Terrified of starting salary negotiations? Here’s why you shouldn’t be scared anymore
Are you the kind who will break into a sweat on hearing the term-salary negotiation? Or do you believe you have little or no choice in deciding the package for your first job? If yes, then it is time to rethink again.
Even as it seems grueling and dreadful, negotiating your first salary may very well pave way for your successful career marked by significant financial growth. Moreover, a person’s entry-level package or Cost to Company (CTC) as it is called, will always act as a base for future job hike negotiations, thus deciding the pace of upward mobility. According to an analysis done by Salary.com, dodging the crucial mediation of salary package in the initial stage can cost a whopping $1 million dollars to a person’s career in the course of 45 years.
Contrary to popular belief, a recent survey done by CareerBuilder in America found out that most prospective employers are willing to negotiate salaries for entry-level workers. However, the same survey which included representative samples of 2,369 full-time employers and 3,462 full-time U.S. workers also revealed that how employers are also most likely to quote a lower salary than their actual package, leaving enough room for an anticipated negotiation.
Of in-built buffer and bargaining power
Even in the Indian job market scenario, most salary negotiations come with an in-built buffer that is expected to benefit the employers more than naïve employees who are desperate to make a successful landing with their first professions.
Nagesh V Saralaya, currently the Regional Human Resource (HR) Manager at Kotak Mahindra Life Insurance Ltd. speaks from his five years of experience in the field of recruiting, ranging from IT to the banking sector. Even he as tends to agree that fresh graduates have little bargaining power during salary negotiations, he does not rule out the fact that most such deliberations and offers come with some slack that eventually favours the employers, who want to hire the best talent at optimum cost.
“Salary package is decided by one very important factor which is the value addition that is brought in by the candidate himself. Freshers with no experience would not have any proven track record on the same and hence lose out on the bargaining power”.
However, he also notes how college graduates looking forward to entering the workspace have reasons to be both optimistic and realistic: “At the entry level candidates are hired based on their attitude more than their skills (which is given through training that is a cost to company). Yet, freshers should still ensure that their first salary necessarily matches the industry base CTC or else they will play catch for their rest of life,” warns the 31-year-old.
Ways to score a great first salary
So, what are some of the ways that can ease the pressure on the otherwise dicey experience of having salary negotiations? To start with, many HR experts have previously listed knowing one’s worth, doing substantial market research, delaying salary conversations, quoting a salary range and evaluating the job perks instead of just monetary compensation among the tops tips that could help.
Research also indicates that setting a tall but realistic remuneration target improves negotiation outcomes. Nagesh concurs with the same stating that,
“Awareness about oneself and industry knowledge is a must. One should know the demand for their specialized skills in the market. A bit of market research, including that of a particular company’s goals and standing, can be useful if done as homework before sitting for the salary conversations”.
Buying enough time before quoting an exact number or a range often gives candidates much needed time to convince the employers as to why they are indispensable for the company’s growth. Malia Mason in her research from Columbia Business School found out that quoting precise numbers in salary negotiations will lead the employer into believing that one has done enough research to arrive at that particular number.
In another separate study, Mason and her colleague Daniel Ames also stated that quoting a range (that both includes and is above one’s actual target) increases the chances of getting better results, as it informs the employer of the candidate’s expectation in a polite and reasonable manner.
According to Nagesh, salary decisions are often dependent on factors like skills, demand for it, availability and location of the job. “Hence understanding the various salary components is key. Different companies will have different pockets and comparisons should be done carefully and effectively before being brought up at salary or hike negotiations”.
Word of advice for millennials
When questioned about the additional qualities and skills that recruiters check for while deciding starting salaries, Nagesh is skeptical in listing any decisive factors for he firmly believes that job experience is mostly unmatched for. However, “an ability to learn, collaborate, face challenges and take risks are some unique selling propositions (USP) that college grads can use to leverage the package being offered to them”.
“In sectors like IT, good grades and certificates in hot tech skills like SFDC or Big Data can give candidates a better launch pad compared to those who do not know them,” adds Nagesh, while also pointing out that these skills differ with different sectors.
Ask him for words of advice for the millennials entering the workspace in the coming years and Nagesh concludes with an interesting analogy:
“When on board a cruising ship, even a top athlete cannot run faster than the speed of the ship. But the same athlete can sprint faster than the ship when he is on the ground. Here, the cruising ship is the industry and the athlete is the employee. The employee’s growth is governed by industry growth. So, my only advice for millennials is to choose the ship wisely for the voyage decides the fate of their careers,”
he signs off.