The Hindu Business Line : Negotiating the best salary package

So you researched and prepared extensively for the job interview. You created that perfect resume and cover letter. You even practised answers to some common interview questions. You made sure you were dressed right, had references and were on time.

But you did little preparation for the all-too-critical salary negotiation with HR. Don’t let all that effort go waste as a consequence of not being offered the salary you expect. Here’s what you need to keep in mind:

How much do you earn? As simple as it sounds, most people don’t know their financials. Start with your basic salary and add up all the benefits. Your current employer may be providing you free food, transportation and a medical allowance. If these are not part of the benefits being offered, then you need to demand a higher basic salary to compensate for them.

Collect salary data. You can gather information about salary ranges for any position through multiple sources such as trade publications, industry associations, network of friends, consultants and so on.

What do you want? Break up your expectations into three categories — money, benefits and hygiene factors and jot down your expectation against each. Money would include salary, incentives, bonuses and any stock options. Benefits would include a company car, travel, relocation expenses and so on. Hygiene factors would include job title, training, exposure, international travel and so on. This will allow you to stay flexible and also provide alternatives to the employer during the negotiation.

Do your homework. Get some basic facts about the overall state of the industry in which you are applying for a job. A booming or sunrise industry will offer better packages. Check on the company’s profitability and its market position. If you have some friends in the same company, try to find out the urgency to fill the particular vacancy. Superior information will give you an edge during the salary negotiation.

Salary discussions during the interview. Many prospective employers will throw the salary question at you in the middle of an interview. This trick is used as most candidates are likely to agree on a lower salary figure due to their anxiousness to crack the interview.

Do delay talking about compensation as far as possible. Say something like “I am keen on this role and your organisation, but I’d like to hold on to salary discussions until we are both sure that I’m right for this job.”

Negotiate the basic salary first. Many HR managers will try to engage you into discussing benefits and perks before arriving at a consensus on basic salary. This gives the HR manager leverage in justifying why your basic salary should be lower. Always agree on the basic salary first and then move on to perks and other non-monetary benefits.

Get the low-down on benefits. Benefits can often go up to 25 per cent of you total package. Do get the details on medical and life insurance, travel allowance, pension plans, educational assistance programmes, overtime allowance, dependent care for parents/spouse, paid holidays, profit sharing and stock options.

Keep selling. Continue selling yourself throughout the negotiation process. Keep reminding the employer of the impact you will make, the problems you will solve, the revenue you will generate and the unique skills and talents that you bring to the table. Highlight your interest and enthusiasm to work for the organisation.

Wait for 24 hours. Don’t rush into accepting any offer on the spot, no matter how lucrative. In fact, a good idea is to buy some time. Tell the HR manager that you are interested in working for the organisation and would need about 24 hours to consider the offer. Think about it. You will be spending 8-10 hours a day in this new job, so a 24-hour wait is worth it.

Other expenses. Make sure that you include factors such as cost of living, relocation expenses, housing and travel in your package if you will be moving to a new city for the job.

End on a positive note. The last step of salary negotiation is to set the groundwork for what kind of performance will lead to a larger raise or promotion in the near future. Talking about future performance and expectations will make a positive impression and will help you to end the negotiation on a positive note.

Get it in writing. Make sure that you see everything that you agreed on with the HR manager in writing before you finally sign on the offer letter. The last thing you want is a nasty surprise a month down the line.

(The writer is a Managing Partner at W.C.H Training Solutions, a New Delhi-based training and consulting firm.)