As demand for employees picks up in an improving jobs market, many organisations are struggling to attract candidates with the desired skills and experience. This puts talented professionals in a stronger bargaining position, not only with potential hirers, but also with existing employers.
Many organisations are trying to take on new staff to drive growth in an improving market, and the last thing they want to see is their best people leave. Staff attrition hurts organisations - it impacts on productivity and costs money. If businesses are unable to retain the skilled employees they already have, they face double the difficulty in securing people with the skills and experience to take their organisation forwards.
As such, professionals may be able to negotiate an improved salary and/or benefits package from their existing employer, in a bid to stop them from moving on. A recent study from Robert Half found that 49 per cent of HR directors have seen a rise in voluntary resignations in the past three years, so undoubtedly organisations are aware of the risk of higher staff attrition. And where possible, they will try to keep their best people onboard.
Are you in a position to negotiate?
If you are eager to gain a pay rise, or an improved benefits package from your employer, the first question to ask is 'do I deserve it?'. Try to be objective in assessing your performance while with your current employer - have you managed to add significant value to your teams and the organisation as a whole? And can you prove it? Have you had great feedback from your managers and bosses?
If the answer to these questions is yes, then there could well be scope to negotiate a pay rise with your current employer. Workers who contribute directly to organisational growth and the bottom line - perhaps by working on key projects/contracts, achieving high sales figures or creating new products/services - are simply worth too much to an organisation to be allowed to leave without a fight.
Employers inevitably know who their best performers - their most valued staff members - are, and will be eager to keep hold of them for as long as possible. This does not mean they necessarily come to you with the offer of more money. However, if you are a highly valued professionals, and you ask for a pay rise, there may be a willingness to negotiate.
Conversely, if you have been struggling in your job and failing to perform to the level expected, you may find your employer less likely to enter into negotiations on pay. They will only offer what they feel an individual is worth to the organisation - so low achievers do not have the same bargaining power. In some instances, employers may even be happy for staff members to leave, so they can replace them with a better performer on the same money.
Does the market play into your hands?
If you are looking to negotiate on pay, another important step to take is to assess your existing wage against the rest of the market. Consulting the Robert Half Salary Guide can help you with this process - these resources detail the average salaries earned in specific roles, in particular regions, allowing you to benchmark your own package. The salary guides also forecast average salaries for next year, and predict the rate of salary inflation for somebody working in your role. In general terms, the greater the level of demand for somebody with your skills, the higher salary you can command.
The question is, how well is your current employer paying you? If you are earning at the lower end of what somebody in your role, in your region typically commands, then there may be justification for trying to negotiate. However, if the Salary Guide shows you are already earning as much - or more - as somebody in your role can expect, then it suggests you are being well looked-after by your employer as it is. Asking for more money from an already-generous organisation could potentially harm relations with management, and -unless you really are a world-beater - prove to be a fruitless exercise.
If you are already being well paid for the role you are in, but still eager to earn more, it may be time to target promotion to a role which carries greater responsibility.
What am I willing to accept?
Other questions to ask ahead of negotiations are what level of pay are you expecting, and what are you willing to accept? Salary Guide information can provide context for your negotiations, as it reveals how much the best performers in your current role currently command. If you feel you fit into this bracket, it is perfectly reasonable to target a salary - or the equivalent in flexible benefits - at the top end of the range. It is always advisable to ask for slightly more than you are after when negotiating on salary, as usually your employer will make a lower offer. If you are a top performer they will be eager to retain you, yet they will want to do so at as little extra cost to the organisation as possible. However, always bear in mind that employers have access to salary guides as well. Asking for more than anyone in your role could ever hope to achieve is unlikely to create the right impression with your employer.
Why should I be offered a better deal?
Unless you, as a professional, can make an effective case for being offered a higher salary, then you can expect little or nothing to come from salary negotiations. Employers may know and appreciate where your talents lie, but you still need to tell them why they should offer you more money or improved benefits. As the saying goes, 'if you don't ask, you won't get'. So when entering into negotiations on pay, make sure you are armed with a raft of case studies and examples of your achievements. Being able to demonstrate your worth to the organisation in these terms gives you the best possible chance of being offered an improved contract. If you are making a real difference to the success of your company, and are fully aware of this contribution, your employer may have no option but to reflect this in your remuneration package. The alternative is that you provide the same information at an interview for a new job, and your employer risks losing you to a rival.