Whether you’re taking up a new job or hoping for a superb increment during the appraisal season, salary negotiations can make even the best of us nervous.
But fear not! With the right tools, strategies, and insider tips, you can turn salary negotiations into a game-changing opportunity for your career (and bank balance😜).
As India's No.1 salary insights platform, we’re here to share the secrets of successful employees who get the best increments and earn high salaries.
Why Should You Negotiate Your Salary?
Shreya & Rahul are both 25 years of age. Both have been offered Rs.25k/month in compensation. Rahul saw it as an opportunity to negotiate and raised his salary by Rs.5k. Each year they both receive a 5% increment. Guess how much they’ll each be making by age 60?
Shreya will be making about Rs.68k/month. Rajat, on the other hand, will be making Rs.81k/month! He would've made Rs. 4,78,200 more than Shreya over the course of their career. That’s the magic of asking for a raise the right way. Here’s how.
- Prepare Your Ask
Think of your “market value” as your price tag. It's calculated based on your experience, designation, location, and the demand for your skills in the job market. Knowing your market value helps you negotiate better, based on hard facts & numbers. In fact, a 2017 study published in the Indian Journal of Industrial Relations found that employees who were well-informed about their market value succeeded more in salary negotiations.
So, use the AmbitionBox "Are You Paid Fairly?" tool to calculate your market value accurately in just a few minutes! But, don’t stop there if you want an unbelievable increment.
Every company wants to outdo its competition; Even when it comes to your salary! So, it’s time to find out what competitors are paying your peers -
- Make a list of the biggest competitors of your company.
- Use the AmbitionBox "Browse Salaries" tool to check how much they’re paying employees of your designation & experience.
The DON’Ts Of Preparing Your Ask
- Don’t rely on how much your friends are making to decide your ask.
- Don’t tell your boss that you need a raise to meet your personal expenses/goals.
2. CTC vs. In-hand Salary
An increment in your salary can put you in a higher tax bracket, and increase your monthly deductions such as provident fund & gratuity. This can result in a lesser take-home salary than you expected, despite an increased CTC.
So, before you finalize the increment amount you’re going to ask for, use the “Salary calculator” -
- Enter your company name, designation & experience
- Type in the annual CTC you’re expecting after the increment.
- Choose the tax plan of your choice
And, ta-da! The tool will show you how much money you’ll actually be taking home after all the deductions. If it’s lower than your expectations, adjust & increase your ask.
3. Think Of Your Plan-B
“Best Alternative to a Negotiated Agreement”, also known as BATNA, is a powerful move professional negotiators use to stay confident. And, walk away from a deal if it’s not satisfactory. Think of it as your plan B but better!
Here’s how you can create your BATNA like a pro.
List down the best options you can rely upon if you don’t receive a raise. It could be a new job offer with better pay, a side job to give you extra income, or joining a full-time course to power up your skill set.
When your employer knows you’ve strong alternative options, they’ll be more willing to make compromises and give what you want.
4. Choose The Right Negotiation Style
A 2016 survey published in the Journal of Organizational Behavior observed 5 negotiation styles among its 149 participating employees - Collaborating, Competing, Accommodating, Compromising & Avoiding.
Employees who used collaborating & competing strategies to negotiate their starting salaries increased their salaries by Rs.3,35,000 on average. Employees who took a collaborative approach were also more satisfied with the negotiation process.
In contrast, employees who used compromising, accommodating & avoiding styles did not get any salary hike.
Tips To Negotiate In Collaborative Style
- Communicate the work you’ve done clearly. More importantly, the impact it had on the company’s growth. Try to use numbers to show your progress.
- Suggest ways you can add more value to the organization.
- Ask questions to understand your employer’s perspective & make their opinions feel valued.
- Avoid giving ultimatums such as “I’ll resign if I don’t get an increment”. It creates a threatening environment.
5. Build Your Library Of Professional Praise
Take screenshots/scans of every professional compliment mail, positive feedback, and certificate you earn throughout the year. Store it in a folder for reference during the appraisal season. Or, to lift your spirits whenever the demotivation-bug bites. Think of it as testimonials or positive reviews that’ll sell you as a valued & loved employee.
6. Discuss the System Before the Salary
Organize the negotiation process well in advance to prevent delays and have a super-focused discussion.
- Ask colleagues about the usual duration of an appraisal process to give yourself a realistic time frame.
- Ask your manager about the factors that’ll impact your appraisal the most.
- Don’t let “I’ve to ask the higher management” delay your increment! Enquire who all needs to be included in the discussion to prevent multiple meetings.
- Set the timing wisely so it doesn’t clash with other meetings or make you rush through the conversation.
- Prepare a meeting agenda that highlights the purpose of the appraisal, 360-degree feedback, scope for improvement, career development plans & objectives. Mail it to the attendees beforehand.
7. Use The Secret Of Professional Debators
Give your argument Shaktiman strength with the “switch-side exercise” used by debate champions. Write the down the 4 STRONGEST arguments of your opponent’s side - in this case, why you don’t deserve an increment in your salary?
Now answer them as well as you can. This will prepare you to tackle any disagreement that might rise in the meeting room.
8. Influence With The Power Of Psychology
When negotiating your increment, try to be the first to say the salary amount/percentage of increment you want. Your opponent depends on (and, even favors) the first piece of information they receive when making decisions. This is called “Anchoring Bias” in psychology.
To make anchoring bias work for your negotiation, ensure the salary you’re asking for is -
- Practical & supported by a reliable source like AmbitionBox
- On the higher side of the salary range for your designation. It’ll give your employer an idea of what's a good yet acceptable package.
9. More Options Are Better
Demanding a very high salary increase can put a lot of pressure on your employer and discourage them from even having a discussion. Especially, during these economic situations when increments are likely to decrease in India.
So, try to give 2-3 options. If your company can’t meet your expectations monetarily, lower your ask. But, request them to balance it out with better benefits, stock options, paid time off, and likes.
Research in human psychology confirms that offering multiple choices during negotiations increases the chance of reaching a successful agreement.
10. A Positive Mindset Is Your Best Friend
Walk into the room with a big smile and an optimistic mind. It makes you look confident. Do a quick breathing exercise/pranayam or listen to calming music to reduce the stress that can trigger negative emotions/ anger during the conversation.
A positive mind also lets you think quicker, solve problems in new ways, listen better, and explain your point logically. And, these are all of the supporting skills you need to make a winning negotiation.
Remember, as Indians we negotiate every day, almost in every transaction - from cab fares to vegetable prices. So, you already know the basics of the art of negotiation. All you have to do now is to polish your skills and add in these winning strategies to get the salary hike you deserve. Oh, don’t believe your neighborhood uncles & aunties when they brag about their bacchas making lakhs! Check out how much your peers are really earning here - AmbitionBox Salary Comparison
