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Did you know that if you fail to negotiate your salary, you could be missing out on up to $600,000 over the lifetime of your career?
You could buy a Ferrari or retire to the country with that.
In Australia, over 2.2 million new jobs are started every year, and of the Australian office workers already in jobs, 44% plan to ask for a pay rise in the next 12 months. That’s a huge group of people in the position to negotiate their salaries, yet only 29% of workers actually follow through. Of those who do negotiate, a whopping 84% succeed at it, with one out of five people being rewarded with a significant pay increase of 11% to 20% of their base salary.
Does your fear of negotiating mean you’re missing out on the salary you deserve? Follow our 8-step guide to help you prepare for, and succeed at your next salary discussion. And don't forget to check out our top tips on what NOT to do when negotiating here.
Steps To A Successful Negotiation
1. Establish Your Worth
Whether entering a new job or negotiating within your current company, it is important to understand your market value before discussing your salary expectations.
When researching your market value, you should consider your job description and job title; your education, past experience, performance and skills; and the company’s location, industry, and size. Useful tools for benchmarking your market value include Payscale.com and Glassdoor.com. Your recruitment agency can also help you determine your market value, using their extensive industry experience and knowledge.
2. Know Your Desired Outcome
Knowing what you want to achieve will help you focus your negotiation towards a predetermined result.
“There is no one-size-fits-all approach to negotiating a salary. The two most important things to consider when entering salary negotiations is firstly what outcome you want, and secondly what outcome the company is looking for. If you understand this, you can work towards a win-win situation for both parties.” - Natalie Pedemont, Director, Veritas Recruitment
Before starting a negotiation, take some time to consider your desired outcome. Ask yourself:
- What is my dream salary?
- What is my market value?
- Does my dream salary align with my market value?
- What is the lowest salary I am willing to take?
- What will I do if my desired salary is not offered?
3. Consider The Whole Package
As much as having more money sounds nice, there are several non-salary rewards that can be factored into your negotiation. Not only are these vital instruments for compromise, they may also be highly sought after outcomes for you.
“Asking for non-salary benefits such as flexible work hours or professional development training is a great way to increase value for yourself and your future employer when negotiating. Flexible work hours have been proven to make employees more productive which benefits both the employee and the employer. Professional development training not only upskills the employee but brings new competencies into the company. That’s what I call a win-win negotiation.” - Georgie Stocker, Director, Veritas Recruitment
Some non-salary items you may wish to factor into your desired outcome include:
- Bonuses and rewards
- Transportation reimbursements
- The timing of your next salary raise
- Leave and time off work
- Professional development
- Work schedule
4. Timing Is Critical To Success
According to Forbes, there are four best times to negotiate your salary:
1. When being offered a new job
You should consider negotiating only once a company has seen your potential value, decided you’re the right fit for their job vacancy and made an offer. If the offer put forward by the company isn’t in line with the desired outcome you outlined in step 2, put together a thoughtful counteroffer. By negotiating your salary upon entry of a job, you are essentially setting yourself up for successful salary negotiations in future.
2. When your job scope expands beyond your initial role
As you spend more time in a role, you may find that the role grows and develops along with your skills and the company's needs. Similarly, you may take on a major assignment beyond the scope of your original job description. This is the perfect time to negotiate salary as you’re now bringing more value to the company. Be ready to outline how your job has changed and what extra value you’re bringing to the company.
3. Upon successful completion of a major project
Bargaining power often increases upon the successful completion of a major project, especially if you’re about to undertake another project of a similar nature. Have facts and figures ready to support your past successes and why you believe your efforts warrant a salary increase.
4. Three months before your annual performance review
If you're looking for a pay increase in conjunction with your annual performance review, it’s important to request the increase about 12 weeks in advance so that your manager can consider your request in line with your performance and get it approved.
5. Practice Makes Perfect
It takes guts to gather your nerves and ask for a salary increase and nothing throws you off your goal more than being unpractised for the negotiation phase.
A few key tactics to help you practice include:
- Sit down with someone you trust and role-play the experience. Don’t forget to ask for feedback
- Record yourself and watch it back so that you can find your negotiating strengths and weaknesses
- Map out all the possible outcomes and scenarios and realise the worst case scenario isn’t actually that bad. This will also help you control your emotions throughout the process
- Learn facts and figures that you can use to back yourself up if challenged
- Write down and memorise your desired outcome and the reasons why you believe you deserve the figure and benefits you're requesting
6. Know When To Be Silent
Silence in a negotiation can be extremely strategic and used to your advantage. You may feel awkward when there is a long drawn silence in a conversation but resist the urge to fill in the gaps. This is one of the main mistakes people make when negotiating - find out the other key mistakes in our guide.
Understand that salary negotiations comprise of a lot of thought demanding mental hoops that have to be jumped before the next vocal statement is made. By being silent, you are giving the other person the opportunity to think your request through. Their silence doesn’t mean they won’t accept your request and if you interrupt this process, you’re more likely to start negotiating yourself to a lower salary without them ever breaking the silence.
7. How To Accept A Final Offer
Accepting a final offer on your salary could be a definite ‘yes’ or you may decide it is not right for you. If you’re lucky enough to get what you want in the final offer, be gracious. Accept it with a follow-up request for confirmation in writing by your employer.
If you decide that it’s not the job for you, don’t burn your bridges with a simple no. Praise the company and its achievements and let the employer know that you enjoyed the interview process or your time spent working there. Being as diplomatic as possible, let the employer know that you are looking for a position more suited to your expectations, however, appreciate what the company has offered.
For those who are sitting on the fence and are undecided about whether or not to accept the final offer, express your appreciation for the offer and let the employer know that you will need time to consider it. Most employers are seasoned veterans in hiring for their teams and do not expect an immediate answer, however, be sure to indicate a reasonable timeframe where you will get back with your final decision.
8. Celebrate Whatever The Outcome
Whether you do or do not get the outcome you set out to achieve in your salary negotiations, it’s important that you celebrate the result.
“Whether you are successful or unsuccessful in negotiating a higher salary, you still need to celebrate your achievement. Having the courage to ask shows your employer your negotiation skills and ability to speak up. You probably also learnt valuable skills and lessons you can put into action next time you negotiate. Odds are, if you were unsuccessful, you found out valuable information such as the financial situation of the team or company, what skill sets you might lack, and what you need to do before revisiting the salary conversation.” - Rodney Cox, Director, Veritas Recruitment
It certainly takes courage to ask for what you want and not a lot of people have what it takes to negotiate their salary. That in itself sets you apart from the competition, so celebrate it.
A Final Word On Salary Negotiation
Although salary negotiations may be an overwhelming process to prepare yourself for, the rewards reaped are tremendous and worth every bit of effort you put into preparing for it.
To help yourself succeed in negotiating your salary, take every opportunity by downloading Veritas Recruitment’s guide What NOT To Do When Negotiating Your Salary.
Veritas Recruitment is an industry leader in helping job seekers find the ideal job no matter what position they may be in. With an honest, straightforward, and responsive approach with the candidate’s needs in mind, Veritas Recruitment prides itself on providing excellent consultations to help support and guide you through every step of the process.
Get in contact at:
E: jobs@veritasrecruitment.com.au
T: Clayton (03) 9535 2111 | Essendon (03) 9948 9499 | Melbourne CBD (03) 9058 3000 | Parramatta (02) 9891 7400
W: www.veritasrecruitment.com.au
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