A few weeks back I attended an event organized by the BERlean IN circle in Berlin around the topic of salary negotiation.
From salary negotiation and payrises to dealing with and overcoming pay gaps – money plays a big (and sometimes difficult) role in our work life. How open should we be about our salaries?
This sounded intriguing. On top of that, the guest speaker for the evening is was Noor van Boven, the brand new Chief HR Officer at N26 (a disruptive online bank based in Berlin). It was a good opportunity to hear about some real-life tips on salary negotiation.
Here’s what I learned:
1. Do your research before you enter the salary negotiation
Every position has a price tag and every company has a certain budget for it. The price tag would vary for a corporation, startup, NGO, or a government agency. It’s your job to do the research and get a feeling of what a person with your education, qualifications and years of experience would make at the exact organization. The country and city also matter. Use sites like payscale.com and glassdoor.com
Don’t be shy to ask your network. Peek into LinkedIn, send a few messages.
If you still have no idea what to ask for, ask the recruiter for their budget. They might not directly spill the beans but you can throw a few numbers at them and get a feeling of what the salary for this position is.
2. The 3 numbers
Before you start the negotiation be clear about:
- The number you need to cover all your expenses
- The number you think is fair to get
- Your “Oooh My God!” game-changing number
Always ask for something in between 2. and 3. Ask for the number that makes you feel uncomfortable. If this is too high, the company will make it clear. They would come with a counter-proposal. They’d say something like:
You’re stretching our budget. Here is what you can give you: ….
In addition, we will give you 5 more vacation days, shares in the company, and a participation in the yearly industry conference. (for example)
In most of the cases, they might negotiate down or give you what you want straight away. It’s very rare that an HR manager withdraws an offer because the candidate’s initial ask is too high. (provided they’ve made their research).
3. Never take the first offer. Always negotiate
When I was in the beginning of my career fresh out of university, and even a few years later, I wouldn’t negotiate. I was so excited to get an offer that I would be too afraid to ask for more. I didn’t want them to think I was greedy and shut the door in my face.
Psst … The HR managers present at the event shared they never withdrew an offer because the applicant demanded too much. They negotiated back.
With time and experience, I changed my perspective. Let’s look at the business side of it: the company obviously has a need and is ready to pay a certain amount for a job done. You are going to do the job well and you would work hard to achieve your objectives. It’s only fair to be paid for it.
The first offer they give you is just an anchor. If you have done your research, you know what space you have to move. You know how much more you can ask for.
Salary negotiations is like a tennis game – they serve, you return.
It might be a nerve-wracking game. But it’s a game nevertheless. If at the end you know you’ve received the maximum you can get, you would feel it’s only fair to give your best to the company instead of sitting and plotting the next salary negotiation. It’s a win-win.
4. Find out where you stand in comparison to your peers
HR managers’ and line managers’ goal is to create and maintain balanced teams. Seniors should get approximately the same amount, and mid-level and juniors – too.
In many companies, there are yearly compensation calibration sessions where they put everyone’s papers on the table and take steps to maintain the balance.
Too big of a remuneration discrepancy is not in the HR manager’s interest. Be it at the water cooler, or in a private conversation, you would get an idea of what kind of money your colleagues make. If you find out that someone with similar experience, skills, and contributions makes way more than you, it will be demotivating for you. Logically, you’d go to your manager to ask for justice.
Depending on the lever that you’ve shown at the interviews, your salary is going to be related to that of your peers and team members. Ask your manager how you rank. Ask at what level you are seen and how you can get to the next level. It’s a fair question which might take you months to figure out yourself.
5. Negotiate beyond your salary
If the company can’t give you the desired salary, there are other benefits you can ask for. These might come at no cost to the employer, but can be of a big value for you. For example, you can ask for a certain title, more vacation days, the right to work from home, additional courses and certifications, conferences, a public transport ticket, your phone bill, health insurance, etc.
The salary negotiation conversation is the right time to raise these demands.
6. Salary = Performance
Always relate performance to salary. When you’re starting a job or having a regular performance review, now it’s the time to relate your performance to your salary.
You might need more money because you want to increase your savings, fly to Hawaii, move to a bigger house, etc. Never mention your personal needs. Always keep the conversation around your performance. Mention what you’ve achieved in the last period, which new skills you’ve acquired, any outstanding contribution/improvement to the team/company. Now it’s the time to highlight the tap on the back from the CEO or a senior manager you got.
You can also ask:
What does it take to get to the next level? What are the exact results I need to deliver and what skills to acquire to be considered for the next level?
What are your real-life salary negotiation tips? Have you ever tried to get the “Oooh My God!” number. How did it go?