of strength – not weakness
A lot many candidates end up over-negotiating salaries and succeed. The problem is that while excellent negotiation and talent shortage in the market can force employers to shell money beyond their means – it often weakens the position of the incoming employee.
First, it forces them to overdeliver to justify the astronomical salary constantly. Secondly, they are always going to be in the line of fire if a company’s looking to downsize or ‘rationalize’ their teams.
Third, the extra money isn’t worth the possibility of pricing yourself out of the market.
People tend to get stuck at their high-paying jobs because their learning curve doesn’t catch up fast enough and the next employer is unwilling to pay the premium.
Negotiate salary in such a way that your position becomes stronger -not weaker. Beyond salary, get employers to invest in your career growth instead.
Make a list of what you want – in addition to the salary
Salary negotiation can often include a balance between a raise and employee perks and benefits such as flexible hours to extra vacation days. Carefully consider what is valuable to you and whether these benefits can improve your quality of life more than the extra money that you are seeking. Also, carefully consider the ESOPs being offered – do not rush into accepting them without evaluating the stage of the company, the vesting schedules, and their overall reference to your personal and professional goals.
Prioritize trust over everything else
We’ve seen both recruiters and candidates adopt various strategies during compensation conversations. While recruiters want to offer the lowest possible amount, candidates are prepared to reject the first offer because they assume the recruiter is trying to convince them into accepting a lower salary than they deserve. This turns the negotiation into a bit of a tug of war with both sides really trying to outdo each other and assuming the worst.
Also read: How to choose the right startup job offer?
Instead, it’s much better to know your audience and only play the game with the right people. For instance, Cutshort adopted a no salary negotiation policy 10 months ago, having built an objective salary calculator. This has helped increase the candidate’s trust in the company, as well as led to lesser attrition. the focus has been on creating a workspace where employees are focussed on adding value and not worried about having to ask for salary increments and comparing themselves with their colleagues.
At the end of the day, salary negotiations are complex and more emotional than we would like to believe. The best outcome for both the employer and candidate is a healthy discussion that’s objective, factual, and balanced for the best interests of both parties. It is also a fine balance between prioritizing professional development over money early in your career, as well as knowing when and which company or job role will pay off the highest dividends in the later years of your career.