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How to negotiate your next salary

A practical guide to salary negotiation, based on skill set and the value you offer to the business

Salary negotiation isn’t just about pay, it’s about establishing a relationship of equal footing and boundaries.

“So… how much do you earn?”

This is the dreaded question. Basing salary negotiations around current remuneration not only limits your personal salary growth, but also entrenches existing pay gaps across gender, race, and background. Immigrants for example often (although not always) start on lower salaries compared with their UK born counterparts; therefore adjusting salary based on “current” remuneration is never going to shift the dial.

This piece however is not a comment on the social order of things. It’s designed to be a practical guide to salary negotiation, enabling professionals to negotiate their own compensation based purely on skill set and the value you offer to the business.

The status quo won’t help you negotiate what you really want.

Most professionals encounter businesses that are open about the salary on offer, but they don’t really know where that sits in the order of things. We’re generally asked, “How much are you on?” But if you are underpaid compared to the job advertised, despite knowing you are well-skilled and experienced with the major requirements in the relevant sector, the game is rigged in the employer’s favour, not yours.

Let’s take a common example: A role is advertised at £80–100K, and you’re on £70K. The current order means you are asked, “How much are you on?” and you answer “£70K.” Your eventual offer is £78K, which is over 10% of your current salary; so you should technically feel happy about this, but you know you’re being underpaid. This scenario plays out again and again and again.

Negotiation sets the right dynamic between you and the potential employer.

In the scenario above, you are having to justify your worth from the moment you reveal your salary — you’re on the back foot. Is there a fairer and more democratic way to handle this? The answer is yes, but there is no doubt that it’s a riskier option in today’s climate (although hopefully not for long.)

Nonetheless, we have seen that those who take this step tend to have a much more fulfilling career and a better relationship with their employer.

Salary negotiation isn’t just about pay, it’s about establishing a relationship of equal footing and boundaries.

By answering the dreaded question straight away, you are setting the precedent that the employer is in charge, yet they haven’t even given you all of the information you need yet to make an informed decision. If you crave a more transparent, honest, and fair environment, then seeing this (pay) step through is very important, because it throws up the real values of a firm.

As the business landscape changes we need new rules and language to replace the old; we need practical approaches to driving change, and how we negotiate pay is top of that list.

So how transparent is the business you’re applying to?

When applying for a new role, you’ll find that companies tend to fall into three categories with regard to compensation:

  1. Totally transparent: clear about how much is budgeted for the role and open about how pay is managed across the board
  2. Semitransparent: clear about how much is budgeted for the role but no information on how pay is managed across the board
  3. Opaque: no information on either budget for the role or how pay is managed across the board

When interviewing with a potential employer, quickly ask for clarification on the budget or the role (which is completely fair to ask.) If you receive no candid response or they ask what you’re after before providing clarity, then you need to assess whether the environment is right for you.

Lack of basic transparency will inevitably seep into other areas of the business, which is outdated and inconsistent with the business climate of today.

Most professionals encounter a business which is semitransparent — you know the salary on offer, but you don’t really know where that sits in the order of things. In this scenario especially, a structured and confident approach to negotiation will help you determine a fair approach to your compensation.

Starting the negotiation is easy.

The alternate scenario:

Business: “How much are you on?”

You: “That’s a fair question, but it isn’t one I’d like to answer until I understand more about the company comp (compensation) structure. The role was advertised at £80–100K — how does that compare with the rest of the management team?”

You are not being opaque — quite the opposite. You will answer the question, but you want have a better understanding of their environment beforehand. You’re also reiterating what they’ve advertised — a subtle, yet powerful negotiation tactic.

Learn to spot patterns during the negotiation.

The employer generally responds in three ways:

  1. They give you total transparency.
  2. They ask you why you need to know.
  3. They shut down completely.

Opacity and lack of engagement is a red flag.

Response 3 is pretty easy to get through. You can politely spend two minutes explaining why you’ve asked the question, which is because you’ve experienced situations where pay was shrouded in secrecy and it made for a toxic environment — consequently, you want to find a company where pay is handled fairly. The subtext to this being: this employer is part of the old guard and not right for you.

If they can’t accept simple push-back, then do you really want to work there? Not being able to tolerate feedback or pushback is almost certainly part of a more sinister and autocratic culture, which frankly, is outdated. Total transparency requires reciprocity.

Response 1 is also very easy to get through. The employer has been transparent, and now it’s time for you to be: “I’m currently on £71K, and my aim with this job is to get to £80K+, which is within the range advertised for the role.” (Use judgement as to whether the last bit needs to be added — I personally think it’s strong enough on implication, but there’s no harm in being explicit with this issue.)

Response 2 is more complicated, and it’s important not to be defensive here. After all, it may be the first time anyone has challenged on this issue, so it could be an education issue rather than a values one. Once again in this case, explain that you have experienced situations in the past where pay was shrouded in secrecy, which made for a toxic environment, and consequently you want to find a company where pay was handled fairly.

At this stage, they’ll either answer the question and you can then firmly put them in the category of a fully transparent employer, or they will push back again. At which point, it’s time to throw caution to the wind and open up about your compensation. Otherwise, there’s too much time spent around this one point, and it causes an unnecessary headache:

“I’m on £71K, looking for £80K+ in my next move. I believe the role is advertised at £80–100K — how does that range compare with the rest of the management team? And how is comp managed generally?”

If they continue to be opaque in response to your questions, despite your openness, you have enough of a red flag to either discard the opportunity or continue to investigate if you’re really sold on every other aspect.

Nine times out of ten however, they’ll open up and go through their own discovery about how payment needs to be handled.

The rules are changing in your favour.

It is now illegal in the states of California and New York to ask, “How much are you on?” There’s mixed reception this side of the pond because it’s how we measure things. If we don’t rely on, “How much are you on?” how do we assess someone’s worth? It’s an adjustment, yes, but is it really more complicated?

The result is far more democratic. And to be honest, technology will eventually make it possible for everyone to know how much people are paid, so companies have the opportunity to be a positive part of this change now. Otherwise, they’ll be kicking and screaming their way through it. We know which culture thrives in the cold hard reality of capitalism and which ones die and fade away into irrelevance.

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