I recently answered the following question : “How do I negotiate salary in the Bay area?”. Given that my answer has been viewed over 1,300 times on Quora, I figured I would share it with my readers as well. So, here goes 🙂 :
Where you are located (or will be) does not affect *how* to negotiate your package.
I was a a global Head of Performance & Reward for multinationals. Believe me, there is a lot of incorrect information out there on how to negotiate your package !
1 -If you’re negotiating within your own company
1a -If you are going to stay in the same job.
Your best bet is to demonstrate to your line manager that you truly overachieved in the past year, and that you deserve more than the average increase based on the allocated budget. If it’s true, and your manager has a teeny bit of guts, then you should get a bit more than most employees.
Also remind your boss to look at internal equity if you have a feeling you’re underpaid compared to your colleagues. Don’t expect miracles and to be able to get double or triple whatever the budget though !
1b – If you are going to be promoted.
You should receive a larger increase in order to recognise your promotion already. Don’t forget to ask if your bonus opportunity will also increase, or if you’ll become eligible to (more) equity-based compensation. It may be a good opportunity to ask for a one-off payment (the argument here : “it’s a way to recognise my work but it won’t increase the permanent costs of the organisation”).
Please note that in both cases, your chances of getting something “above and beyond” the norm is higher in a smaller company than in a large organisation.
Why ? Because there usually are all sorts of controls in a larger organisation, in order to avoid abuse of the system.
In smaller organisations, there’s also a higher chance that your boss is the true decision-maker, or that whoever gives the final approval actually knows you and therefore, if you truly are a high performer, will be inclined to recognise that.
The stuff you read about negotiating more vacation days, a better health cover and so on ? I’ve never seen it done in the larger organisations. Maybe in the start-ups or SMEs…
2 – If you’re negotiating salary as a candidate.
2a – Base pay
Hiring is probably when it’s most expected to negotiate your salary, and when the hiring manager or recruiter/HR will have a bit more leeway.
I hope for you that you get offers, at the same time, from competing companies who will try to outbid one another in order to get you on board, as suggested by another person in the original Quora thread :-).
But, in case you’re not Superman and get “only” one offer, you can still negotiate your salary.
Companies often have different ways to set up their packages.
You’ll have to compare what you currently earn, including in benefits, to what the standard package would be at the new company. In the US, there are many sources of pay information that are available to the individual, including Glassdoor and Payscale. Use them to give you an idea what you could expect.
You can (and should, in my opinion) always ask for more base pay, and take it from there. (My view, loosely translated from French, is “If you don’t ask, you won’t receive”)
Most companies have a range of “acceptable salary” for positions within a certain level, and will be able to increase base pay within that range. Remember however that if you come in right at the top of that range, you can most probably say goodbye to future salary increases as your salary “has” to stay within the range – until you get a chance to be promoted to the next level up.
2b – Beyond base pay
What you can maybe negotiate relatively easily, beyond base pay, is a form of sign-on bonus/equity compensation.
Be ready to offer that you’ll understand if it pays over a period of time, so that the company feels there’s an element of retention. Not all companies will be ready to go for it, but it’s worth taking a chance.
Again, if you’re about to join a smaller organisation, you have a better chance of finding flexibility on the employer side, and you may be able to negotiate a better bonus, or more vacation days, or a bit better health cover.
Forget negotiating these at most large organisations – it just won’t happen, because there are rigid rules in place and systems are designed to deal with large numbers, not with exceptions.
3 – Finally, remember that in a salary negotiation, it’s all about the win-win.
For the company to give you more, you have to demonstrate the value that you’ll bring it in the future. What do *you* bring to the table in this negotiation ?
The organisation has to feel that it’s worth investing in you.
This is more easily achieved if you can demonstrate a track record of success, or that you possess certain skills that are relatively hard to find.
So rehearse how you’ll explain what you’ve achieved so far so that the organisation can “project” it on you in the future, and work on keeping your skills bang up-to-date.
On to you, my readers ! Do you have any tip to share, a technique you used to successfully negotiate salary conditions and that can help others when their time comes ?