What determines Your Remuneration?
Before you even begin salary negotiations, you need to recognise the contributing factors that determine your offer package. This will empower you to negotiate on each factor to build a compelling case as to why you should command a premium over the next candidate.
These factors are summarised below:
1. Demand for your skill/network/knowledge
Your ‘value-addedness’ to the company is usually the sum total of the skill/network/knowledge/expertise that you can bring to them.
If the skills that you have are rare and your market knowledge deep compared to others in the talent pool, your bargaining power increases.
2. Your track record
Having a particularly valuable skill won’t matter if you do not have a recent track record of success in that area.
You may have been a top surgeon but if your last five patients died on your operating table, you might have a tough time convincing people you are really good at what you do.
Highlight your Stellar Track Record and you will have an easier time negotiating your salary.
3. Your years of experience
According to Author Malcolm Gladwell in his book, “Outliers”, he suggested that it takes around 10,000 hours to fully master a skill. Hence, the more experience you have at the job or in the industry, the more peace of mind the employer has that you are able to do it well. Have you hit your ten-thousand hour mark yet?
Be ready to list your extensive experience at the interview.
4. Your qualifications
For certain technical roles or specialised industries, having specific certification can add a premium to your candidature.
Sometimes, having a ‘branded’ degree from Harvard, Oxford or MIT further enhances your positioning for the job. Note the term “Sometimes”.
5. The amount of work/scope the job requires
Is the role a local, regional or global one? Salary bands increase with similar increases in scope and if the job is going to keep you up all night with conference calls to some third-world country, there must be a premium.
Besides geographic scope, other considerations include whether this is an individual contributor or a team leadership role or a single or multiple portfolio one.
Often, salary commensurates with the revenue size of the business too – a person handling a $50m one will not command a high a package as someone in charge of a $500m one.
6. Your employer’s budget
No matter how qualified you may be for a role, the final package is often dictated by the company’s budget.
A technology client of mine has a policy of paying top dollar for top performers, believing that ‘what you pay is what you get’, often being flexible and creative for the right candidates.
Over the years, I have seen the fruits of such a strategy and am glad to say that it works. On the other hand, I have seen companies who stick rigidly to the budget set up HR – no amount of negotiation can alter what has already been cast in stone.
Now that you are familiar with the ‘levers’ that affect the final package, you will be better prepared for the salary negotiation ahead.
In our next article, we will highlight ways in which you can negotiate for a higher starting salary by selling yourself correctly based on these components. Stay tuned!
If you have any questions or are going into a Salary Negotiation, drop us an email at email@example.com and we will be happy to see how we can help!