Why you should always negotiate your salary

So you’ve just walked out of an interview feeling triumphant. The recruiter says she will follow up with a call shortly. And this time, she actually does!

Then comes the big question: your salary expectations.

What are you supposed to say? Do you give a range that you’re comfortable with? Are you supposed to be all vague and let the recruiter propose a number instead? Or do you aim higher than what you are really comfortable with, expecting to settle somewhere in the middle?

We’ve put together a master guide for how to handle salary negotiations like a pro here.

But first, the question of why you should always negotiate.

Nobody graduates from school knowing the basics of how to negotiate a salary with dignity. Yet, negotiation is a way of life.

You negotiate every day, whether you realize it or not. In fact, it happens everywhere from the boardroom to the bedroom: when discussing plans for where to have dinner with friends, or which movie to watch with your partner, or how much TV time your child gets tonight.

Child

But what if I really want or need this job, you ask. Surely you don’t want to risk losing a potential offer.

Well here’s the best news you’ll hear today – no company will ever walk away from a negotiation process unless they weren’t genuinely interested to fill this vacancy in the first place.

In such rare cases, you are better off not joining an organization that wasn’t serious about hiring. It simply means the timing isn’t right, or there’s isn’t a real job for you there.

Moreover, consider the costs in time, effort, and money that this company has expended to advertise the vacancy, filter through hundreds of applications, screen, shortlist candidates, assess them through multiple rounds of interviews, and finally arrive at their chosen candidate – you.

Imagine the opportunity cost of running another day in business without someone doing a crucial job.

Your salary makes up less than 50% of hiring costs for any company, so a few extra thousand dollars a year isn’t going to move the needle on whether or not they walk away.

The second reason for negotiating:

Do it right, with patience, dignity, and politeness, and the company is more likely to respect you as a candidate.

You are off to a great start in your relationship with this organization.

After all, a job is a transaction of time and skills in exchange for money. You can expect to be negotiating for more things in the near future with this same company or boss, whether it’s a raise or new job scope, a promotion, transfer, or even a proposal to try out your new idea.

Negotiation is a habit that highly successful people in the workplace practice.

It’s also a skill you want to start sharpening early on in your career. Especially true if you want to get a solid head start ahead of peers who think negotiating makes you come across as money-minded.

Right

Which brings us to our next point.

Don’t make it just about the money obviously.

There are many elements to a package that you can explore with a prospective employer. How you actually ask for a better offer matters a lot too, which our guide addresses.

There is plenty of information asymmetry in the offer negotiation process.

You don’t know internal salary bands, how the previous incumbent was paid for this exact role, uncertainty with variable pay (eg. bonus) due to business performance or policy changes, and so forth.

Negotiate

Yet, you have absolutely nothing to lose at all by asking.

Negotiation is about two parties walking away with what they considered to be the best possible outcome for themselves. So be creative.

Can’t improve on the base salary? Can the employer consider an increment-upon confirmation? Or additional allowances, a sign-on bonus, flexible work arrangements, more paid time off, or a special stipend?

Restrictions around base salary ranges do exist the more established a company is.

In fact for most employers, it is factored into the long-term permanent costs of hiring a candidate. Your base salary will be the basis from which statutory contributions, increments, target bonuses, promotions, etc. are calculated.

It is also most likely to cause pay equity issues especially if the existing team is not paid as much as what you are asking for equivalent work. If you are indeed at the high end of that company’s range, propose these non-permanent cash options we just mentioned.

If you accepted your last offer with an immediate (or fake thoughtful) day or two-yes, but refuse to cheat yourself out of an opportunity for a better offer this time around, check out our guide on rookie mistakes to avoid when negotiating and how to actually master salary negotiations.

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