Negotiation of compensation is an activity all professionals have to handle and that too multiple times during their professional career. While everyone is not trained to negotiate, you can still follow some standard practices while dealing with the process. Compensation is only a small part of the much more elaborate offer letter/employment contract, but understanding and deciphering that is a separate matter altogether.
One has to understand that employers also put in sufficient research and analysis while working the compensation package, armed with annual salary surveys, bench-marking data and competition analysis, before the offer is ever made.
It is logical to assume that it is in the best interest of the organisation to ensure the compensation offer is competitive both internally and externally so as not to disturb the internal equilibrium while at the same time able to attract the best talent at a reasonable cost.
Just remember that negotiating for yourself can be quite emotional and one should follow these simple steps in the negotiation process to achieve a desirable result:
Understanding the role: It pays to fully understand the job. It is essential to completely know the responsibilities, requirements, and expectations for the position. Only when you get the full gist of the role, you will be able to start the negotiation process.
Research and gather salary information: It may take some time to conduct the research to gather the data on the average salaries and salary ranges for similar jobs but that is a critical piece of information. An Executive Search firm can help you with data relevant for your industry and experience level.
Prioritise your requests: This can fall into three categories, deal-breakers for you, minor issues and deal-breakers for the company. Employers don’t care that your salary won’t cover your mortgage payments or college tuition for your children. Negotiate only based on solid research and the value you bring to the organisation.
Understand and appreciate various components and aspects: The compensation is only a part of the contract, there are other important elements of the contract, recognise them and leverage these other elements to reach your end goal. If the salary is too low, focus on that. If salary is non-negotiable then focus on modifying other items such as signing bonus, earlier performance review, relocation expenses etc. Instead of negotiating the entire offer; you need to choose your one or two battles carefully.
A better title: Sometimes a better title is a far superior option than increasing the compensation; it sets you up for success for the next role.
Don’t sell yourself short: Many candidates make the mistake of selling themselves short. This trend is more noticeable among women candidates as research studies have shown.
It is important to remember that during the compensation negotiations, you must demonstrate your continued interest in the role and the organisation. At every step of the selection process, you have to be careful to strike the right chord and it shall help you get the desired outcome. All the best to you.
The author is Managing Partner of Hunt Partners