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Most people consider negotiating salary a tricky or difficult process.  It is in fact, very much like any other negotiation that you do. So if you are a skilled negotiator or not, just follow these simple tips to negotiate a higher salary.

This post is focused towards the case when you are dealing directly with the HR department of the company.

When you are being Hired directly by the company

If your first contact was with someone from the Company regarding any open position, you should authenticate this information before you going through the hiring or the interview process  

  • What is the role/ designation you are being considered for?
  • Are there more people likely to be at similar roles. E.g. Your role could be VP of Sales for East Coast, then there could be other people for VP of Sales for West Coast, or VP of Sales for Mid-West
  • Check the profile of other people who are at similar levels. You can usually get this on Wisestep, Linkedin or Xing.
  • Look at their experience, roles and see how you compare with them.

How to Negotiate a High Salary?

The following mentioned are few salary negotiation tips on what to say when negotiating salary offer and other salary negotiation tactics.

1) Knowing the Organization Structure:

Find friends who work in that company or similar companies and can help you understand the organization structure better.  Try and get details on the different levels. Some companies have grades, some have levels and some have bands. Try and get details of these different levels. Example: If someone from Company X you saw on Linkedin is a VP, then he could be VP level 1 or VP level 2 and the compensation would be different for the 2 levels.

You can also get some basic information of this on Linkedin by finding people with similar roles using the People Search Function

Knowing the structure helps you know where you are being fitted into and helps identify the Compensation range that goes with that level.

When you chat with HR Department of the company or recruiters they will be far more willing to talk to you about compensation at different bands and levels rather than that of individuals or specific designations. So ask them about the levels/ bands/ grades.

2) Compensation levels are available publicly:

It’s amazing how much information is available on the internet. Look up the careers section of the company and see if they have mentioned any compensation ranges for the positions advertised there. If yes, then it will give you an idea of what compensation levels exist at different levels of the organization. If you have mapped the levels of the organization as in Step 1 then you will be able to guess what range of compensation level you will be at.

You can also try out the Salary Calculator tools at various job sites to get an understanding of Compensation levels for the role.

For Senior Roles in publicly listed companies, the annual report and earnings filings with the respective regulators is an important source of what senior executives are getting paid.

For CEO roles, the compensation of the last CEO would have already been reported in the media 😉

3) The awkward but simple Questions no one asks:

Once you know the organisation structure and publicly available information focus on getting answers to these other questions.

  • Is the position a backfill or a replacement hire or a new position?
  • How long has the position been open? Why?
  • How critical is the position to the operations of the company?

As a candidate, your strongest suit is If :  it’s a critical position and a replacement hire that’s  been open for sometime (Thumb rule for position filling times are : < 3 months for junior roles, < 6 months for senior roles,< 1 year for Directors and CXO’s)

The company will be willing to pay a higher Compensation than their budget if the position is critical, is a replacement hire, has been open for some time and has a deadline to close.

4) Knowing the competition for the role:

Knowing how many candidates are in competition helps you negotiate effectively. No-one is going to volunteer this information; you have to look for cues. If you are in touch with the HR department on a regular basis to follow up on the status of your application you may be able to get clues of these.

If the position has been open for a long time, then it’s likely that there aren’t many candidates in the fray.

If there are multiple rounds of interviews and the interviews are being scheduled very quickly, assume that you are among the top contenders for the job. If there is considerable lag in the scheduling the interviews then assume that other candidates are being met.

In some really high profile roles like the  recent CEO hunt for Microsoft some of the candidates like Steven Elsop, CEO of Nokia, Alan Mullaly, CEO of Ford, Satya Nardella, Microsoft Insider were all being publicly discussed.   Alan Mullaly denied that he was interested, whereas the media reported that Steven Elsop wasn’t really making the cut

 

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5) How critical is the role:

Some roles are more critical to fill than the others.  The company’s ability to negotiate is lower if the role is critical to fill within a deadline. So if you are a CFO candidate talking to a fast growing company that has committed to its investors to IPO in the coming months, and you consider yourself a strong candidate, you know you can swing a higher compensation.  Remember what Sheryl Sandberg did at Facebook ?

