Tips for reviews and salary negotiations
So, it’s that time of year again when you are looking at your payslip and think it needs a review. Maybe it’s the start of a new calendar year or maybe its bonus time and you expected more reward for your hard work? Maybe you haven’t had a salary review in a little while or maybe you are on an interview and they ask about salary? Either way, you are at the cusp of entering a salary discussion.
You are not alone if you find this discussion an uncomfortable process. Even though you may have excellent review points with your employer or really nail that perfect interview, when the topic of $$$ appears you get lost or panic. You might even walk away feeling as though you missed the opportunity and it wasn’t discussed at all!
The goal of any negotiation and review is to accomplish a win-win scenario. Both parties should be happy with the outcome and feel an even compromise has been achieved.
If you are currently working for or are interviewing for a large corporate or public-sector organisation, it’s highly likely your salary will be banded and has a pre-agreed range based on experience. This information is normally held by HR and in some cases made available on the company intranet. Make a note of your salary band level in comparison to your experience and achievements to ensure you are not negotiating an unrealistic figure.
The following tips are some basic guidelines to help you with discussing salary.
1. SELF-REVIEW
You might have an annual review with your boss. This will most definitely involve talking about your achievements and areas of development, so the first step is to do a self-review. It is important because it allows you to be prepared with examples of your performance.
In most large corporates, you might do a pre-appraisal which is a great opportunity for your self-review. However, in smaller companies with fewer HR processes this might not be available so you will need to do it yourself to back up your salary review.
Ideally you want to keep track of your achievements throughout the year by writing them down. They could be special projects that you managed, exceeding targets, software implementation, office moves, process improvement, business development or anything that you can take 100% credit on ownership for.
It is great to be part of a team success (which is very important), however don’t be shy in promoting your individual contribution, especially if you held an important role within the team such as leading he project.
The more often you review your own achievements (maybe once a month/quarter) the easier it will be to gather your achievements at review time or to use when updating your resume.
Don’t forget to look at the year ahead and your list of objectives. It is important not to forget your areas of improvements because you want to ensure that you are honest about your self-review. Brainstorm ways on how you expect and plan to develop your areas or improvements. Also make new suggestions for career growth and show how you can add value to the organisation. Things such as taking on new responsibilities, increasing your targets, suggest new ideas and improvements. Employers like to see you take initiative, so show them the value in investing in you with a salary increase.
2. TIMING
If your boss has requested a review date you may not have complete control on the timing chosen, however here are some points on better suited times to ask for a salary review.
Look at the business overall and assess if it’s a busy or quite period. This will ensure that your review meeting won’t be rushed. Be aware of holidays, staff shortages, any business crisis or anything that might not be the best time for all parties.
It is also important to be mindful of any attendees that are not well or feel under the weather. Postpone your meeting for another time when they are better – you will both appreciate it.
If you are on an interview you should have a salary guideline at the start of the process. If the employer wants to discuss salary in the first stage interview, be open and honest about your expectations followed by your examples of your self-review to back up that $$$ amount that you are expecting.
It is possible that a new employer will ask about your current or previous salary. Let them know as this helps build rapport and trust. If you are going through a third party such as a recruiter, you can opt to refer that employer to your agent, however employers appreciate a direct response. Clarify with your consultant before the interview so that you are confident should the topic arise.
3. RESEARCH
Like any negotiation you must do prior research before you start. You wouldn’t buy a house without knowing what the property prices are like in that area would you? So, your salary should be the same process.
There is a high chance that the salary negotiation will begin with your current or previous $$ amount as a starting point. Depending on your industry, you should research market information in your sector such as the average yearly percentage increase for your type of role. You may need to think outside of the box a little as to how you get this information.
When talking about salary, employers tend to refer to a ‘package’ value. Clarify your understanding of what is included in the word ‘package’. It is common to assume that ‘package’ is referred to as a total of the base wage and superannuation combined. It usually doesn’t include bonuses, commissions or other benefits such as a car, however this may vary between organisations.
It is important to know industry benefits for your relevant field. Please see some examples below of ways you can research information assuming we are looking at ‘package’ as a total of salary and superannuation only.
Information to research:
Ø Job adverts of similar roles with salary information in your location/ city.
Ø Salary guides produced by employment agencies, organisations or institutions.
Ø If you are in the public sector, look at the salary banding for your level. This is normally public knowledge.
Ø Salary statistics in your sector, job or location.
Ø Speak to “specialist” recruitment agencies who consult within your industry.
Ø Talk to people within your network or profession.
Ø Ask the opinion of mentor that you can trust or potentially an old employer that you have a good relationship with.
