How to negotiate your salary in 2023
A salary negotiation is a very important part of one's career. Therefore, it is very important to learn how to negotiate your salary. Doing a job but not getting compensated enough, is harmful to your career and can lead to stagnation. But salary negotiation is not easy for everyone.
It is a difficult conversation to have and does require some skill to perfect. That being said, it can be learned like any other skill.
What is salary negotiation?
Salary negotiation is a way to ascertain a fair amount of compensation at which you would be willing to do a certain job and your employer would be willing to match it in monetary terms. It is basically the monetary worth of your labor and the negotiations mean that you and your employer are trying to find that number which satisfies both the party. The discussion, therefore, is purely a business transaction and the best negotiators are those who take it as such.
What are the components of salary negotiations?
There are mainly three components to it:
- Your actual salary, the amount you get in hand.
- The indirect monetary parts like the PF contributions, allowances, non-monetary benefits etc.
- The future where you discuss the appraisal structure, the review practices, and job expectations.
Overall, this part of the process encapsulates a lot of your job requirements.
Why do people dread it?
Even the best of us may know our jobs perfectly but feel uncomfortable when it comes to negotiating salaries. On the one end, we fear losing out on a job if we demand more and on the other hand, we feel that we deserve that extra salary for the value we would be adding to the company. The uncertainty lies in the space which exists between ‘how much do I deserve?’ and ‘how much should be acceptable to me?’ Most people settle for less as they accept the ‘acceptable offer’ instead of discussing their actual worth.
What really happens?
Most companies understand that the potential employee would negotiate their salary and they are prepared for it. If they see value in the applicant, they do increase their valuation to acquire the talent. They even expect you to negotiate. It is often the applicant who, for one reason or another, either does not negotiate or accepts a lower offer.
Why this process is important?
Salary negotiations on your terms are important because it gives you a fair estimate of your market value. It gives you confidence in your own abilities and skill. It puts you on a growth trajectory which is crucial for your future. And it impacts your growth in the company itself.
So, how to negotiate your salary?
Practice your pitch
As we all know, practice makes perfect. It is important that you pitch your requirements well to the manager, and that you are confident with your pitch. So to negotiate your salary, it is important that you practice your points in advance, do it with a friend or a family member, before you go meet with the concerned person. When you practice your speech for the first time, you may fumble or be unsure. There are the places you need to prepare before you meet the manager. Make sure your confidence levels don't drop as you practice your speech.
Know how much to ask for, beforehand
While we all want a lot of money in our lives, it is important to be reasonable, so as to not lose out the job opportunity with bizarre demands. Keep a minimum figure in mind, add a couple of more grands to it, and negotiate your salary. Make sure you have positive skills and the confidence to justify the figure you're asking for. Know what is the going rate for the field you are in, for the company size, as well as for the location you are looking at. Come up with a number, and stick to it as far as possible.
Sound confident and enthusiastic
Once you have an amount in mind and have practiced your pitch, the next thing is to up your confidence and enthusiasm levels. It is important to sound confident and enthusiastic in the request that you make, as well as be reasonable about the amount, in order to convince them to accept your conditions. Show that you are excited about the job, sound confident in justifying the amount you are asking for, make your speech and stop.
Don't go back once you have made your request
It is important to know where to stop. It is the job of hiring managers to bring down the amount as much as they can, for which they will try their level best to manipulate you, point out at what's missing in your profile, or how they are "not in the position" to offer you more at the moment, and how they would like to first see your performance before giving you what you're asking for.
For this reason, it is important to practice beforehand. Keep some obvious questions in mind and practice their answers. Try not to budge too much from your request, as it'll show them your desperation, lack of confidence, or how easily you could be manipulated. Be patient, and let them talk once you have made your pitch.
Do not be in a rush to say ‘yes’ or ‘no’
It is important that you keep the salary negotiations going. If they say no, try to find out why they say so. See if they would like to offer other non-monetary benefits and if these would help you. In most cases, they will first say no to your request, so keep a margin in mind. A company would only ever say yes to a candidate's request, if they are absolutely confident about your skill level and hiring, and know that there is enough return value for them to invest in you.
Do not give in all your history
At many companies, they would ask for the payslips of your previous companies and base your salary on your last payout. They would offer a certain minimum percentage of hike based on the last three months of payments you've received. Try and avoid divulging that personal information as much as possible. If you're asking for a raise in your current position, show them what all you've done in the past you are looking for a hike in your salary in your current company, make sure you point out at all the work you have done in the last year, or whatever time period you are looking at. Provide them with evidence of the work done to show them that you deserve what you're asking for, and give them points of how you'll contribute in the future, to further validate your asking for a raise.
Be professional, not emotional
Do not forget your professional boundaries while you negotiate your salary.
- Try not bring in any personal equations that you share with them, or bring in any personal sob stories for which you may need a raise.
- Do not get defensive with your skills, work, and personality.
- Never threaten to quit if you don't get a raise. If it is a new job, do not rush to say yes or no immediately. Check how much you can compromise on before you give a final answer.
- Do not get dramatic, anxious, or angry.
Even if they agree to your request, it may not meet your demands completely. Choose carefully if you wish to negotiate further or let the opportunity go. If you feel the money being offered does not meet your expectations, or is not worth the effort and work that you will be putting in, SAY NO. Do not panic. Do not look at it as a conflict.
Whatever the situation and company, never feel afraid to ask what you want, just remember to do it in a polite and best possible way. Also, never apologize for asking for a raise or more money when negotiating a new job offer. It does matter a lot and you need to be ready to negotiate your salary.