How to Negotiate Salary with HRs? (2024)

44% of employees are unhappy with their current salary situations, but only 13% are willing to negotiate.

In the context of Indian Law, “Salary negotiation is the process of discussion and agreement among the candidate (or employee) and the employer (or the representative, the HR) regarding the compensation package and the job role and position.”
Salary negotiation with HR leads to a mutually agreeable salary and benefits package, aligning with employees’ skills, competencies, experience, and the company’s budget.

Everything is negotiable. Whether or not the negotiation is easy is another thing.

– Carrie Fisher

What is the importance of salary negotiations?

The most crucial reason to negotiate your salary is to earn real value for your hard work, efforts and time spent.

A survey estimates an individual who doesn’t negotiate ends up losing half a million dollars by age 60!

Here are the key reasons why it is crucial to have salary negotiations with HR:

1. Fair Compensation: It ensures that you receive fair compensation for your skills, experience, and the value you bring to the organization. Salary negotiation also ensures that employees are not underpaid.
2. Financial Well-Being: The salary of an individual directly impacts their financial condition. So, it’s essential to have a higher salary to meet financial goals like bills payment, investments, savings and improving overall financial stability.
3. Recognition of Skills: Salary discussion with HRs ensures you receive the right worth of your skills, competencies, and contribution to the organization. It also boosts your confidence, showing your trust in your abilities.
4. Long-term Earnings: A higher salary often has a compound impact on your earnings over time. It also helps in calculating future raises, bonuses, and retirement benefits.
5. Job Satisfaction: If you feel adequately compensated for your job, you feel motivated and satisfied. All this makes you feel more engaged in your job role.
6. Career Progression: Negotiating for a higher salary can positively impact your growth trajectory. It helps you invest in future education and skill development and climb the career ladder.

What are the steps in Salary Negotiation?

The 5 key steps in the process of salary negotiation are:

1. Research and Preparation:

• It’s essential to research industry standards and salary ranges for your role and experience level before entering into the negotiation. Use online resources, salary surveys, and job market data.
• Later consider your skills, accomplishments, experience, geographical location, and the company’s and industry size when determining your target salary range.
• Keep a list of your accomplishments, skills and contribution to show the positive impact you had on the company.

2. Initiate the Discussion:

• Once you have a job offer in hand, express your enthusiasm for the role and the company. Then show appreciation and indicate your interest in joining while discussing the salary.
• Always initiate the salary discussion with the right person and be professional and courteous during the conversation.

3. Present Your Case:

• During the discussion, it’s important to present your case with a clear and confident tone. Support your discussion with the research done, your skills, experience, accomplishments and contribution.
• Stress on the value that you bring to the organization and the way it aligns with the company’s goals and vision.

4. Listen and Negotiate:

• After presenting the negotiation, listen to the employer’s side as they might have valid reasons, like budget constraints.
• Be open to reaching a mutual agreement, and consider alternatives like performance-based bonuses, additional benefits, or an increase after the probation period.

5. Reach a Mutual Agreement:

• Engage in back-and-forth discussions and collaborate to reach a mutual agreement with HR.
• Once the agreement is reached, ensure that all the agreed-upon terms and conditions are mentioned in writing, either on the offer letter or employment agreement.
• Remember to express your gratitude to the employer for the opportunity they provided and your willingness to work for them enthusiastically.

6. Career Progression: Negotiating for a higher salary can positively impact your growth trajectory. It helps you invest in future education and skill development and climb the career ladder.

What are the Various Phases of Salary Negotiation?

The various phases in your employment where you need to negotiate your salary are:

Salary Negotiation for First Job

You mainly face this negotiation before embarking on your professional journey, making you both excited and nervous. This is the chance for you to be fairly compensated for your skills and potential.

Keep the following do’s in your mind before negotiating your first job’s salary with HR:

• Do Research: Gather a complete understanding of the industry and geographical location standards for the entry-level position.

• Do Express Enthusiasm: Show your excitement and interest to positively impact the company.

