Negotiating your salary in the current job market
The finance sector is currently as hot as I can remember with salaries spiralling as companies compete to try to replace staff they have lost and fill new roles. So, if you think you are underpaid, what is the best approach to get the pay rise you believe you deserve?
Do your research
Given how much salaries and benefits have changed over the last nine months it is often worth getting an expert view on what you can realistically expect to earn given your experience, skills and track record. In much the same way as you would look at rightmove and get valuations from a couple of estate agents for your house, read the industry salary surveys and speak to a couple of trusted recruitment consultants to get an understanding of your market value. Although salary is the headline figure, don’t underestimate the importance of softer benefits both in terms of their financial value and your wellbeing.
Will another job offer help my salary negotiations
Many candidates believe that an offer from an alternative employer will put them in a stronger negotiating position. There can be some truth to this, however there are also important downsides.
Holding a metaphorical gun to your employer’s head can damage your relationship with colleagues who may feel your rise or promotion wasn’t achieved on merit; and lead to your employer questioning your long term commitment to the company and by extension whether they should be factoring you into future plans.
Furthermore, if there is a sense that you were never particularly serious about leaving your current employer, you will also damage your reputation with the company you use as leverage and with your recruitment company both of whom will have expended considerable time, and credibility in the case of the recruiter, in securing you an alternative offer.
The negotiation
Having done you research, schedule a meeting to discuss your career progression and salary – ambushing your line manager to request a pay rise is rarely a good strategy.
Irrespective of whether or not you have another offer, make sure you feel confident talking about your progress against your targets as well as your recent achievements. While highlighting rising living costs and changes in circumstances can help your case, clearly articulating the value you add to the business, the responsibility you take on and the positive feedback around your performance are what will really make the difference.
Too many candidates fixate on whether or not they should be the first to suggest a figure (there are pros and cons), or try to play hardball because they assume that the first offer they receive is simply a starting point (not always true). Instead, having done your research and preparation, go into the negotiation with a figure (bearing in mind associated benefits) in mind that you would be happy with and a clear idea of how you arrived at that amount. If you aren’t happy with the figure the line manager proposes then ask how they arrived at that offer as this will typically give an idea of what flexibility there may be for negotiation.
With any negotiation concluded don’t make a knee jerk decision. Whether or not you are happy, it is usually sensible to ask politely for a little time (i.e. 1-2 days) to reflect before making a decision.
Beware being overpaid
While the idea of more money is always tempting being paid beyond what your experience and core skills merit is often a bad idea. Salaries reflect not what we do day-to-day in our job but our ability to deal with issues that 10% of the time when things go wrong or become difficult.
Employees who are unable to deal with situations in line with their salaries will find that it can stall their careers, damage their reputation and lead to a loss of confidence it is often hard to recover from. Getting out of the resulting rut can be very challenging – respect is hard to claw back internally and it can even be hard to secure external opportunities when recent performance has been below expectations.
Plan ahead
Going forward, during your personal performance reviews always look to agree targets that will trigger your next pay rise and/or promotion. Having these targets in place will focus your effort on the activity the company wants you to deliver against and put you in a very strong position for future career discussions both internally and externally.
