The Ultimate Tips for Salary Negotiation

A better understanding of salary and its components help you to negotiate salary effectively. As most of us think, salary negotiation does not end at the monetary part. Let us analyze the definition of salary and effective tips for salary negotiation. 
    Employees receive compensation in return to their contribution to the progress of the company. Though there is a hand full of components of compensation, salary takes a prominent role.

    20% EFFORT

    A small effort makes a huge difference. What extra effort can you make to effectively negotiate your salary?
    • understand the components of salary and importance of non-monetary compensation,
    • focus on the particular components of your salary in which the company is flexible to offer higher benefits, and
    • calculate your expected tenure in the company, analyze the company policies, plan, and negotiate accordingly.
    Read more to find the 80% result...

    Before analyzing the most effective ways of salary negotiation, let us understand the components of compensation which varies widely but mostly include:
    • Bonus
    • Medical insurance
    • Leave salary
    • Paid leaves
    • Shares
    • Provident fund/pension schemes
    • Petrol, internet, mobile bill reimbursements, etc.
    Let us also consider non-monetary benefits:
    • Opportunity for growth
    • Job satisfaction
    • Work-life balance
    • Excellent company culture and co-workers
    • Possibilities to work from home
    • Location (your native place or favorite city)
    • Sponsored courses and certifications etc.

    Importance of Non-Monetary Compensation

    You should always consider non-monetary factors while negotiating for salary. The opportunity for growth and sponsored course worth more than monetary compensation while considering career progression in the long-run.

    The feel of accomplishment that comes from job satisfaction is priceless. Job satisfaction is great for those who have their hobby as work.

    Every one of us has some commitment and may not always be available for long work hours or work during weekends. The most preferred job is something that gives the best work-life balance. After all, we have to pick-up children from school at a specific time or should take a sick family member to the hospital for a check-up at a regular interval. No one can skip family responsibilities.

    Work from home option saves traveling time. It may not always be helpful but desperately needed at times. Living in the native place or the city you love is a gift!

    Non-monetary components of salary play a vital role in life.
    Tips for Salary Negotiation

    Job Satisfaction vs. Salary

    After understanding the importance of non-monetary compensation, you might wonder which one to choose when the options are ‘job satisfaction’ and ‘salary.’

    Every one of us has some monetary expectations and commitments. Hardly a few people get both ‘job satisfaction’ and ‘good salary,’ and the rest are bombarded between the choices.

    Every one of us has some monetary expectations and commitments. Hardly a few people get both ‘job satisfaction’ and ‘good salary,’ and the rest are bombarded between the choices.
    Job Satisfaction Vs Salary

    Lifestyle and goals are not the same for all of us and hence the meaning for job satisfaction. As long as your job pays your bills, EMI, and sends a few bucks to savings, you may consider your job is helping you to lead a decent life.

    A lot of phenomena are involved in developing metrics for measuring job satisfaction. You may create a ‘job satisfaction questionnaire’ basis the topics ‘importance of non-monetary compensation’ and ‘non-monetary benefits’ discussed in this article.

    A lot of phenomena are involved in developing metrics for measuring job satisfaction. If your answer is yes for all the given questions, you certainly will have job satisfaction.
    Job Satisfaction Questionnaire

    As per the data presented in Wikipedia, discussed in the blog ‘6 Tips for a Smooth Career Change’, the percentage of employees changing jobs for better work-life balance and other non-monetary benefits is slightly higher than those changing jobs for monetary benefits such as better salary.

    Why to Negotiate Salary?

    Companies always try to cut their costs and increase revenue. But we have our bills to pay! You know your worth, and you are giving what you have learned so far to the companies so that they reach their goals quickly.

    You are equipped to do their job, and that is why they are ready to hire you. You are a brand who can add value to the company. So sell your skills at market price and not at any lower cost.

    You have already mastered the art of Writing a Good Resume and Ultimately Cracked the Job Interview. Its time to show your salary negotiation skills.

    Salary Negotiation Strategies

    Each company has its policies. Do check online forums and find employee feed-backs, salary components, and salary range. You can negotiate any part of monetary compensation based on the companies' flexibility. For example, a company may give more shares, whereas others may not have shares in their compensation.

    Make an approximate plan for how long you will be working for the company and negotiate accordingly. In general, bonuses and paid leaves are given annually that are less frequent compared to the salary that you receive every month. While leaving the company, the chunk you received remains in your hand, and the rest may not be.

    How to Negotiate Salary in a Job Interview?

    Here comes the art of selling. You can always bid slightly above the market level. Your profile and performance have already impressed the recruiter, and that is the reason they have invited you for compensation discussion. You have to build clear salary negotiation strategies before initiating the negotiation process.

    I suggest you be confident and polite while negotiating. The ultimate salary negotiation tips are:
    • telling them the values you can bring to the company,
    • demonstrating how your skills can effectively get their work done, and
    • explaining how you can create a friendly atmosphere and increase productivity.
    As mentioned, you are offering intellectual property to them. It is not only the work hours you are giving to them today but also the time and energy that you have spared for gaining the knowledge and experience.

    80% RESULT

    As a result of being smart and negotiating with the calculated data, you will get the following returns:
    • gain long-term benefits such as sponsored courses and promotions,
    • get a higher salary and smart returns, and
    • lead a secure and happier life.

    Dealing with Previous Salary Comparison

    In most of the scenarios, HR managers propose a salary based on your current salary, which might be much less than the market level.

    You might have accepted that salary from your previous employer considering nonmonetary benefits, which you needed the most at that point of time.

    On the other hand, you might have accepted that salary a few years back which was as per the market rate at that point of time, and the company failed to give a considerable salary raise in the subsequent financial years.

    You must explain these details while negotiating for a better salary. Also, highlight the new skills you have developed recently.

    Means of Salary Negotiation

    Companies generally have salary discussion session at the end i.e., when they are ready to hire you. At times they call you for discussion in-person or may conduct it over the phone. I suggest you  choose a mean over which you have good command. If you are not good at speaking, you may opt texting / emailing for salary negotiation.

    Additional Tip

    Showing an offer from the company's competitor would make you a winner! You can confidently negotiate salary when you have a counter offer.