• Do Highlight Your Potential: Emphasize your relevant skills, education, and any prior experience or internships to show your worth.

• Do Be Realistic: Set a reasonable range based on research and your qualifications and skills.

Ideal Response: “Thank you for extending this offer to me. I’m excited about this new role and to be a part of your team. I’ve been researching the industry trends, and I feel that considering my skills, qualifications, roles and responsibilities for an entry-level position like this, I was hoping a salary in between the range of [desired salary range] will suffice. I am eager to bring forth my best effort and contribute to the company’s success.”

Salary Negotiation for Job Switch

Transitioning into a new job role or a different industry allows you to leverage your existing skills and experience in a fresh environment. Negotiation at this step is crucial as it helps recognize your real skills in the new industry and job market.

Here are the crucial do’s in this step:

• Do Assess Your Value: Keep the impact of your current skills and experience at the forefront while negotiating the package.
• Do Emphasize Transition: Highlight your ability to adapt to a new environment and transition smoothly into the new role.
• Do Maintain Professionalism: Always keep the conversation respectful and focus on the positive things you bring to the organization.
• Do Show Flexibility: Openly negotiate the salary and other benefits or perks offered to enhance your overall package

Ideal Response: “I am thrilled to receive this offer from your organization for this new role. I have thoroughly enjoyed my time in the [Previous Job Role], and I’m confident I’ll bring the same passion to the new role and create a positive impact with my [Key skills and competencies]. Given my background and the expertise I bring, I was hoping for a salary in the range of [Desired Salary Range]. I’m enthusiastic and hope to continue my successful run in the company with the new role as well.”

Salary Negotiation for Performance Appraisal

Negotiating your salary during the performance appraisal phase, it highlights your commitment and value to the organization. Here are a few do’s to guide your approach during this phase:

• Do Prepare Your Case: Make a list of your accomplishments, additional responsibilities, and the situations where you exceeded expectations.

• Do Highlight Impact: Shed light on the instances where your efforts have positively affected the company’s overall performance.

• Do Demonstrate Continued Growth: Showcase your new skills, certifications, or the training you’ve acquired to ace the new job role.

• Be Open to Feedback: Address any concerns while subtly advocating your accomplishments.

Ideal Response: “Thank you for discussing my performance and growth during this phase. Over the past year, I’ve been dedicated to [Mention the specific responsibilities], which has positively impacted [Result]. I’ve also completed [mention the training and certification courses] to enhance my core skills and competencies further. Considering these factors and the market trend for similar roles, I hoped to discuss a salary range between [desired salary range] for my performance, dedication and commitment to the organization.”

How to be a Good Negotiator?

It’s important to note that being a good negotiator requires a combination of skills, mindset, and strategies. These key strategies will help you ace subsequent negotiation sessions with the HRs.

1. Thoroughly surveying the salary:

Explore the industry benchmarks and trends for the roles by collecting and making accurate predictions using reliable sources and tools.

2. Collaborating and competing:

Strive to create a win-win situation where both parties are benefitted. It’s important to assert your value and contributions.

3. Role of Gender and Beyond:

Treat both parties with respect and fairness irrespective of their gender. Stress on your merit by emphasizing your skills, achievements, and qualifications unbiasedly.

4. Be flexible:

Be ready to face every type of circ*mstance and situation and adopt creative solutions to reach a mutually beneficial agreement.

5. Timing of the offer:

Initiate the discussions when both can engage without additional disturbances or time constraints.

6. Consider the whole deal:

Evaluate the package from every direction and ensure the long-term viability of the plan. For instance consider benefits, bonuses, stock options and growth opportunities.

7. Focus on the intent of the questioner:

Closely observe the questioner to understand their concerns and then craft suitable responses.

8. Be prepared to answer tough questions:

Anticipate the challenging questions and maintain your composure while answering them.

