How To Negotiate Salary 2021 – The Ultimate Guide
We all know that there is a way to negotiate your salary, but how to do it, seems harder for many people. Some are too polite, some are too scared and others are just satisfied with their current salary, but the main message of this article will be: there’s always room to negotiate more! Whether you are applying for a new job or discussing your current contract with your employer, we will learn you how to get the best result out of it!
This article will discuss different variables that positively affect your chances of success in improving your salary, the most important points that you need to remember during the negotiation, and examples of different salary negotiation cases.
After reading this article, you’ll have the confidence to negotiate for your salary at every opportunity.
The Importance of Salary Negotiation
When it comes to applying for work or job positions, almost all of us are looking for a good salary rate. It doesn’t matter whether you are applying for a managerial position or if you’re just applying for the first time right after graduating; we all want a good salary. But did you know that only 51% of job applicants are negotiating for their salaries? This is because most people are ashamed or embarrassed to negotiate for their salaries. People just simply take whatever is on the table for fear of getting rejected by the company or interviewer.
Not negotiating for your salary can be one of the biggest financial mistakes that you’ll make during your working career. Never feel ashamed if you want to negotiate for your salary. It’s your right to do so and companies nowadays are also more accepting towards applicants who want to negotiate for better pay. Of course, being successful with the negotiations is an entirely different thing. It will depend on how much preparation you’ve made and the kind of preparation too!
The Basics of Salary Negotiation Preparation
First things first, you need to gather information. In a negotiation between two professionals, the one with the most information wins. The logic behind this idea is simple; the one with the most important information will be confident enough to push for a better rate simply because he is prepared for what the other party can do. With information, you can form a plan as to when the other party might give a counter-offer. You can also gauge when would be the right time to simply stop the negotiations and walk away if you’re not going to get the salary rate that you want. All of these parameters are vital for a successful negotiation.
10 Variables Negotiation you could include in your Salary Negotiation
- Hourly/monthly/yearly wage
- Commencement date contract (always negotiable)
- Length of contract
- Number of Working hours
- Bonus on performance or profit-sharing
- Pensions: do they compensate for that?
- Disability insurance: do they compensate for it?
- Do they compensate when you get Sick?
- Are your negotiation counterparts also negotiating with other employees about the same variables, and how is that going? Or just with you?
- Last but not least, do they offer a job or career? Are there career opportunities and if so, which ones?
Important Questions to Answer Before the Negotiation starts
Preparation is the key driver for success in any salary negotiation. If you’re ready to start with the preparation, then here are some questions that you’d want to answer first before getting to the salary negotiation part:
- Counterpart: who are you negotiating with? Are your counterpart(s) only those who implement the (new) policy, or can they really make decisions during the conversation? The decision-making power at the table has no influence on your conversation, but it does on the negotiation.
- If you’ve recognized that the people on the other side of the table can only decide on the conversation, but not on the negotiation itself, then you can join the conversation and put your demand on the table. However, remember that this is not yet a negotiation, since the other side can just get back at you after ‘discussing’ your rate with their bosses.
- Do you personally know anyone who is also working in the same position that you are trying to apply for? How much do they get paid? Information such as this is critical, as you can use it as leverage once you are trying to negotiate for a better salary deal.
- Think about the company as a whole. Is it stable enough for now or is it raking in a lot of money? Is it experiencing growth? If the company where you’re trying to get in is getting a lot of profit, then you can try to negotiate for a good pay rate.
- Always ask as many questions as you can, especially with terms and rates that you don’t understand easily.
The key points and learnings are also presented in greater detail in our Negotiation Gamechanger course, so if you’d like to know more, then you’ll want to check it out after reading this article!
Salary Negotiation Process: tips that will guide you
In the end, negotiation is often simply about exchanging variables (in proposals) where it is often the case that the variables do not have the same value for the parties at the table. But doing it in the right order will help your chances of success.
One good tip is to write down all possible variables and arrange them according to the importance for yourself and the other party. You can learn more about that here. If you’ve come up with a variable that is less important to you but is important for them, then you might want to place this as an important variable for you too as chances are, the other party is not going to drop it when the negotiation starts.
