How to Negotiate a Better Salary

By Indeed Editorial Team

11 February 2021

Sometimes an employer might offer you a salary that might not meet your expectations or needs. However, it's often appropriate to negotiate a better salary or even to ask for extra perks. Knowing how much your skills, experience and expertise are worth are all important steps to negotiating a better salary and advancing your career. In this article, we look at the best ways to discuss improving your salary, including negotiating tips and the best time to ask for an increase.

What is salary negotiation?

Salary negotiation is a discussion between an employee and an employer regarding their remuneration package. You might initiate a salary negotiation in order to improve your current position within a company or with a prospective employer before accepting a job. You may ask for a higher salary or better hourly wage if you believe that they are doing a great job or add a lot of value to the team and company. An employer then negotiates back and could accept your requests or offer alternatives to a direct salary increase.

Salary negotiations ensure that you feel adequately compensated for your time, effort and loyalty to your company. The process also allows you to keep advancing in your career and establish a foundation of growth with your employer.

When is it appropriate to negotiate salary?

Deciding when to negotiate your salary can be just as important as the negotiation skills you use during your conversation. The following are times during your career or during the hiring process when you might consider negotiating salary.

  • At the end of a positive hiring process: You might be offered a job after a positive hiring process but feel that your qualifications determine a more competitive remuneration package.

  • When getting a promotion: Your company might offer you a promotion, which you feel also deserves a higher salary.

  • After gaining further qualifications: You might have completed a degree, training program or other additional qualifications that call for more competitive compensation.

  • After taking on leadership roles: More responsibilities often lead to a higher salary or other increases in remuneration.

  • When your level of experience no longer matches your salary: If you have worked in a role or organisation for a long time, you may have gained enough experience and demonstrated loyalty that calls for a salary increase.

  • When salaries in the market have increased: If the salary for similar roles in your industry has increased, you may ask for a more competitive salary.

Can I only negotiate monetary pay?

You might think of a salary as simply the number of pounds that your employer pays you each year, but a salary can also include many benefits aside from money. Your salary is a complete compensation package, so you can also negotiate for other perks and privileges, including:

  • An increased number of paid holiday days each year

  • Additional sick time or other paid leave time

  • Extra payments through company stocks and shares

  • A company car or other transportation assistance

  • Medical insurance

  • A company pension plan

  • Flexible working hours

  • Remote working opportunities

How to prepare for your salary negotiation

There are many ways to prepare for you upcoming salary negotiation and ensure that you can effectively ask for increased compensation and come to a compromise with your employer. Here are eight steps for getting ready for a salary negotiation:

  1. Calculate your value

  2. Research the market

  3. Prepare your reasons

  4. Rehearse your negotiation pitch

  5. Explain your work-related expenses

  6. Be flexible

  7. Don't be afraid to walk away

  8. Thank the employer for their time

1. Calculate your value

Knowing your own value is the most important step towards negotiating a better salary with your employer. You need to know how much you can offer an employer. How much you should be paid typically comes down to several different factors, including your:

  • Years of experience in the industry

  • Years of relevant experience in the role or a similar role

  • Amount of leadership experience

  • Level of education, training and other qualifications

Determine how much relevant experience you have and what basic and advanced qualifications you hold to understand your general employment level. For example, a person with five years of experience working in the industry and a degree in a relevant field is better able to ask for a higher salary than an entry-level candidate with the same degree but who has yet to gain experience. In this case, the experience may be more valuable to the company, and in return, may be more likely to compensate for that experience.

2. Research the market

Browse similar roles in the industry, and review what other companies are paying these employees. Be sure to also compare the qualifications and experience required for these positions to your own to make sure they're truly similar. For example, if you're applying for or are in a mid-level marketing manager role, you can review the salaries of others in the role with similar years of experience, education level, geographical location and company type to see what range your salary should be in.

Knowing the market average helps you to negotiate a competitive salary, which is one that meets or exceeds market averages. Negotiating to be within the range can ensure you're compensated fairly because sometimes, an employer might not know that they are paying below the national average and are happy to raise the salary if you bring this to their attention. Negotiating near the high-end of the range shows that you believe you are exceptionally qualified for the role and offer more than other candidates.

3. Prepare your reasons

Before you enter into the negotiating phase with an employer, have a precise plan of action and be ready to justify every argument you give for having a better salary. Prepare your reasons in detail and give examples to back up any claims you make.

For example, if you claim that you should have a higher salary because of the success you've given similar companies in the past, then be ready to go into detail on the projects you worked on, why they were so successful and how you added value to the project and the company. If you believe that your work has improved the company in some way, provide data to showcase it, such as sales increases tied to your work as a sales representative or improved customer satisfaction related to your work managing client accounts.

Related: Interview Question: 'What Are Your Strengths and Weaknesses?'

4. Rehearse your negotiation pitch

Organise the reasons, justifications and supporting evidence for your salary request into a cohesive pitch that you can rehearse before presenting to your employer. Before your meeting or call, practice your pitch with a friend or colleague and run through it by yourself whenever you have a few spare moments.

Consider rehearsing different scenarios and outcomes, such as possible rebuttals, questions or negotiation offers from your employer. For example, what should you say if your employer asks how much value you think you contribute to the team? What should you say if your employer offers extra holiday instead of extra pay?

5. Explain your work-related expenses

In addition to your qualifications, you can also explain any expenses you incur for travel, supplies or other work-related items. For example, maybe you live out of the way and must travel further than other employees to get to work. Part of your pitch could include that you are asking for more money to make up for those expenses. While this could lead to an increase in salary, it may also lead to a travel stipend, commuter pass or access to a company vehicle in addition to – or instead of – a pay increase. You may also begin a conversation about possible remote work opportunities as well.

6. Be flexible

Being flexible during your salary negotiations means being willing to collaborate with your employer on a solution or compromise. An employer might offer you a different salary package with more holiday pay or more convenient working hours if they can't directly raise the amount of money you're paid. Determine what value these other options provide you that may be just as beneficial as a pay raise. More time off to spend with your family or home-working opportunities might actually be better for you in the long run than working the same number of hours for slightly more money.

7. Don't be afraid to walk away

Your employer might not be in the position to offer more money, and the alternatives they've offered might not be enough for you. In this case, you might have to think about walking away from the negotiations if the offer doesn't meet your needs or qualifications. Before walking away though, ensure that you've tried all different avenues, such as asking for more holiday time or asking for flexible working hours.

You may also be able to pause the negotiations and come back to the conversation at another date and time after each party has had a chance to fully consider everything presented. This option may be best if parts of the offer work but other elements did not.

8. Thank the employer for their time

Whether the negotiation is successful – with you and the employer compromising on an improved remuneration package – or unsuccessful – with you having to say no to the final offer, be sure to express gratitude for your employer's time. This professional courtesy can show shows respect towards your employer and maintain a positive working relationship, no matter the outcome.