Ø Speak to professional institutions, colleges, universities who are relevant to your industry.
Ø Review industry benefits – Bonuses, phone, car, fuel card etc (you will more than likely get this from the above research)
Once you have completed your research, you need to note down your expected salary range to work from and most importantly you must establish an “acceptance/ walk away figure”. What is your bottom line that you will accept and is this amount the same as your current salary?
As mentioned earlier, your aim is to achieve a win-win solution. Be realistic and use the information you have gathered above to outline the figure or package that you are happy with. If needed, support your salary expectation by providing your employer with the research you have done along with your achievements. They may use your input to increase your salary!
4. The AGENDA
It is important to agree an agenda for any meeting. If you are seeking a result in your review meeting, it would be wise to set up a meeting agenda with a list of points that will be discussed including the topic of your salary.
Both parties need to prepare well in order for smooth discussion as not many employers appreciate a sudden introduction on a topic that can result in a lengthy conversation. (Remember our point about Timing!)
So, let them know in advance that this is something that you would like to discuss.
5. The DISCUSSION
You have completed your self-review and noted down your achievements over the past year. You have a list of goals regarding growth and development in your role moving forward. You have solutions to implement for your areas of improvement. You have done your industry research, have your salary band/bottom line figure and your agenda is ready! The timing is perfect.
You want to help them see that a salary increase is an investment so you will need to rehearse your delivery prior to the meeting. Practice with a friend or a colleague – role play a few scenarios. Confidence is important, so keep your information factual and refer the preparation you did earlier. Should your boss want to consider your points before making a decision, be prepared with a hard copy of your notes/ achievements for him to take away. A good reminder that you are passionate about your work and well prepared.
6. Talking MONEY
You might have a figure in your mind to start the negotiation. It is important to allow your employer to begin the negotiation by proposing an amount first. If they ask you open with an amount, maybe ask what figure they have in mind and you would be interested in hearing this first.
So, they put out a figure of $100,000 and you use this as an opportunity address that your research has concluded that other similar roles are paying more. Let’s say that figure is $120,000 so you were hoping for similar. (Remember, to have your researched evidence as they are more than likely going to want to see it).
You want to start high (within reason), going back and forth in small $$$ amounts. This allows room for you to showcase some of your achievements through your negotiation process to get a good result. Remember this should be a relatively short process so be realistic in the amounts you put forward.
Looking at the diagram below as an example, if your employer wants pay $100,000 and you ideally want $120,000 then $110,000 would be a reasonable half way point to agree upon.
It is great if you secure something that is closer to your desired $120,000 mark, however let’s remember what your bottom line is. Be aware of your comfort zone as it is hard to have a walk away figure if you are currently employed compared to attending an interview for a new role. It is also important to be honest and upfront to your employer if you feel that you are being undervalued. Having your achievements and self-review points help strengthen your negotiation technique.
Remember you want a win-win!
$100,000 ---------------------------------($110,000)------------------------------------$120,000
They want -------------------------------(Win – Win) ----------------------------------You want
Benefits and Bonuses
A benefit does not always mean money. This may be classed as a bonus in some organisations and bonuses are not always guaranteed.
As mentioned earlier, make sure you have researched the industry benefits for your role. For example, it’s unlikely that you will get a car for an office role that requires no external travel.
If you work for smaller company and do not have pre-defined list of benefits but are looking to add them as part of your review, costing them out may help the process. Your employer can assess the bottom line and weigh up the value of adding the benefit in your negotiations.
Benefits should be just that, they should benefit both you and the organisation. Some examples may include: Tuition/ study support or seminars that will help you with industry knowledge and expertise, car allowance that will increase sales when you are on the road, gym membership that would increase energy and productivity.
If you are looking to introduce a bonus or higher bonus amount, be aware that you will very likely have KPI targets to reach first. Do some preparation around the areas that you believe should be targeted as KPIs.
Research your market or look at an organisations career pages for benefit and bonus ideas, the list will be endless!
7. And FINALLY
Ideally you want a result from your discussion and an amount that you can walk away with that you are satisfied with. However, if time is needed for your employer to consider your points and put something together (this is likely if you are looking at a large increase/ benefits) then agree on another date/ time to conclude the discussion.
It is important to agree on a follow up meeting between 7-14 days to ensure that you both can recall all of the information that was discussed in the first meeting.
Once you have both agreed on the new salary/ benefits and bonuses, you must have an amended contract drawn up detailing the agreed amounts and terms that were discussed.
If you need further clarification or advice on any points above, feel free to contact Anderfield for more information.
info@anderfield.com.au or contact our office on 02 8676 6999.