Also, here’s a table of the salary negotiation process that you can use. We have more tools like these in our Negotiation Gamechanger course, so feel free to check it out:
Salary Negotiation Process
- Collect information before the negotiation
- Let the other party propose first
- Determine your breaking point
- Determine your opening bid
- Ask as many questions as possible
- If necessary, give out important variables in small details
- If the deal leads to what is below what you want, then consider your future options
The Negotiation Game Changer Certificate Program teaches you:
- the skills needed to drive better, fact-based decisions that ultimately benefit both organizations and its employees.
- a comprehensive analytics skill set that will enable you to achieve deals with results you have been dreaming of.
Salary Negotiation for the Currently Employed
All the tips in this article are about salary negotiations for applicants and for the current employees as well. Current employees always find it hard to re-negotiate their pay rates because they either feel ashamed for doing so or they are not prepared to do so, but remember: not asking for anything, won’t ever bring you anything.
For the currently employed, here are some of the things to consider if you’re aiming to get better pay with your current job and position:
- Is the salary rate placed in the hiring contract? If that is the case, then the only way that you’ll be able to re-negotiate your salary rate is when you’re going to renegotiate the terms of your contract as well. It will also be legally impossible to change your rate if your contract is still ongoing.
- For those who are currently employed and want to take a shot at changing their rates, you should check your performance compared to the other staff. If you’re a team leader, then how would you rate your team compared to the other teams in the company? If you (or your team) are performing well, then you can certainly justify the need to reward you by upgrading your current salary rate.
- Again, for the currently employed; think about your place in the company. Can the company easily replace you? If your company finds it difficult to replace you because of your value in the company, then you have a shot at negotiation for a better pay rate.
- You should think in advance about what deal you are going to be satisfied with. Think about the rates. Why do you deserve to get such a rate?
- Also, think about the other side of the negotiating table. Do you have any idea about his/her breaking point? Also, think about what deal would satisfy him/her.
- While it is important to make a point, you also need to be careful about how you convince the other side. You can try to convince the other side without having to negotiate, but this always takes confidence and information that your opponent can’t counter.
Salary Negotiation Case Study
Publisher cuts on writers profit %
A large publisher wants to cut on personnel costs: they have sent a letter to all their writers that the profit % per sold book from now on, drops from 20% to 15%.
What to do?
If – after pushing back 10 times on your part – it turns out in this negotiation that the publisher must necessarily go to 15% and otherwise cannot close a deal (their goal is: equal % for all employees), you can negotiate the hard or the creative way.
Hard tactics: this is only possible if you are 100% sure that the company relies on you and you & your colleagues are therefore irreplaceable: say that you stop and switch to another publisher if they can change the 20% (can also be a great opening bid by the way). This is going to cause a huge amount of stress on the other side of the table, but this tactic can only work if you know that they are not going to use it against you.
Creative tactics: if the hard variant as outlined above does not work, I would first ask how they want to compensate you for the fact that you as writers of this publisher do so much better than the other branches. However, think for yourself with your colleagues how you would like to organize this route because talking about proposals instead of cannot and/or no’s, always works best. For example, a deal where you achieve something (17% for everyone) in combination with a fixed 3% because of your good performance – could be a route.
Or they can compensate you in 20 other ways. Can they internally state that all writers have 15% as a profit percentage, they can also give new people who start 15%, but as long as you and your colleagues do this work, you keep the current conditions, or do you now set up the system completely differently because the negotiation is already open anyway? There are countless examples of how you would set up the current system, but always let them come up with a proposal.
How to negotiate my salary?
Negotiating your salary need not be difficult. All it takes is preparation, data gathering, and confidence.
How to start a negotiation about salary?
You need to prepare your offer. You should also learn who your opponents are and what they can bring to the table.
How to accept a job offer?
The first step is to read the printed copy of the contract. Make sure that every detail agreed upon by both parties is there. If there are no issues, you can sign the job offer.
Get that Job Offer!
Negotiations are clearly not just for procurement managers, but for every job applicant too! Get the job of your dreams through negotiating like a pro with our Negotiation Gamechanger course! Hurry now; limited slots are available.
Check our website for more information: www.procurementtactics.com
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