Step by Step guide to Jobseeking
Step Five - Negotiating an offer
So, you've sent your CV, gone to interview and are finally at the point where you are discussing salary. So, do you just accept the salary on offer or take a gamble and hold out for more?
Know what you're worth
The first step in salary negotiation is doing some research into the remuneration package you expect, as well as the current market rates for the type of role you're applying for.
The aim of your research should be to develop a clear idea of your minimum, expected and dream salary, as follows:
Minimum salary -
Whilst seemingly obvious, ascertaining your minimum salary can be tricky. Does it equate to what you're currently earning? Or perhaps it's just enough to pay your outgoing bills? Your minimum salary should basically equate to your minimum cash requirements for a role based on your circumstances. Earning less than your minimum will probably make you feel slightly cheated, and that you haven't done well enough out of the offer.
Expected salary -
The expected salary will naturally sit in between your minimum and dream salaries. But how do you calculate this? Well, looking at market rates is the best place to start. Look for job specs with similar requirements to what you're applying for and check what companies are currently offering. An average of the salary for these jobs is probably a fair assessment of current market rates, and so will be around the salary you should expect.
Dream salary -
Having done some research on what the market rates are, you're now in a position to start considering your dream salary. But what is your dream salary? Clearly, we'd all like more money so are reluctant to cap what we'd like to earn. But, your dream salary should be the most you can expect to earn given the job you're applying for and your own level of experience. Looking at the higher-end salaries for jobs posted in your chosen field, as well as the level of experience they require, is a good place to start.
Salary vs benefits package
Having set out your minimum, expected and dream salaries, you're now in a position to consider where you might have some flexibility on this. Namely, the benefits package. Whilst take-home salary is clearly important, there are other elements to consider. For example, your prospective employer might offer health care, a generous pension, stock options, free gym membership or flexible working options (e.g. flexi-time).
The next step is to consider how much flexibility you're willing to offer for all of these benefits. This will take into account the monetary value of these benefits, but you should also consider some of the lifestyle and time-saving benefits. For example, flexible working hours might allow you to spend more time with your family, whereas company pensions will mean you don't have to organise your own pension scheme.
How to negotiate
You're now at the stage where you know what you should be earning, and what room you have for negotiation. So it's time to start negotiating your offer. Your prospective employer is likely to have a figure in mind for your salary, but don't simply accept or reject the first offer. Initially, you should ask whether there is flexibility on the salary dependent on the experience and skills of the applicant. Also, remember to ask how often this salary is likely to be reviewed – taking a lower salary will be more acceptable if there will be regular salary reviews. With the salary band stated by the employer, now is the time to start comparing it to your initial salary expectations.
If the salary is below your minimum expectation, you will probably want to explain that the offer is below what you were expecting. You'll also want to explain why this is. If the package is around your expected salary, you will still want to negotiate. Explain that you may be worth more than market rates, due to your experience, knowledge or qualifications. In the event of being offered your dream salary, you will probably want to discuss room for future growth in earnings and career development.
For any of these scenarios, you should never flat out refuse a salary straight away. You should state that you ‘need time to consider the package', giving you and the employer time more time to consider your options.