Do’s and Don’ts of Salary Negotiations

Here’s a well-curated list of do’s and don’ts during Salary Negotiations;

Salary Negotiation Mail

Here’s an example of a salary negotiation email that will help you initiate the right communication:

Subject: Job Offer and Compensation Discussion

What are the Appropriate Questions During a Negotiation?

It’s essential to ask the right questions during any negotiation, as it helps the parties to arrive at an informed decision.

For Salary Negotiation:

1. What is the salary range for this position?

This helps in framing the initial roadmap of further negotiation.

2. What factors were considered in determining this offer?

It helps in gaining the right insights into how the offer was calculated.

3. Are there opportunities for performance-based bonuses?

Inquire about the potential bonuses tied to your performance.

4. What benefits and perks are included in the package?

Gain a complete understanding of healthcare, retirement plans, vacation time and other options.

For Job Switch Negotiation:

1. What are the key responsibilities of the new role?

Understand whether they align with your future goals and aspirations.

2. How does this opportunity contribute to my career growth?

Assess how the new role fits into your career trajectory plan.

3. What is the timeline for transitioning into a new position?

Gain clarification on the doubts and confusions regarding transition details.

4. Can we discuss the potential for additional responsibilities?

This gives an understanding of the growth opportunities and expansion of the current role.

5. What is the company’s perspective on my value to the team?

This helps you understand how your skills align with the company’s goals.

For Performance Appraisal Negotiation

1. Can we review my achievements and contributions over the past year?

Discuss your performance and impact on the company’s success.

2. How does my performance compare to the company’s expectations?

Gain clarity on how the company will perceive your contributions.

3. Are there any opportunities for skill development and training?

Inquiry about ways to enhance your core skills and competencies.

4. Can we discuss the possibility for a salary increase or bonus?

Explore the various compensation adjustments for the new role.

5. How can I continue to excel and grow in my role?

Discuss ways to further contribute to the company’s success in a better way.

What are the Scenarios After Negotiations?

Successful negotiations

A successful negotiation is often a result of effective communication, collaboration, and strategic thinking. It helps strengthen the relationship between the two parties and opens the doors to new collaboration opportunities in the future.

Do’s

• Express Gratitude: Thank the opposite party for their willingness to reach a mutually beneficial agreement.
• Confirm Details: Ensure that all the agreed-upon terms are clearly documented in written format.
• Maintain Professionalism: Foster a positive relationship with the party.
• Follow through: Fulfill all the commitments made during this period, like signing documents or agreements.
• Deliver Results: Live up to the expectations and excel in any role or responsibility set during the negotiations.

Don’ts

• Become Complacent: While negotiation is successful, continue to grow and excel in the role.
• Overstep: Fulfill the agreed-upon requirements, but wait to push for big changes.

Unsuccessful Negotiations

An unsuccessful negotiation should be treated as an opportunity for growth and learning. These situations provide insights into areas like communication, strategy, or understanding that might need improvement. It also offers a chance to reflect, adapt and approach future possibilities with better skills and a fresh perspective.

Do’s

• Reflect and Learn: Identify areas of improvement by carefully analyzing the process.
• Stay Professional: Maintain respect and professionalism throughout and post the incident.
• Seek Feedback: Ask for feedback on why the negotiation failed to understand the mistakes committed.
• Consider Future Opportunities: Look ahead for any possibility of negotiations in the near future.
• Express Continued Interest: Politielty express your continued interest in the scenario, even if it was unsuccessful.

Don’ts

• Burn Bridges: Avoid burning bridges or breaking relationships with the other party.
• Rush Decisions: Avoid making hasty decisions and take time to reflect on the changes.
• Let it Affect Performance: Give your best performance and continue making the same impact.
• Harbor Negative Emotions: Let go of a negative mindset and approach the next tasks with a fresh and positive mindset.
• Lose Confidence: Continue to be confident in your daily work and your skills.

It’s important to remember both are a part of the professional journey, and how you handle them is important. Always strive to maintain professionalism, respect, and a growth-oriented mindset.