3 Step Guide to Salary Negotiation

Salary Talk

Salary TalkAfter getting past all the job search & interview hurdles, you emerge as the preferred candidate, only to realise that the offer carries a lower-than-expected salary.

What should you do in such a situation? Quick pointers for when you sit down to negotiate your next salary.

Believe in your worth, even in a slowdown.

Wondering if you should negotiate a higher salary when opportunities are not that easy to come by? Assess your bargaining strengths realistically, but don’t discount a significant advantage that is already on your side when you reach the negotiating table. Zeroing in on the right candidate for a high-profile job is a long-winding and fairly expensive process. After investing time & money to identify the right person for the job, the HR team is looking for a win-win situation and is not keen to walk away from the perfect candidate.

The chances are they will be open to your saying that it would be great if they could evaluate the overall package, so go right ahead even when the economy is in slowdown mode.

Negotiate – but not just the base salary

Compensation includes more than just the base salary. The list of possible benefits gets longer as employers get creative about compensation – annual bonus, joining bonus, insurance, overtime policies, employee discounts, stock options, relocation expenses, loan policies… Even when your base salary remains non-negotiable, new benefits included in your package can provide a strong financial incentive to sign on. The split between fixed and variable pay is also usually up for negotiation.

An often missed out aspect: negotiate the timing of your first salary hike in the organisation. Instead of waiting for a full annual cycle, ask to be evaluated after six months and get an increase based on your performance.

Make the right opening bid

So what should the opening bid be? While you have the right to state your expectations, the number you put on the table should not be a deal-breaker. It’s a good idea to research current salary trends, industry prospects and the company’s financials. Check salary details mentioned in the job post or review the job description that the recruitment consultant sent to you. Then, decide the minimum CTC acceptable to you as well as the number you want to put before the employer. It’s important to get the numbers clear in your mind before the first meeting as the salary discussion can come up suddenly, catching you unawares.

An increase of 20-30% from your current CTC is what most recruitment professionals will use as a benchmark: their sweet spot is an offer that is strong enough to tempt you but is not extravagant.

Salary negotiations have a lot to do with correct timing too. It is not a good idea to bring up the topic at the very first interview but better to take the cue from the employer. Assess the situation and consciously pick the right moment to talk about the salary package. When it comes to this sensitive negotiation, handle with care!

Let’s talk careers. We’re keen to hear from you.

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7 thoughts on “3 Step Guide to Salary Negotiation

  1. HOW TO COPE UP WITH THE SITUATION WHERE YOU ARE CURRENTLY UNDERPAID ? AND ALSO THE SITUATION WHERE YOU GET A CALL FROM THE NEW OFFER AND WITHIN A MONTH OR SO YOU WILL BE SURELY GETTING APPRAISAL AT OLD PLACE TOO ?

    1. This can be a tough situation and the best is to try and negotiate a one-time increment on the back of a strong performance. As regards, when you get a job offer around the time of the appraisal cycle, many companies will factor that in at the time of making you the offer. If that is not the case, we would still suggest you accept the offer if it meets the criteria that set you out on your job search. All the best!

  2. Will Like the Head Honcho team suggest to me that to move in a CEO bracket what would be the acceptible “package hike” for me ? if some one can call up and guide most welcome .

  3. Will you please guide if,one becomes a victim of mass retrenchment at top levels ( GM and above ) due to financial crisis during slow down period, for almost a year, should one compromise with last salary and to what extent OR still asking for same salary or 15-20% hike.

    1. Our suggestion is to move back into the corporate sector at the earliest even if it means a compromise. In a soft market, companies find talent more easily – even exceptional talent – eroding the bargaining power you have.

  4. Dear Head Honchos team,

    I have been a HR generalist myself who has had a break of 4 years due to personal reasons. How would you suggest a “salary negotiation” or a “lucrative deal” for a person like me keeping into consideration the huge break in one’s career.

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