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Salary negotiations are often some of the toughest discussions you will face over the course of your career. We have all heard of friends or colleagues who have landed their dream job “getting paid a fortune” where our initial thought is: “How did they manage to get that deal?” We often attempt to assess our own work with a dollar figure greater than the one we earn. So, did your friends get lucky or is there a science behind negotiation?

True market value

In truth, there is no science to negotiating a better deal. The successful negotiator understands the playing field and the rules of the game. We have all been there, trying to judge the moment and to work out just how well a deal you can negotiate for yourself with a current or future employer. What it all boils down to is simple preparation, and knowing your true market value, rather than your perceived value to a firm. These two “values,” whist appearing similar, are actually polar opposites.

True market value is something you can actually demonstrate to backup your demands, often calculated via information that’s in the public domain like salary surveys. Perceived value, on the other hand, is more akin to a game of poker, where you are always trying to guess how far the employer is prepared to go, without precedent, so it’s purely a gamble and that doesn’t allow you to exude confidence in your negotiations. In the end, preparing and understanding your true value, with objective information as an aid will provide you with the most effective tool in negotiating salary.

There are often times over the course of your career where you will feel you are not being properly compensated by your employer. This may encourage you to look for new opportunities or, alternatively, you may look to approach your current employer to alert them of your position. Whichever path you choose, you will need to be able to backup your claims; researching across various reputable sources is a strong starting point. Recruiters, especially those who specialize in your particular field, will be able to impartially advise you, based upon historical work and assignments they have worked on. Depending upon your chosen career, there are also ‘salary surveys’ published by reputable companies who benchmark compensation and benefits across the marketplace. Most human resource divisions would have copies of at least one of these surveys for you to reference, but alternatively you may find the information available in your local business library. Although it’s not as common these days, salary information may well be posted alongside job advertisements, and cross referencing this could be extremely important to put you on the right track.

Other situations that can and do occur is when a role changes internally and doesn’t get reclassified, for example, the scope of your job broadens, or your responsibilities increase but your salary gets forgotten. In these cases, it’s actually a very sensible tactic to bring this to the attention of your line manager and/or human resources, who, if they agree with your case, will look to have your role re-assessed.

Negotiating your compensation is not just about the salary, but also the working conditions; the benefits package and taking less money while having the freedom to work part-time from home if that is enticing to you, for example. Getting a comprehensive understanding of a firm’s standard benefits package is good preparation, but also speaking to other team members can help. You must be aware of the pitfalls and tradeoffs from your current employment situation: for example, if you have been with your firm for 10 years and get 25 days paid vacation, but your potential new employer only offers 15 days to new recruits and there is no room to bargain, are there other things you can negotiate for yourself such as flexible working arrangements, private health care, pension plan, etc.?

Interest-based negotiation

In addition to preparing and understanding your true market value from a financial perspective, it is also helpful to understand what motivates you to make more money or receive more benefits in the first place. The concept behind understanding one’s motivation fuelling the “position” in any negotiation, not just in the workplace, stems from interest-based negotiation.

Focusing on a party’s interests in negotiation is effective because quite often one or more parties focus on what it is they’re asking for, as opposed to why they are asking for it. Interest-based negotiation works because in most situations, the mutual benefits of reaching an agreement far outweigh the costs of not agreeing.

Example: A valuable employee asks for a 20 per cent raise. On its surface, the negotiation pits the position of the employee (a 20 per cent raise) against the position of the company (not wanting to spend more money each year); however, a further analysis of the situation shows that the employee’s position of a 20 per cent raise is motivated by wanting to feel more deeply appreciated by the company, as opposed to needing 20 per cent more money. If the parties do not look at what the motivations of the employee are then the worst thing that can happen is that they do not reach an agreement and the employee resigns. By understanding the true interest of the employee, the employer can find alternative, possibly creative, solutions that are in line with both parties’ interests.

Interest-based negotiation is multi-faceted, but it starts with reminding yourself not to get entrenched into positions and to focus on the motivations and interests of you and the other parties.

James Bell is a partner at Meridia Recruitment Solutions, a Knightsbridge Robertson Surrette company.

Negotiating a salary with confidence can require many skills, however, it’s also about facts and figures and making a case that you can justify.

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