Negotiating your first salary
YOU'VE graduated with flying colours from a reputed college, and have interview calls from a couple of companies following the acceptance of your job application. Don't sit back and relax, yet.
There's still much work to be done to land into a job of choice - with a salary you would be comfortable with. Negotiating your salary in your first job may not appear simple. And there's reason to think so.
One, it is the first formal interview where you will have to sell your skill sets.
Two, you don't have work experience or a track record, which reflects your abilities, and could help you negotiate for a better salary.
Three, your underlying concern that you might undersell your skills.
Well, getting a headstart needs some effort on your part. 'It is important to understand yourself and the industry in which you seek a job, fairly well,' says A Sudhakar, Managing Director, Stepstone India (P) Ltd, a career and recritement portal. Even the brightest student with the best track record could get a raw deal if he goes totally unprepared the first time round. You perhaps get the hang of it much later as you change jobs.
Negotiation of compensation package requires introspection on the part of the candidate. It also needs maturity in thought, besides communication skills during the interview. In a sense, there are some human resource consultants who believe that passion for one's job will in the final run pay rich dividends. 'Find out what you love doing and get someone to pay you for it,' advises Achyut Menon, Founder of Options Executive Search Pvt Ltd, a Hyderabad-based recruitment firm.
Tips for the first-time candidate to work your way through an interview and ensure a fair salary:
Do your homework well
Getting your first job is like taking any major decision in life - be it buying a home, a car or a consumer durable. Do your spadework well. Besides, you have hordes of information at the click of a button. Log onto the Internet and get details of the industry you want to work in. Also, visit company websites for relevant information, such as the directors' profiles, products/services, as well as the competititors' profile.
Until the D-day, keep updating your knowledge of news and developments - some general and also specific to your career space. Your level of awareness of current affairs on the industry can impress the interviewer. Newspapers and other forms of media and websites such as Monster.com, not only advertise job openings but also have articles on the employment market, salary levels and current perquisites offered to employees and so on.
Compensation packages are a function of the status of the company in the industry, the geographic location, the type of industry and the economic cycle prevailing at that time. Knowledge of all these factors will help you negotiate for a market-linked salary and will give you the confidence to make some demands for yourself.
How to go about it The first step to negotiating your salary involves knowledge of the latest structures and trends. Here are some common elements used across industries.
Basic salary: This is the fundamental component of one's salary, and fully taxed normally.
Allowances: Could vary from company to industry. But broadly includes heads like children's education, fuel or conveyance, house rent, bonus, entertainment, gift vouchers and medical.
Perquisites: Normally offered only at higher positions in the job hierarchy. This could include a company-lease car and house. Large corporations pay for family holidays once a year.
Variable pay: Refers to that part of the salary component, which is not a fixed inflow every month. It would vary with the performance of the employee, as agreed upon earlier. There could also be incentives given by way of employee stock options.
Consider what kind of salary structure appeals to you. Sometimes, there could be excellent benefits in terms of children's education, free family medical welfare or paid annual vacation.
It's a good idea to stay in touch with your school and college alumni, through the Internet. In fact, senior students especially those from the immediate previous batch, often give a correct picture of the job market, the best paid jobs, work culture and the present salary structures. You could then have a benchmark to negotiate for a good salary.
However, a word of caution here. Even if you know a senior, do not his name at the interview, in the hope that it will fetch you a better pay packet, unless asked. If you need to give his reference, you may do so in the written resumé, which is usually sent before the personal interview takes place.
There's no harm in stating the industry benchmark on compensation packages, if you are asked by the interviewer. But remember that an unreasonably high salary demand may put off the interviewer. It is better to discuss salary ranges instead of haggling over a ballpark figure. Some employers may just want to test the candidates' ability to convince and negotiate, which is a reflection of the ability to influence others.
It's appropriate to allow the employer to initiate the discussion on salary. Also, do not be argumentative or dismissive of an offer at the interview. In fact, there is no harm in being polite and requesting for time to revert. However, according to Sudhakar, 'Do not stretch your luck too far during times when the job market is not too buoyant. Most freshers refuse jobs in the hope that there is always a better one waiting ahead. They forget that in the next six months or so, there is another batch of students hitting the job market.'
Even as you are being interviewed for the first time, bear in mind that it may not be so for the interviewer. He may have met scores of candidates earlier and can see through falsehood or inconsistency. Always remember what you have communicated about your achievements and salary, either in your resumé or, to the human resources consultant or, in your earlier round of interview with another company official.
Above all, be fair in your salary expectation, else you may be doing grave injustice to yourself. 'Candidates must know that salaries to some extent take into account the status of the educational institution and your personality,' adds Sudhakar, who explains how students returning after completing their postgraduate degree overseas expect sky-high salaries in India. Bargaining beyond set salary structures may put off a prospective employer, as from his perspective, 'The company needs to invest time and effort to train a fresher in the job,' adds Menon.
Know the jargon
In any salary negotiation, there are always trade-offs to be made between the employer and employee. Employers may question you on the structure of salary desired or, give you a choice. Hence, introspection about your needs and goals before attending the interview will help you answer these questions.
For instance, are you looking for employee stock options? Do you prefer a higher variable component in the salary which is performance-driven? What kind of perquisites or incentives do you seek from your employer? Is a secure job your priority or are you willing to handle start-ups? Joining a start-up is risky but offers tremendous growth potential if you are willing to risk the initial years and rough it out, as the company grows.
Know when to give in
It's important to get the right start in your career graph. But, it is also important to be able to read the body language of the interviewers or read between lines and be able to leave the conversation politely, if it is getting nowhere. If the expectations of both parties do not match, it is better to look elsewhere for a job.
In the final run, there have to be some compromises a fresher might have to make as it needs to be a win-win situation for both you and your employer. Understand that even as your prospective employer wants you to feel good about joining his company, he wants you at the least cost to company. Does that meet your expectations? Well, your first job could be one of your best learning experience in earning.