What You Must Know Before Negotiating Your First Salary
By Adrian Tan from CareerLadder
You’re having your first interview today. You’ve attended career workshops and presentation seminars, your resume brims with impressive keywords, and you’re dressed to kill. The interview session was 2 hours long but you believe that you’ve nailed it.
However, your confidence crumbles when the interviewer brings up the subject of salary. Should you give yourself more room to negotiate and ask for more? Are you killing your chances? What will happen if the next candidate asks for less?
Salary negotiations are unnerving, especially when the difference of few hundred dollars might lead to the company choosing another candidate. So how do you find the right compromise between company budget restraints and your expectations? What you need to do is to consider the following factors: market norms, business conditions, the locations of the employer’s headquarters, and your own ability to close a deal.
Most pay raises are issued at the start, middle, and the end of the year. It would not be to your advantage to have negotiations outside of these periods, as the employer would still be using the old equity structure. A simple case of timing makes a world of difference. It has also been proven that taller people get paid more. This is according to a study in the Journal of Applied Psychology (Vol. 89, No. 3). The findings suggest that every inch above average may be worth USD$789 more per year. It could possibly be a case of perception as some may view tall people as more leader-like and authoritative. So be sure to stand straight, and consider going to your interview with that three-inch high heel if you are a lady.
You need to get a sense of what the benchmark is as well. This information can easily be retrieved from sources like the Ministry of Education’s Graduate Employment Survey and the Ministry of Manpower’s Basic Monthly Wage Report. Aggregate all the data and you should arrive at an average that is fairly accurate. The salary component is just one component in the compensation package. There are non-monetary components that can be considered crucial as well, such as the number of leaves, medical benefits, or the working hours. If two jobs pay the same, the one with more working hours should be perceived as less attractive.
The ability for any employer to be able to pay what you want is largely dependent on business conditions. Before the bankruptcy of the Lehman Bros, banks were paying like crazy to attract talents to their company. After the crisis hit, you would be considered lucky to still have a job. Graduates that entered the workforce in 2001 (Dotcom Crash), 2003 (SARS outbreak), and 2009 (Global Financial Crisis) had to adjust their expectations or risk pricing themselves out of the tight market. So keep this in mind when negotiating your salary. Even if market conditions are ideal, you also have to consider the state of industry that you’re entering. Generally speaking, banks pay more than restaurants. If you are staring at a sunset industry, no amount of negotiation skills can help you get a competitive salary.
Next we have to understand the locations of the employer’s headquarters. It is highly probable that they would be transacting mainly with the currency of their home country. Take note of the exchange rate between that country and Singapore. One Sterling Pound is equivalent to at least two Singapore Dollars, so an operation in Singapore will cost a British company less than 50% after exchange. Pouring a bit more into the salary budget would be insignificant for them, allowing you more room to negotiate.
Closing the Deal
All the above steps will help get a rough idea of what your salary should be. Once all this preparation work is done though, you need to actually close the deal. When discussing your salary, make sure to observe your interviewer’s reactions and pay close attention to the non-verbal cues. For example, if they fold their arms and lean backwards, it would probably mean that they are not receptive to the number you’ve given. Play it by ear and react accordingly.
Finally, you can help close a deal by eliciting an emotional response from the other party. If you have other interviews, tell the person you’re negotiating with that you need to give a response to those interviews soon. This injects the element of urgency into the negotiation, making them respond to you sooner instead of spending the time to speak with other candidates.
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