When To Negotiate Your Salary (With Tips And Examples)
Updated 30 October 2023
In the event of a promotion or a new job, you may think of negotiating your compensation. The reasons may include higher educational qualifications, length of service at a company, industry salary trends or enhanced skill sets. Negotiating your salary with your employer requires preparation and careful consideration of certain factors. In this article, we review factors pertaining to when to negotiate your salary, look at negotiation tactics and go through some tips and examples.
When To Negotiate Your Salary
Learning when to negotiate your salary is important for your career growth, since compensation affects your productivity, job satisfaction and performance. Salary negotiations can help you learn how to handle difficult work discussions while remaining professional, composed and non-adversarial. Here are some situations where you can consider negotiating your salary:
It does not commensurate with your experience
Ensure that your compensation matches your years of experience. Your experience depends on your education and skills. For instance, if you have a master's degree or you are highly skilled at your job, you may ask for a higher salary. As you gain knowledge and experience working in a particular industry or job role, your earning potential increases. For example, mid-level and high-level employees usually earn more than their entry-level counterparts. Consider the following example:
"Thank you for offering me the position of senior software engineer. I would like to express how excited I am to work for MB Group. Prior to accepting, I would like to discuss compensation. During the interview, I mentioned that I have over two years of experience in software development and formal training in Agile practices. With my expertise, an acceptable salary would fall between ₹17-20 lakhs, a little higher than your current compensation of ₹13 lakhs."
You are expecting a promotion
It is common to get promoted without being offered a higher compensation. This can be an appropriate time to request a compensation increase. In determining your desired salary, organise your priorities in terms of title, advanced training and inclusion in special projects. Aside from pay, you may also be eligible for non-pay benefits like personal time, flexible work arrangements and advanced training. Here is an example:
"Hi Rahul. Thank you so much for the offer. My time at Global Industries has been great. I have spent these three years learning analytics and deep learning and have met our goals of increasing annual revenue by 20%. I am happy with the promotion, yet I expect a salary raise that aligns with my market value. Therefore, I am requesting my annual salary to be raised to ₹30 lakhs."
The company can afford a higher compensation for you
Companies can often accommodate higher salaries depending on the company size, culture and profitability. Knowing the pay and compensation structure of the company you work for is crucial. Companies often offer various pay tiers or ranges of compensation for different roles. When negotiating a salary increase, it may be helpful to know where you fit within that range.
"I am very excited to be offered the position of senior data scientist at SM Industries. Before accepting this offer, I want to discuss the base salary I am being offered for this position. Based on the market trends and profitability of SM Industries this financial year, I figure that my compensation range lies within ₹30-40 lakhs."
It affects your ways of living
Living in certain geographical regions may be more expensive than living in others. In such areas, living costs tend to be higher, so employees earn higher salaries to afford necessities, such as rent and real estate. Ensure that this new salary helps you meet your financial goals, such as increasing your savings or buying a new home, before discussing it. Below is an example:
"I am thrilled about the prospect of joining your team and moving to New Delhi. This new opportunity is an enriching experience for me. Before accepting your offer, I would request you to consider the higher cost of living in New Delhi compared to Dehradun. My salary requires an increase from ₹8 lakhs to ₹10 lakhs. I would also incur additional expenses for relocating to Delhi."
Related: Salary Negotiation Tips And Examples
How To Negotiate Salary
It is essential to know your earning potential, whether you are just starting out in a new field or expecting a promotion. Knowing how to negotiate your salary can help you achieve that. Here are the ways you can negotiate your salary:
1. Track your accomplishments
When looking for salary negotiations, start by reflecting on your past accomplishments. You are likely to receive higher compensation for your work experience and accomplishments. As you prepare to speak with your supervisor about a salary increase or promotion, keeping a record of your accomplishments can be helpful.
For instance, note when and how you exceeded your manager's expectations or won an award for your deliverables. That can help you show your worth for higher compensation. You can negotiate your salary with your employer based on a detailed account of how you have been handling your responsibilities.
2. Analyse the company's performance
Research the financial performance of the company and its recent staff assignments, along with industry trends. In the interview process, understanding the company's position and expecting potential objections can help you negotiate your salary. As you request a salary increase at your company, understand that organisations with strict budgets may limit the increments they offer. In this situation, it may be a good idea to look for a new job at the company if you expect a salary increase.
3. Determine your salary needs
Use your research to help you determine a realistic salary range to negotiate your compensation. Consider factors such as the basic salary you need as per your living standards, the minimum salary increase you would accept and your realistic market worth. It is important to be aware of this beforehand, so you feel prepared and confident during negotiations. You might consider counteroffers such as more paid time off or remote work options.
4. Prepare your talking points
In preparation for your negotiation, you may find it helpful to begin by answering why you deserve a higher salary than what you are currently being paid. Successful long-term negotiations require both parties to be considerate to reach a mutually beneficial solution. Include the following details:
Describe the results you have achieved in previous roles, such as driving revenue for your company or winning awards or being a part of a successful project.
Experience in a related industry, particularly if you have more experience than the employer has specified.
Consider including information regarding certifications or in-demand skills you acquired.
Tips For Salary Negotiation
Below are some tips you can use to negotiate your salary:
Learn about industry standards
It is essential to enter a salary negotiation with detailed information. You can use salary information from trusted websites to get an up-to-date and realistic view of compensation for your field. You can also find the average salary for your position, experience level and location. Other factors include career level, educational qualifications, years of leadership experience, licences and certifications. Consider in-demand skills and jobs that can help negotiate higher pay.
Consider perks and benefits
It is common for salary negotiations to include details about employee perks and benefits. It might be more cost-efficient for the employer to offer extra vacation time, flexible hours or a work-from-home schedule than a salary increase. Make an informed decision by comparing health insurance coverage, retirement savings plans and additional benefits like professional development opportunities when considering multiple offers.
Before you negotiate with your hiring managers for a higher salary, mention you are grateful and enthusiastic about their job offer. It would be a good idea to ask them more questions about the position so you are aware of your responsibilities. Extend your gratitude for their flexibility in the negotiation if it goes well. Regardless of whether you accept or reject their offer, thank the company for the opportunity.
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