In September, a 30-year-old Kolkata-based marketing content writer was offered a managerial position in Mumbai by a marketing firm. The first offer was a 15% hike on her last cost to company (CTC) figure, including all expenses. She insisted on an industry-standard 30% hike. The HR person explained that the company didn’t have an adequate budget and had to hire two more people under her, and offered to bill her hotel costs in Mumbai for 14 days instead of the five initially offered, after she moved. She accepted.

A month later, she discovered that someone with five years’ experience, and junior to her in the company’s hierarchy (she has 12 years’ experience), was earning Rs1 lakh more than her. “I feel terrible even though the work is okay," she says. “Somewhere, they sensed my eagerness in moving from Kolkata to Mumbai and the need for a job and so negotiated my worth down."

This is not a new story. HR managers, and even hiring firms, are incentivised to keep hiring salaries low and negotiate hard with individuals. Which is why, the first and foremost rule for good negotiation is that you should be able to walk away if required, says Kanchan Mukherjee, professor, organizational behaviour and human resources management, Indian Institute of Management, Bangalore. “Desperation or your need for the job shows in your body language, how you speak, and that’s used by companies to hammer down salaries," he explains. In India, with high competition for jobs, this desperation level is higher, giving an edge to companies.

“Our research shows that you will end up losing up to 2-4 lakh per annum on a base salary of 10 lakh if you don’t negotiate," says Soujanya Vishwanath, co-founder, Pink Ladder, a career support company for women based in Bengaluru.

Start early

The negotiation starts with the first interview. “The interview is all about building your bargaining power," says Mukherjee. “You need to make the company and the interviewer want you and realize the value you’ll bring. The more the company wants you, the better you will be at the salary negotiation stage." Your aim should be to make the interviewer feel you are THE person, the employee they need to bring on board to solve that particular problem. To do this, do thorough research for the position you’re applying for. Research online, talk to ex-employees, understand the company’s objectives and how your role will help it achieve them. “If this build-up is weak, the negotiation later will be weak," he says.

Evade the salary question

Employers generally ask for your last salary and give you a 15-35% hike on it. This salary could be way below the market rate if you haven’t moved in a while, says Luis Moniz, executive and career coach at Mumbai-based consultancy FrontRunner Career Advisors.

If it is the company which has first reached out to you, or is keen on recruiting you, you can try to evade the salary question. “Request them to give you an offer," he says. “If you absolutely must share your last salary, share a range." This tactic, however, may not always work.

Do your research

Find out your market value and what the employer is willing and able to pay for the role, says Jennifer Coleman, career coach and executive director, The Armstrong Center for Alumni Career Services, Darden School of Business, US. “Compare with salary data-sharing tools like GlassDoor, LinkedIn and TransparentCareer to figure out a range for your salary," she says.

Other than online tools, headhunters and recruiters can be extremely helpful in figuring out a salary range. Develop a couple of such relationships, suggests Coleman. “Return their calls and emails, learn from them and try to be helpful to them. If you aren’t looking now, you can still benefit from the information and you can help by making a referral," she says.

The most important source, however, is your network. “Think of former mentors, managers, or senior colleagues that you have relationships with who might know what the salary range is for your target role," she adds.

Question the initial offer

Clarity on your offer letter will help you build up arguments when you come up with a counter offer. For example, say, the employer originally gave you a range of 12-13.5 lakh for compensation but your initial offer comes in at 12.05 lakh. “Ask why you’re at the low end of the range. Hearing the answer helps you formulate your response," explains Coleman. In addition, get to know all company policies on travel, leaves and other benefits. Get a job description, a start date, understand the process of future evaluation, information about raises, when benefits like health coverage will start, sign-on bonus, etc. All this will help you understand how to negotiate.

Trial runs

Practise negotiating with a coach/mentor before the actual negotiation, says Vishwanath. “Prepare a list of all your achievements, and read it to yourself before your negotiation so that you are in a more positive state of mind, be more appreciative of your efforts and achievements, and this will reflect positively in the way the company approaches the negotiation," she adds.

Base salary should be the first focus of any negotiation since it will be the foundation for all future compensation – annual bonuses, commissions, merit increases, future offers, even stock options and provident fund and insurance. “Try to negotiate the base salary before talking about one-off elements like signing bonus or other elements on the table," says Coleman.

Work on other benefits

Many a time, especially if the company has more than 500 employees, there may not be much flexibility in India when it comes to the base salary, says Mukherjee. In that case, negotiate all aspects of your salary, including bonus, commissions, signing bonus, stock options, number of casual leaves, flexible time arrangements, childcare and relocation benefits if you are shifting cities. “Try to add in additional perks like cars, drivers, annual vacations, reimbursable expenses, club memberships and stock option plans," says Shiv Agrawal, managing director, ABC Consultants Pvt. Ltd, a Delhi-based recruitment services agency.

“These variables many a time add up to a lot of benefits that make a far better deal than a big salary." Raise one topic at a time, ideally face-to-face with the HR representative or hiring manager.

Find out your market value and what the employer is willing and able to pay for the role. Photo: iStock
Find out your market value and what the employer is willing and able to pay for the role. Photo: iStock

Know your walk-away

Be clear on what’s a make or break for you—salary, vacation, severance, non-compete agreement, nice office? What’s the minimum you would accept, a limit where any lower and you would walk away, and what’s the level at which you would be reasonably happy? “Be mentally prepared to walk away if the offer you receive is not up to the standards of the role or position in discussion," says Agrawal.

Through it all, remember that the people you’re negotiating with might become your colleagues. Don’t haggle on each and every point and don’t be arrogant or belligerent. “Those are obvious negotiation killers," says Mukherjee. Be respectful, even when you are disagreeing. Your behaviour will be noticed. They might consider you good or bad for the team by the way you negotiate, he explains. Even if the negotiation falls through, thank them and walk away.

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