Navigating The World of Salary Negotiations
Introduction
Negotiating a salary can be a challenging yet critical aspect of professional life. Whether you are stepping into a new role, requesting a raise or comparing competing offers, the stakes are often considered high and the terrain unfamiliar. The process is rarely straightforward, often involving a range of emotional, financial and professional considerations.
Consider these scenarios: A hiring manager presses you for a commitment before you have finished evaluating other opportunities, or a potential (or current) manager pushes back on your request for a higher salary. Each situation presents unique hurdles that highlight the intricacies of salary discussions in today’s job market.
Compensation packages often extend beyond base salaries, encompassing bonuses and other performance-based incentives. Yet, in this complexity lies opportunity. Effective negotiation can make a substantial difference, not just in terms of immediate earnings, but also in career trajectory and lifetime wealth accumulation.
Research consistently shows that negotiating your salary is worthwhile. According to the Pew Research Center, only 30% of U.S. employees attempted to negotiate their last offer, mainly due to discomfort, fear of rejection or satisfaction with the existing offer. Yet 85% of those who chose to negotiate were granted some or all their requests.
Professionals who advocate well for themselves often find greater alignment between compensation and their qualifications, skills and experience. The key lies in preparation, strategy and confidence.
In this article, we will explore essential tips and strategies for salary negotiations to assist you in securing the compensation that aligns with your profile and career goals. From preparation techniques to in-the-moment tactics, this guide aims to empower you to navigate salary discussions with clarity and confidence.
Preparing for Salary Negotiations
Preparation is key to any successful salary negotiation. Knowing your worth, researching industry standards and understanding the broader compensation landscape will empower you to advocate confidently for yourself. Four actionable steps to assist you in preparing for your next salary discussion are discussed in the paragraphs that follow.
(1) Do Your Research
An important starting point is to explore the standard remuneration for someone with your education, skills and experience level. This preparation step is crucial before any negotiation and can facilitate a more successful negotiation. The market median can form a good baseline for your salary request and can even be used as a justification. This baseline is also useful when considering a “stretch goal” that aligns with the upper end of your value range while remaining realistic.
It will serve you well to ascertain whether there are any limitations in place, such as budgetary constraints. In cases where financial flexibility is limited, it may yet be possible to change your approach and negotiate other non-monetary benefits.
We invite you to reach out to The SA3 Team should you wish to have a confidential conversation to aid you in gaining a better understanding of market-related salaries in your industry. We have three fully qualified actuaries with a combined 26 years of industry experience, and another almost 40 years of actuarial recruitment experience.
In addition, our annual SA3 Salary Survey is in its 9th year and the results are widely used throughout South Africa. Our Salary Survey is available on the SA3 App (IOS / Android), and the results are shared annually with all participants.
(2) Consider The Full Package
Much of your job satisfaction will come from factors outside your remuneration: These include responsibilities, company and team culture, location, work-life balance, hours of work, the value of mentoring, perks, opportunities for growth and promotion, opportunities for travel, support for continued education, and so forth. Remember to focus on the value of the entire deal that is presented to you.
Remember to factor in any additional costs the role may incur, such as relocation expenses, additional commuting costs or the need for new equipment. It is not unusual for candidates to ask employers to adjust their salary to account for expenses related to accepting the position.
(3) Evaluate Your Unique Offering
It is important to know how much value you can offer an employer before starting the salary negotiation process. Several factors can influence your compensation, and you may be able to negotiate a higher compensation if, for example, your experience is towards the higher end of the role’s requirements, you have niche or technical skills that take time to master, or your leadership skills and experience exceed the employer’s expectations.
Consider your contributions and achievements in prior roles, as well as your unique skillset that you will afford your prospective employer. If the employer knows your value, they will be more likely to take steps to avoid losing you, which will help you to build a strong foundation for your bargaining position.
(4) Rehearse Your Talking Points
It is one thing to craft your negotiation strategy; it is quite another to implement it. Consider enlisting the help of a trusted friend, family member or colleague to listen to your pitch and to present counterarguments. This will help you to prepare your thinking and to practise for different scenarios, helping you to enter the negotiations feeling more confident and poised.
If you decide on asking for additional compensation, it might be helpful to answer the following question as a framework for your conversation: Why do you feel you deserve a higher salary than the one the employer is offering? Be sure to provide one or two solid examples of why the company should invest more in you, using specific examples of achievements, skills or market data to substantiate your ask. It is important to avoid asking for more money without good reason, much as you would not spend more of your own money without understanding the value of the product that you are purchasing.
Comprehensive Tips for Salary Negotiations
To follow are nine key points and strategies that you can take into your next salary negotiation.
(1) Lead With Gratitude
You and the employer have now both invested a great deal of time and energy in the hiring process. It is crucial that you recognise this and that you thank them for considering you. Be sure to share specific reasons why you are excited about the job, such as the culture or the role’s responsibilities.
