1. What is a compensation package?A compensation package is what you earn in exchange for your work—and what’s on the table for negotiation. A typical compensation package is based around wages. Most employers also present financial incentives like signing or performance-based bonuses, opportunities to purchase stock options, or profit-sharing plans, where a portion of yearly profits is divided among employees. Compensation packages typically also include other benefits, like paid vacation, health insurance coverage, maternity leave and a retirement plan. Some benefits, like worker’s compensation insurance and Social Security, are legally mandated. Then there are the perks, like tuition reimbursement, gym membership or an employee discount. If you work at Facebook, expect free meals and snacks. Four Seasons employees can snag free nights at all the hotel chain’s properties. These aren’t on the table for negotiation, but benefits like flex time may be. According to the Bureau of Labor Statistics, benefits account for about 30% of employee compensation. You can ask HR about the dollar value of the benefits if you want to see how they stack up against other offers, but keep in mind that money isn’t necessarily the most important factor.
2. What should I do to prepare for the salary or raise negotiation?You want to walk into the conversation with a solid sense of what you’re worth and what you can contribute to your employer. That way, you can make realistic requests—and then defend them. Start by digging around for an average salary for your position. Websites like Salary.com and PayScale.com can help you get an idea of what’s typical for someone with your job and skills, and GlassDoor.com can even give you a peek into what’s standard at your company. Consult with mentors and others in your industry to get a sense of what others in similar positions in your field are making. Use this information to come up with a target salary goal. Choose a few extra benefits (More vacation? Better health insurance?) that you’d like to get if you don’t get that salary. That’s pretty much all you need for salary negotiations with a future employer. If you’re looking for a raise with your current employer, first make sure that you deserve it. If not, then come back in a few months! If you feel you’ve earned it, compile a list of your major contributions and accomplishments, with an eye toward solid numbers and your department and company-wide goals. After crafting a compelling argument as to why you deserve a raise, practice your request with a friend or in the mirror.
3. Just after I’ve gotten a job offer, how do I convince my future employer I deserve a higher salary without putting her off with the request?If you’ve landed an offer and have started negotiating, your future employer already knows you’re a catch. You’ll never have more power to boost your income than you do when you’re holding that offer letter. And getting a big jump when you start a new job will make all your future raises even bigger. That said, approach the conversation confidently, but not aggressively. When the company tells you its offer, keep a poker face and say that it was less than you were expecting—even if it’s more than you could have imagined. Explain that you’re excited about the position, but that you’re also considering other options. If that doesn’t get them to sweeten the deal, don’t be afraid to mention any competing offers you have on the table. Know when to stop pushing, too. Most employers enter a negotiation expecting that the candidate will ask for more, and you want to negotiate enough to get the extra that they were prepared to give. But use your knowledge of comparable salaries, and when you sense that you’ve reached the limit, be gracious about accepting an offer.
4. How do I convince my current employer that I deserve a raise?If you’ve been logging your recent accomplishments and quantified how they’ve helped the company reach its goals, you’ve already done half the work. (If not, you’re not yet prepared to negotiate for a raise!) Once you’ve got your list of awesomeness compiled, the only other things you have to do are:
- Time your request to follow on the heels of any victories, such as reeling in three heavyweight clients in six months or winning a professional award.
- Catch your boss at a time when she’ll have the time and energy to deal with your request—not when she has three huge deadlines coming up.
- If you sense that budgets are tight, suggest extra work you can take on that will help the company further its goals.