Capital2's Blog

Recruitment and Career advice for the High Tech and Banking Industries

Negotiating an offer of employment

Even if the interview has gone well, you love the opportunity, the people and the company, our work here at Capital2 is far from done. We now have to ensure you get an acceptable offer. Assuming we have had good lines of communication, there should be no surprises at this stage….. but there are still some simple ways you as a candidate can facilitate the process by doing some preparation beforehand:

Know what you’re worth

  • Salary vs the package
  • How to negotiate
  • When to back out

Know what you’re worth

The first step in salary negotiation is doing some research into the remuneration package you expect, as well as the current market rates for the type of role you’re applying for.

The aim of your research should be to develop a clear idea of your minimum, expected and dream salary, as follows:

Minimum salary

Whilst seemingly obvious, ascertaining your minimum salary can be tricky. Does it equate to what you’re currently earning? Or perhaps it’s just enough to pay your outgoing bills?

Your minimum salary should basically equate to your minimum cash requirements for a role based on your circumstances.

So, if you’re a first jobber this may be enough to cover your costs and give you some spending money. Alternatively, if you’re currently working and are moving jobs to earn more, your minimum will probably be at least the same as you’re earning.

In any case, earning less than your minimum will probably make you feel slightly cheated, and that you haven’t done well enough out of the offer.

Expected salary

The expected salary will naturally sit in between your minimum and dream salaries. But how do you calculate this?

Well, looking at market rates is the best place to start. So, look for job specs with similar requirements to what you’re applying for and check what companies are currently offering.

An average of the salary for these jobs is probably a fair assessment of current market rates, and so will be around the salary you should expect.

Of course, if you’re particularly well qualified or experienced, you may well expect higher than average market rates.

To check the latest market rates in your chosen field of work, why not try our salary calculator?

Dream salary

Having done some research on what the market rates are, you’re now in a position to start considering your dream salary. But what is your dream salary?

Clearly, we’d all like more money so are reluctant to cap what we’d like to earn. But, your dream salary should be the most you can expect to earn given the job you’re applying for and your own level of experience.

Looking at the higher-end salaries for jobs posted in your chosen field, as well as the level of experience they require, is a good place to start. If you’re expecting a salary higher than any of the jobs you’ve seen, you’re probably expecting too much.

Salary vs benefits package

Having set out your minimum, expected and dream salaries, you’re now in a position to consider where you might have some flexibility on this. Namely, the benefits package.

Whilst take-home salary is clearly important, there are other elements to consider. For example, your prospective employer might offer health care, a generous pension, stock options, free gym membership or flexible working options (e.g. flexi-time).

The next step is to consider how much flexibility you’re willing to offer for all of these benefits. This will take into account the monetary value of these benefits, but you should also consider some of the lifestyle and time-saving benefits.

For example, flexible working hours might allow you to spend more time with your family, whereas company pensions will mean you don’t have to organise your own pension scheme.

How to negotiate

You’re now at the stage where you know what you should be earning, and what room you have for negotiation. So it’s time to start negotiating your offer.

Your prospective employer is likely to have a figure in mind for your salary, but don’t simply accept or reject the first offer.

Initially, you should ask whether there is flexibility on the salary dependent on the experience and skills of the applicant. Also, remember to ask how often this salary is likely to be reviewed – taking a lower salary will be more acceptable if there will be regular salary reviews.

With the salary band stated by the employer, now is the time to start comparing it to your initial salary expectations.

If the salary is below your minimum expectation, you will probably want to explain that the offer is below what you were expecting. You’ll also want to explain why this is – perhaps because you can’t afford to earn less or because you are already earning more than they are offering.

If the package is around your expected salary, you will still want to negotiate. Explain that you may be worth more than market rates, due to your experience, knowledge or qualifications.

In the event of being offered your dream salary, you will probably want to discuss room for future growth in earnings and career development. Remember, although this is your dream salary, as you progress your expectations are likely to increase.

For any of these scenarios, you should never flat out refuse a salary straight away. You should state that you ‘need time to consider the package’, giving you and the employer time more time to consider your options.

When to back out

There are clearly a number of considerations when deciding whether to accept an offer from an employer.

Whilst salary is important within these, you will need to take into account other considerations such as benefits, working hours, work culture, the job itself and room for career development.

If the salary is not what you expected, and is not compensated by additional benefits or career development, you should say so. If this is not then reviewed by the employer, you’ll probably need to accept that the job wasn’t right for you and move on.

Remember, if you’ve done your homework, you should know what you’re worth and make sure you earn that in your next career move.

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May 23, 2008 - Posted by | Interview Technique, random |

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