Similarly if you are applying for a Technology or a Sales role try and understand how critical the role is for scaling the project, department or the team. Any role that allows revenues to come in quicker will give you more negotiating power.  Most companies will tell you this as a part of the job description process

6) The Company’s interest in you:

If you are applying for a role and the all the interviews with the company executives or senior managers have been quickly setup and in all those interviews the hiring managers have been trying to hard sell the role and the company to you then you know you are one of their top candidates.  One of the things to try is to see if you requested a reschedule for the interviews and the company accommodated your request patiently.   (Don’t over do it though!) . This works as signal on the contrary side too. If your interviews are not  moving fast enough, or if the meetings and interviews are being constantly rescheduled then you aren’t on their top list.

7)  Know your Hiring Manager:

Its very important to find out who you are going to work for. Even if you are being considered for a CEO role, there will be a board of Directors that you report to.  Its important to know therefore who is hiring you.

If you get along well with the Hiring manager and he is a strong player and Influencer inside the company s/he can help you secure a much  higher compensation because s/he can be your internal champion

8)  Disclosing your Current Compensation:

At junior levels, this is pretty easy,  the HR team usually does not even process your candidature if they don’t know your compensation so its best to be upfront about the compensation level. Make sure you disclose the different components and have appropriate documentation for it.

As the hiring moves toward mid and senior levels, you can have a little bit more say in when you disclose your current compensation.  If you applied for the role then, its likely that you have less control over this, and if you are being headhunted, you can wait till you speak to someone senior in the organization before you disclose your current compensation . Make sure you get answers  to your questions about the Job description, the criticality and the urgency of the role.

The rule remains the same, whenever you disclose, disclose accurately with all the components included. 

9)  Disclosing your expected compensation:

This is the  most important question that most people hate to answer :  “Whats your expected compensation? “. This gets asked a lot more candidly, directly and easily at Junior level or entry level positions and it gets tougher to ask at the Senior levels, specially at the CEO and Director level appointments

If you have followed Steps 1 to Steps 7 listed above you will know whether you have a strong hand or not.

If you have a strong hand then you can play this either way as long as you manage to keep the communication channels open and leave room for maneuvering for yourself and the company

9.1) Strong Hand: Ask the company to make an offer and then negotiate

If the company pays generously and you know it pays generously  (See earlier steps) then they might surprise you with an offer you never believed might be possible. This usually happens in the case of rapidly growing companies where the senior teams like you and you know they have the money and  no other candidate lined up other than you.

The line I have heard used most successfully in this case is: ” I think the company recognizes my capability and will make a generous offer” 

If for some reason, the offer is not what you expected and you have managed to keep communication channels with the hiring manager open then you can have a follow on chat and state your salary expectations.  At this stage, however, state something that you will absolutely accept. Companies don’t like candidates who negotiate endlessly

9.2) Strong hand : State your expected compensation 

If you know that the company has a history of not being very generous then its better to lay down your expectations upfront whenever this question is asked.  Its important to know what combination of salary and components you are looking for. Be clear in your mind and don’t be swayed by last minute inputs from friends and family. Take some time from the company if you need to, do your research and then  confirm a number.

” I didn’t want to get too ahead of myself during the hiring process so I haven’t had a chance to think specifically at a compensation number. I ‘d like to take a couple of days to give you an answer that is fair”

9.3) Not so strong hand : State your expected compensation 

If you know you don’t have a strong hand, then the best thing is to state your expectations clearly. you can split this in 2 ways depending on how keenly you want this job.

If you are quite keen on this job, this is a junior level position and you know the company is sensitive to  costs and budgets then state a reasonable number slightly higher than what the company is likely to meet. (remember Steps 1 to 7) . You have room to maneuver even if you get a slightly lower offer

If you are not so keen on this role and walking away from this wouldn’t matter much to you then you shouldn’t really have been interviewing in the first place.  However, if you do find your self in situation like this and the company is sensitive to costs and budgets then you still have the leverage to state a  more aggressive number. You just might lucky.

10) Closing the Deal:

The key for successful negotiating a salary offer is to also know when to close the deal.  It’s important that in your mind you know the minimum level at which you will accept the offer.  Once you have identified that level try and negotiate for more but don’t get greedy. All position have budgets and companies usually don’t like to go over budget. If you are able to swing a higher level, great but don’t let an opportunity go by if it meets your expectation.  

Happy Negotiating ! If one or more of these steps help you get negotiate a higher salary of even 2%  over 5 years that adds up to 10% more money than you would have otherwise earned !

 If you like any of these suggestions or have any other suggestions leave your comments below !

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1 COMMENT

  1. Nice suggestions to get higher salary. the tips mentioned here are considerable for an effective compensation negotiation.

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