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There are many ways a company can go about recognising the work of its employees. It can be done through promotions or even special rewards for jobs well done. And while these are certainly welcoming from an employee’s point of view, most will also agree that, when it comes to recognition, few things mean more than a pay raise.
Increasing your professional income is also vital for your career advancement and progression when and if you decide to move on to another role, whether it is in the same company or not.
Ahead, we will explore how employees and job seekers alike can evaluate their worth as contributors to the company, as well as how they can negotiate for the salary amount and remuneration package they deserve, be it during job offers or at annual appraisals.
Related: The highest paying jobs in Hong Kong
Not everyone is a born negotiator. Like how price-bargaining is an acquired skill, successful negotiation also requires a very different mindset. Most candidates need to do more when negotiating for a higher salary.
The first rule when you go into a salary discussion is to never settle for the first salary amount put on the table.
Just because the salary offer feels enough to cover your expenses doesn’t necessarily mean it is the market average. As such, it is critical to do your market research and know what your role is worth before you step into an interview and negotiate for a higher salary.
One way to do so is via our Salary Comparison Tool, which gives a comprehensive overview of all major sectors in various markets, the key roles and functions involved, and their respective salary estimates.
This will allow you to calculate the average salary range based on your sector, location and work experience. This salary tool is updated annually to reflect current industry norms and average salaries in the current market.
You can also do more research on sites like Glassdoor, talk to people in the industry or even a recruitment consultant who could give you the latest updates. With research gathered, you can enter a salary negotiation more confidently.
Your value to the organisation is sometimes more than the position you are applying for. For instance, if you are applying for the role of a marketing director with 20 years of experience already under your belt, you will be able to command a certain amount of salary.
However, suppose you are applying for the same role with the same industry experience but with added bonuses of entrepreneurial background and experience in Search Engine Optimisation and social media marketing. In that case, you will bring many skill sets and value.
Furthermore, if you know that the company you are applying for does not have, say, an SEO-driven content marketing strategy, your knowledge in that area will suddenly be worth a lot more.
Even though the job titles are the same, the difference in the job descriptions can be pretty stark. These peripheral skills you have developed over the years will allow you to take the industry standard regarding salary and increase it.
It is also always a good idea to familiarise yourself with the industry, find the most in-demand skills and bank on those during your negotiation.
One mistake that many job candidates make is to base your salary negotiations on your last drawn salary. While earning more than your previous job is always better, using your last drawn salary as a yardstick is by no means a good gauge.
Unless you feel you have gained zero skills since your last job, ignore your previous salary. Instead, look at your objective value to the company and compare that to the industry standard that everybody else is getting.
It is also not uncommon for job descriptions to require candidates to submit their previous salaries. Reserving the discussion for the interview is a good idea. Revealing the amount even before the interview will put you at a significant disadvantage.
If you are applying for a new job, and the hiring manager or recruiter asks for your last-drawn salary right away, respond with something like, “I’d like to find out more about the position and the responsibilities, what the team’s like and the company culture before discussing salary. Since you mentioned, may I ask what salary range you’re considering for this position?”
Whether they give you a number slightly lower than what you have in mind, let them know and say you would still like to learn more about the role. After that, you can demonstrate how your skills would make you a valuable employee and then work on salary negotiation when you get the job offer.
However, if the salary range is way lower than what you have in mind, ask the hiring manager if the amount can be adjusted for the right hire. If the company has a fixed budget that can't go higher, it would be best to decline the interview and move on. Eventually, you would have to share your latest salary number.
In the Hong Kong market, whether working with an MNC or local company, many employers request the last drawn salary before being able to get approval for the hire. This serves as justification for the proposed offer and is often a set part of the administration process, says Gabriel Nam, Partner (Asia) - ESG, Strategy & Transformation at Page Executive Hong Kong and Singapore.
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According to research by Columbia University, USA, precise offers are potent anchors: Conciliatory counteroffers and attributions of knowledge in negotiations in the Journal of Experimental Social Psychology, you should ask for a specific number rather than a round number in any negotiation. For instance, you should ask for $7,346 and not $7,400.
The research found that when you provide a more precise amount, it implies that you have done more extensive research and are more informed of your market value. You would likely get an offer closer to what you are looking at. This can be even more persuasive if you can back up your request with data or other evidence.
If the company cannot offer you a higher salary, you can also find out what are the KPIs to achieve in the next six months and ask the hiring manager or your current manager if your salary can be reviewed in the months ahead at that point. Also, calling it ‘salary negotiation’ is, admittedly, not accurate, since you are actually negotiating more than just the base dollar value. Aside from the base salary, you are looking at the basic benefits that come along with your employment.
For instance, the salary on offer might be lower than the value you have in your head. However, the benefits inside the remuneration package that come along with the salary might actually be attractive and more than compensate for the balance. As a job applicant, you want to take these additional benefits into consideration when negotiating for a raise.
If the salary on offer isn’t enough, perhaps you can negotiate for other forms of compensation in your benefits package, such as better health plans, flexible work arrangements, additional leave, training opportunities etc. And while we are on the point, don’t be limited by your imagination.
There are plenty of benefits beyond the conventional, from tuition assistance to a signing bonus. Just remember: this is a business transaction, and everything is negotiable.
Related: How you can be highly effective in a role from day 1
During salary negotiations, a good idea is to give an amount on the higher end and work your way down from there. If the higher offer is accepted, then it is good news for everybody. If it is rejected, adjust accordingly and try again. After all, what’s the worst thing that could happen?
Rejection means you need to recalibrate and renegotiate, and if the company cannot appreciate what you can bring to the table, at least you know to take your expertise someplace else.
Remember: if you don’t ask for a pay raise, you will likely not get it; if you do ask for a pay raise, there is at least a chance that you might get one.
At the end of the day, salary negotiations have no absolute guarantees. Beyond the value you can bring to the company, there are many considerations from the employer, HR point of view and factors, such as tight budgets and even tighter competition.
That said, if you don’t even attempt to negotiate salary, you are doing yourself a great disservice in the long run. So do your research, enter a negotiation and take the conversation on from there.
Ready for your next career move? Look through our job portal or submit your CV.
Read more:5 steps to creating your career planHow to succeed at a panel interviewHow to ask your boss for more responsibility
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