Haven’t you negotiated with your parents as school kids to go for a movie or for a night stay at a friend’s place? You have to negotiate every day at work and at home.

Today, we will deal with negotiating a salary.

Step 1: Establish the band
One of the best ways to look at negotiation is through this one example.

Let’s say you are trying to sell a flat. How would you quote a price? What will be the basis for deciding the price range? There are three major aspects that will help you make an informed decision:

– The going rate or market value
– Paying capacity of the buyer
– What is the return on investment?

Similarly, for any employee, there are various aspects to consider:

– Market value of the job
– The value you will add to the job and what the employer will be happy to pay for the value added.
– The premium you are seeking to re-establish yourself in the new company

Step 2: Negotiation strategies
A friend told me long back, “Prashant, don’t ask for what you need. Ask for what you deserve. For all you know, you deserve more than you need. If you need more than what you deserve, anyway, nobody will pay.”

This is so true. Never discuss what you need. Always remember that you are paid in proportion to the value you add to the organization.

You need to establish what you bring to the table that will uniquely benefit the organization. That’s exactly where most freshers struggle when it comes to negotiation, as they do not have a niche and set of unique skills that will benefit the organization.

(If you want to learn more about building a niche, refer to this blog)

It is necessary for your employer to know how you will benefit his business. There is also a risk of negotiating more than your market value, as the organization might lay you off and replace other professionals available at more reasonable salaries or you might end up underperforming as compared to the salary you are receiving. Proper assessment of your worth is necessary.

Hence, during the negotiation, focus on:

– Determine your value
– Understand the impact of your skills
– Assess the return on investment for the employer

Step 3: Focus on maximizing money in the bank
Many times, I see salespeople negotiating their fixed pay to ensure they receive a higher base salary. While I understand their rationale, they forget that it reduces their credibility in the eyes of the employers.

As long as your fixed pay covers all your expenses, you are good to go! When you negotiate on variable pay, you are ensuring that the employer is confident of your ability to deliver. If you deliver and outperform, your job is secured.

Some points to keep in mind:

1. Keep your fixed pay at a moderate level
2. Focus on maximizing value, and negotiate hard on the variable pay if you are confident in your abilities to deliver. Variable pay makes it easy for the employer’s budget.
3. Make variable pay as quantitative as possible. Do not leave it to interpretation

Conclusion
Negotiation is not just about the salary you get, but about the value you add! These strategies, when paired with the right mindset and honest communication, will help you get the salary you rightly deserve!

Share your favorite negotiation tips and strategies below! Let’s help young professionals get the best out of your stories and lessons!

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Until the next time, keep learning!