INTERACTIVITY
 
Salary And Negotiating Guide

Salary negotiation is always a complex affair and exceedingly crucial too, since it will determine what salary you will draw and eventually your position in today’s ever growing market.

Get what you want because you deserve it!

You have been through a series of interviews and finally your interviewers are trying to find out more details on your current salary and your salary expectations. Most people do not know how to handle this important situation. The end result may lead to a less than satisfying package, and you will wish that you could have done better and in most cases you could have!

The guide gives you an overview on:

a.  What you need to do before going for the interview
b.  What you need to keep in view during the interview/negotiation process
c.  What to be kept in mind while reviewing the offer
d.  Understanding the offer
e.  General Tips

If you are able to keep the following points in mind before you even begin with the interviewing process, you can come away from the meeting knowing that you have been able to put forth what you feel you are worth. And also ensure the best deal for yourself, without being thought of as a candidate interested only in money!


A) What you need to do before going for the interview :

1. Before you attend any interview, pen down your salary details. Don’t forget to put down all the retirals, perks and benefits you enjoy in your current company so that you are not caught unaware in case you are asked on your current compensation.

2. Research your profession's & position's salary range. Don't jump to unreasonable conclusions about your salary. These presumptions can either be higher than your true worth or even less than what you actually deserve. Find out what the market pays for a person with your qualifications and experience.

3. Find out what the company is willing to pay based on past experiences and history. Placement consultants are the best sources of information. Also colleagues and friends may prove helpful.

B) What you need to keep in view during the interview/negotiation process :

1. Do not initiate salary discussions. Wait for the interviewer to bring the subject up, even if it's postponed to the next round.

2. Do not be too hasty in accepting employers' offer, however lucrative during the interview round. Take time to think about it. Evaluate the package before making the decision.

3. Incase you are asked on a salary expectation, it is important to first convey the interest in the company and the opportunities it has to offer before discussing the expectations.  The current trend in corporates is to give a hike of 30- 40% above the current salary. However it is a very debatable topic and varies with industry, company and position at hand. There’s a simple rule one can follow - More niche the position (requiring expertise) in the market, greater its value.


4. Remember to evaluate your True Worth.  It may seem uncomfortable but sometimes we put too high a price on ourselves. Sometimes we only go by the salary pattern of the industry and ignore our own competence as a professional. One common mistake that people make is that they weigh their salary against some other people they know and insist on getting the same salary. Do not put too high a price tag on yourself without providing supports to justify the salary figure, such as previous salary history or indicators of performance.

5. On the flip side - do not make the mistake of under-valuing your worth. Be confident of your ability. Being modest does not always pay.

6. Incase you are a fresher just out of college, or with about a year’s experience there may not be too much to negotiate upon, as most companies have entry level policies. However do find out whether salary is negotiable Convey to the employer that you are truly interested in the job. Don't sound as though you are just shopping for the best salary.

7. Negotiation is sort of a wordy duel, so choosing the right words and being polite will help a lot. Finally it’s your decision on whether the offer is worth accepting or declining.

8. Silence is a strong tool in negotiations. Hold your position and count to 10. It provides room for both the employer and you.

9. Keep Focus.  Keep the discussion from being some sort of a political dialog that reaches nowhere at all at the end of the day. And don't make negotiation a matter of your ego; be considerate. Also, a salary negotiation is not all about what you expect, it's also about what the recruiters deem fit or can afford to pay.

C) What to keep in mind while reviewing the offer :

1. You can call the hiring manager and say how delighted you are to receive the offer, but you have some questions and concerns. Scripting your dialog ahead of time will give you confidence to be to the point regarding what you want.

2. Look beyond. Initially you might feel that you are denied the right salary, but getting generous increment regularly can just make up for a seemingly unprofitable deal. And to be sure that this will happen to you, you need awareness of the company's increment trend and a little bit of farsightedness. Market corrections are done in many companies to counter market competition. It is best that you do think out of the box before writing off the offer.


3. Understand what are the long term benefits the company has to offer. Many employers will provide their most valuable executives generous packages of stock options, profit-sharing bonuses, generous severance packages, along with non-financial compensation like paid sabbaticals, club membership, exposure to international markets etc.

4. Do not forget to calculate benefits as part of the compensation package. Incase you are shifting cities, compare the cost of living, housing, schooling, culture etc

5. Most companies have the concept of performance bonus which forms a part of the salary package. Understand the history of payment of bonus eg how much bonus does an average/good performer get? Is the payment monthly, quarterly or yearly?

6. Stock options are a lucrative deal incase the company is in the growing stages. Do understand the lock-in period before it can be encashed.

7. Some companies do offer a joining bonus or a confirmation bonus to attract the candidate. It is generally at senior levels. However this is also done at other levels incase the employee is losing his bonus in the current company.

8. Companies offer to buy notice period incase they are eager to have the candidate on board. So if you have a company which wants you on board ASAP, you know what to do!

D) Understanding the Offer :

Let us first understand the difference between the offer letter and an appointment letter.

An offer letter is made when the company has selected you for a position and makes an offer of a job. It is generally a one pager.

An appointment letter is a detailed document giving in the designation, grade, salary details, terms & conditions of employment etc.

Both are valid documents. Due to bulk/off-site recruitments, companies are not able to generate appointment letters, so offer letters are given first followed by the appointment letter. However it is important to understand the salary offered to you before you make a decision.


The following must be taken into consideration while considering an offer:

Monthly Salary (Cash in hand): Always the top priority. Usually consists of Basic, HRA, Medical(on bills), Conveyance, education etc

Annually payable : LTA

  • Retirals: PF, Gratuity, Superannuation, ESIC(if applicable)
  • Other Compensation: Bonuses, commissions, stock options, profit sharing, etc.
     

 
•  Perks: Car, petrol reimbursement, education reimbursement, club memberships etc  which can form a substantial part of your CTC (cost to company)

•  Other Benefits: Training, laptop, flexible working hours, credit cards, sabbaticals etc.

•  Incase of relocation: relocation expenses, schooling help, housing, travel for self/family incase relocation is out of the country

•  Incase you are given housing by the company, you are not entitled to HRA

It is important to understand the taxable components in the salary before accepting the offer. Some organizations give you the benefit of working as a consultant where the concerned person will not be on the company rolls.  And the only deduction is TDS. However in this case you will need to file your own returns.

E) Some General Tips :

1. Salaries are not always rigid. There is always an opportunity for negotiation! Almost!

2. Try not to play "hard to get" when you have little or nothing to leverage. In this situation, you will need to take what is available, albeit respectfully.

3. It is fatal to negotiate salary and benefits over the telephone. You may miss out on the expressions and body language. Most probably you will never get what you ask for!

4. It is important never to lie about your past salary history. Many companies do reference checks. It can lead to complications and create bad blood between you and the employer.

5. Be prepared for the possibility that the employer still may not change the salary offer. If the employer says no, accept the answer gracefully. You can weigh the options you have.

6. Do not keep the company waiting for your decision on whether you would be taking up the offer or not.  You might be closing doors for future opportunities with the company.

7. End at a Positive Note.  Incase things don't go your way and the negotiation ends up in a letdown despite all your efforts, don't say things like- "Your offer is too less to be accepted” and reject it outright. Be modest when declining the offer. Who knows when you find yourself up against the same individuals somewhere down the line? In any case, it's always pays to be courteous and polite!

Best of Luck!

 

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