“Be courteous and cautious when requesting additional compensation with the company. You never want to come across as entitled or offend them with a salary far above what they initially offered.” ~ Kate Palmquist
(2) Balance Likeability and Assertiveness
In his article for Harvard Business Review, titled “15 Rules for Negotiating a Job Offer”, Professor Deepak Malhotra provides some clear pieces of advice on negotiation. He starts off by highlighting the importance of likability, stating that, “People are going to fight for you only if they like you.” Likability plays a key role in ensuring that others would advocate for you and helps to increase the chances that the other side will work with you to get you a better offer.
Another key to negotiating lies in being assertive about those things that you want and about the reasons for your request, without overstepping the boundaries and being perceived as making demands. You need to approach the conversation confident in the value that you offer. Being confident means being able to show an appreciation of our own abilities and qualities, and it should never be confused with arrogance, that is, showing an exaggerated sense of your own importance. Appearing overconfident or arrogant will always make a negative impression.
(3) Remain Professional
Your interactions with the hiring manager will likely shape his/her perception of you. Approach the negotiation professionally and with diplomacy, with the aim of leaving a positive impression regardless of the outcome. Whether you end up accepting or declining the offer, remember that it is important to do so in a friendly and professional manner and to avoid unnecessary friction. Each person you meet during the process will become a part of your network, and in a small and close-knit profession such as ours, you never know what opportunities these people may have available for you in the future.
(4) Substantiate Your Request
As referred to earlier, be prepared to justify your salary expectations with tangible reasons such as skills, experience, previous contributions and achievements, and market data. Avoid making unsubstantiated demands, as they can weaken your negotiation position and make you sound arrogant.
(5) Be Flexible
It is important to let the hiring manager know that you are flexible and willing to work toward an agreement. Even if the employer might not be able to provide you with what you have requested immediately, such as a more flexible working arrangement, it is important to remember that time, interests and constraints change, that trust is earned over time, and that things that are not negotiable today, may be negotiable in the future. Be willing to continue conversations and to revisit issues that were left unaddressed or unresolved: Six months in, you may very well see that you have built the necessary levels of trust to renegotiate those matters.
(6) Signal Your Commitment
If you intend to negotiate for a better package, make it clear that you are serious about working for this employer. No hiring manager wants to expend the time and effort to get approval for a strong or improved offer if they suspect that you will still decline the offer at the end of the day.
In those cases where you have more than one option available to you, be cautious about mentioning your options as leverage, as it can create the impression that the hiring manager will not be able to obtain you as an employee. It may be wise to balance this by stating the conditions under which you would forego your other options and accept their offer. Keep in mind that your actions here will have an impact on your reputation going forward, especially in our small profession.
(7) Negotiate Multiple Issues Simultaneously
It is usually better to present all your questions and concerns at once (for example salary, benefits, start date) to avoid appearing disorganised or overly demanding. If you only ask one question initially, the hiring manager may very well assume that answering that will move you closer to deciding. By then posing more questions, the hiring manager may potentially become less generous and understanding.
(8) Prepare for Tough Questions
Hiring managers negotiate often, so it is safe to assume that they will ask you important, and sometimes intimidating, questions to determine your motivations. These may include the following:
- “Do you have any other offers?”
- “Will you accept if we make you an offer tomorrow?”
- “Are we your top choice?”
- “If we match your salary expectation, will you accept the position?”
In the article by Professor Deepak Malhotra, he highlights the importance of preparing for these important questions, and of always answering honestly. If you are unprepared, you might say something evasive or, worse, untrue. Dishonesty frequently comes back to harm you, but even if it does not, it is unethical; your goal should always be to answer honestly without giving up too much bargaining power. If you have thought in advance about how to answer difficult questions, you probably will not forfeit one of those objectives.
If you are far along in the hiring process, remember that the people who you are negotiating with are not out to get you – they like you and they want to continue liking you.
(9) Do Not Negotiate Only for The Sake Of Negotiating
If something is important to you, then you should absolutely try to negotiate it. But sometimes it is wiser to resist the urge to prove that you are a great negotiator. Haggling to acquire just a bit more can rub people up the wrong way and potentially damage relationships, potentially limiting your ability to negotiate with the company at a later stage in your career when it may matter more.
Ultimately, your satisfaction hinges less on getting the negotiation right and more on getting the job right. Negotiations should come into play only after a thoughtful, holistic job search that is designed to ensure that the path you are choosing will lead you to where you want to go.
Conclusion:
These strategies aim to provide a guide to handling salary negotiations effectively, balancing assertiveness with professionalism to achieve a mutually satisfactory outcome. Ultimately, career progression is a matter of personal ownership. Once the negotiation concludes, the onus is on you to thrive in your role and demonstrate your value to the organisation.
If the idea of negotiating directly with an employer seems daunting, we invite you to reach out to The SA3 Team. As experienced actuarial recruitment consultants, we can negotiate on your behalf, ensuring that you receive fair compensation.
