Know your worth when it comes to negotiating a salary increase, says a career coach
Salary negotiation “is a discussion process between two parties to come to a win-win situation”, says career coach Samantha Ng.
SINGAPORE: Three in five employees in Singapore want a pay increase of more than 6 per cent next year due to inflation and fears of a recession, a survey by global recruitment agency Robert Walters showed.
Negotiating a salary increase, whether in a current role or when looking for a new job, remains one of the most dreaded tasks for employees and job seekers here, according to a CNA commentary earlier this year.
However, with research and a game plan, salary negotiation does not have to be a daunting process, certified career coach Samantha Ng told CNA’s Work It podcast.
“When it comes to negotiating, I always think of it as a discussion,” said Ms Ng.
“Because when we use the word negotiating, (some people may) find that it's very daunting and feel like a cut-throat process. So I always say that it is a discussion process between two parties to come to a win-win situation.”
KNOW YOUR WORTH
“How much am I worth?” is a tricky but common question Ms Ng often encounters in her line of work.
First, all roles come with a budget – a range that a firm has set aside for a position, Ms Ng said, adding that an employee or a job seeker should try to quote within the threshold that the company is willing to pay.
A good reference would be to consult the market rate for a role and industry, she said.
Many human resource (HR) consultancies and research firms release annual studies and reports on salaries, offering a gauge for each role or industry.
Ms Ng added these can be found on some job portals or company review sites as well.
As firms can still differ within the same industry, networking and speaking to employees from the hiring company can result in a more accurate ballpark figure for a role, even if they do not reveal the exact salary, she said.
KNOWING YOUR WORTH IN A CAREER SWITCH
Ms Ng said that in a career switch, job seekers should be looking at the market range for a junior to mid-entry level, even if the role is completely different from the person's previous experience.
“(You) shouldn't be getting lower than a junior or entry-level (position) in a context. So always benchmark yourself against that,” she said.
This is because even without relevant industry experience, a person should still be able to identify soft skills such as stakeholder management or leadership capabilities that can help with salary negotiations.
With these transferable skills, job seekers should be able to negotiate for the higher end of an advertised range.
“So if the advertised rate is S$6,000 to S$10,000, instead of asking for S$6,000 to S$7,000, with the skills that you have to offer, you can ask for the higher range, maybe S$9,000,” said Ms Ng.
KNOW YOUR PLAYGROUND
For employees asking for a pay bump, Ms Ng encouraged them to first “know your playground”.
She advised employees to understand the structure of their organisation and how progression works in their firms, including success metrics and salary range.
Be strategic: Work smarter rather than harder towards the company’s and direct manager’s success metrics.
Similarly, job seekers should research a role and a company before that crucial first phone call with a human resource (HR) representative.
But more than doing homework, having a strategic conversation with the HR representative is of utmost importance, Ms Ng said.
“When the recruiter or HR calls you up and asks you what your expected salary is, this is the time whereby you will state a range,” she said.
“You must give them a range, don't give them a figure.”
“Once you give them a range that is within what you saw was advertised (or that you’ve researched), this is a good time for you to ask them, ‘What is the budget allocated for this particular role?’” she added.
Ms Ng said that job seekers often find themselves at the losing end when they fail to ask questions at every stage of the interview, including this stage where prospective employees can find out what a company’s budget for a role is.
“Always ask. The worst case scenario is they tell you, ‘I cannot tell you’,” she said.
“But the best case scenario is they will tell you, ’Yeah, your expectation is something that is within our budget and is open for negotiation’. And then you know that you're on the right track.”
KNOW THE RIGHT TIME
Sometimes, the “when” is as important as the “how”.
The performance review is usually a good time to negotiate for a pay rise, said Ms Ng, but she cautioned employees not to go into a meeting empty-handed.
Instead, arrive armed with facts, figures and statistics.
“Let your boss know this is what you’ve been doing. Your achievements, your outcomes – back them up with facts, figures and statistics. See what your boss has to say,” she said.
“Then whatever response your boss gives you, you can see whether this is a good time to bring out that you are looking for an expanded portfolio, higher pay, etc.”
Employees need to “be able to articulate with proof" as to why a pay rise is deserved, the career coach added.
KNOW THE RIGHT TACTICS
Ms Ng said that there are four main metrics that managers and firms usually use to gauge success: Increasing the top line in terms of profits, reducing the bottom line in terms of cost, maximising resources and customer retention.
Almost every role will have to deal with at least two of the four aspects, said Ms Ng, adding that employees should quantify achievements based on them.
“Use facts, figures, numbers. Don't tell them ‘I think I've done well, I have participated in this project’. Tell them what is the outcome of your doing. If you're able to quantify your role, your achievements, your values, based on four of these, you should be on the right track,” Ms Ng said.
Ms Ng noted that a bad practice for job seekers or employees would be to use offers from other firms to counter-offer or negotiate salary bumps, especially if done multiple times or if the numbers are untrue or inflated.
“Don't fluff things up, because the industry is small. If your boss has a lot of visibility or enough network, your boss will know. You're actually not giving yourself a good leeway in the organisation,” she said.
“So having an adult conversation and discussion … I think that is still one of the best practices.”
“Still, one thing to take note: Never reveal the company that offered you - don't do that until you have signed on the dotted line,” she added.
MORE THAN BASIC SALARY
Negotiating does not always have to be about a higher basic salary, said Ms Ng, adding that there are other forms of remuneration that negotiators should look at.
These include overtime pay, bonuses, commissions, stock options, allowances, medical benefits, leave, hybrid work arrangements, and the flexibility to do other jobs.
“When it comes to negotiating, there are so many components and it differs for everyone because our life stages are different. Maybe for a parent, flexibility is important. So you need to negotiate based on your life stage – what is important to you at that particular point in time,” Ms Ng said.
It is also important to constantly upskill when it comes to career planning and career management, as “our pay rise will never be able to beat inflation”, said Ms Ng.
Additional or enhanced skill sets, along with the aspiration to constantly learn and improve, could just earn an employee or job seeker that coveted pay bump, she said.
“With your skill sets and portfolio expanded, not only do you have more reasons to ask for a pay raise, it also makes you a lot more marketable. You can pivot easily in any kind of crisis.”