How does your salary stack up?
The received wisdom when negotiating your salary for a career move used to be that you might expect a 10-20% increase. At 10% you’d have done OK, 20% would be pretty good and more than that, you’d be smashing it (or very underpaid). In the last few years, the balance has shifted significantly and whilst candidates are asking for more, citing cost of living increases as a key reason, they are often disappointed with what’s on offer. Employers’ costs have also increased, margins are squeezed and much as we’d all like a fatter pay packet, it isn’t always possible to meet higher expectations. Add supply and demand to the equation and it’s even more challenging to make the sums add up!
So, if you’re looking for a new role, or a pay rise in your current one, what’s the best way to go about it?
- Setting the scene is a key step in opening negotiations, so make sure you demonstrate your commitment, enthusiasm and excitement about the role and the company, and your appreciation of the time spent in the hiring process.
- Think about your reasons for asking for more money. Cost of living is a universal challenge and is likely to fall on deaf ears, so you’ll need to present some compelling reasons for why you deserve a rise.
- Know your market – what are the averages for your role, level and location? Job titles can be misleading, so compare yourself in terms of projects you’ve delivered, size of budget managed, genuine contribution to the bottom line and number of direct reports, as well as length of time spent in role. If it’s less than a year, you’re unlikely to have extracted all the value you can, unless there are exceptional circumstances.
- Can you articulate how your work has contributed to and benefitted the company? You’ll need to be clear, confident and unemotional about your value, and be realistic in your expectations. If you ask for too much, you undermine the credibility you’ve worked hard to achieve and if it’s an external move, a misjudged request can (and does!) backfire.
- Consider the wider benefits package and what it’s worth to you. Is there a bonus, and how achievable is it? Ask what the payout has been (typically) in recent years and how the company is performing in the current year. What pension contribution will the company make on your behalf? It may seem like a long way off, but company pension contributions are like buried treasure (if you can remember where you’ve buried it, of course!).
- What is the holiday allowance, and can you ‘buy’ additional days through salary sacrifice or foregoing other benefits? Other things that you could consider are product discounts, travel benefits, free parking, gym membership and flexible working.
- Pick your moment. Don’t accept an offer and then try to ask for more money. Set out your expectations clearly at the start of the process but be prepared to accept the salary as advertised.
- Be flexible! The ability to negotiate and compromise shows maturity, good judgement and collaborative capability.
- Keep the conversation professional and pragmatic. Focus on facts, and use a calm and confident tone. Remember, it's a business negotiation, not a personal confrontation!