Salary negotiations: The four best tips | Hays
Negotiation of salary
the 4 best tricks
1. What affects my salary?
When changing jobs or careers, a wide variety of factors can affect your salary. For instance, when you're just getting your career off the ground, things such as your final degree, choice of subjects and past experience as an intern or student trainee can influence your starting salary.
However, when moving between jobs, your current salary combined with your past experience and the relevance of that work to your future role are a good basis for salary negotiations.
Regardless of whether you are just entering the workforce or are changing jobs, certain factors will generally impact on your annual salary. These can include your (hierarchical) position, management experience, industry differences, regional wage gaps and collective tariff groups, to name but a few. The size of the company is also important. In some cases even the time you have spent as an employee in a company can be an important factor.
Various studies have shown, for example, that the pharmaceutical and medical technology industry, banks or the capital goods industry are segments that pay attractive salaries, whereas retail, food service and crafts are ranked among the less lucrative employment sectors.
Generally, you should factor in the current economic climate as well as competition in the job market when trying to estimate your salary expectations.
2. Salary negotiations - How should I proceed?
Here, as with anything you want to be successful at, being well prepared in advance is crucial. If you find yourself in the situation where you're negotiating your starting salary for your first permanent position after training or university, you should make sure you've done your research: Ensure you have a good impression of the salary structure in your profession or industry, before starting your negotiations. Professional associations, industry reports, rate tables, or the German Federal Employment Agency are perfect sources of information. Some sites also now offer a salary calculator.
If the person conducting your interview doesn't directly address your salary, you should definitely bring the topic up yourself. Even if a job offer or invitation for a second interview isn't forthcoming, having had this discussion will give you a basis for comparison in follow-up talks or interviews.
If you've done your homework in advance, you should find it easy to lay out your salary expectations. Sometimes the job advertisement itself will include a section about your desired level of income. This way, if you are called to interview, your salary expectations will already be in line with the company's budget for the position. Make sure you always state gross amounts in your negotiations as the net salary you desire will depend on too many personal factors.
Every time you enter into any salary negotiations, always keep your desired target salary – including any and all extras – firmly in mind. You should, however, also give serious thought to what you consider to be your lowest acceptable salary as well as prepare for any possible arguments regarding this should negotiations become tougher. For those just getting started: There is normally a margin for negotiation for most positions and companies, either in terms of pay or possibly in the form of attractive extra benefits, as salary is often comprised of more than just money. If the companies you deal with are very firm about the amount of money offered for the role, you are certainly entitled to open a discussion about a possible increase in your pay after you've completed your initial probationary period. As a rule of thumb, a margin of €1,000 to €3,000 per year is reasonable even if you're just starting your career. If you use this as a guide, you'll rarely be aiming too high in your expectations.
Attractive additional benefits may include:
- Free meals / meal vouchers / discounted meals in the company canteen
- Free drinks
- Free / subsidised public transport
- Staff sports programmes / discounted memberships in sports clubs or gyms
- Home office
- Company car
- Free parking
- Subsidised childcare / company kindergartens
- Company pension scheme
3. Negotiations when changing jobs
If you're looking to change jobs, you'll find yourself in a more favourable position when it comes to salary negotiations. Depending on your current salary, you can expect a ten to fifteen per cent increase in your pay. Moreover, by working in your current capacity you have a point of comparison for working times and benefits that makes calculating your new salary expectations easier. Make sure you have put together all the appropriate arguments to support your position in advance. For instance, you can usually reference your extensive experience and any successes you've had in your current job as justification for a higher salary.
However, should you not be able to immediately realise your aspirations, keep applying elsewhere until you find a position that has the right, total package for you or renegotiate the salary for your current job. And another good tip: It's important not to pitch your salary expectations too low. This can often raise questions on the part of your interviewer and may give the impression you're not as convinced of yourself and your abilities as you should be.
For every salary negotiation, whether you're just starting your career, renegotiating the pay for your current job or when changing jobs, remember: Be confident, prepare your arguments in advance, know how low your willing to go in salary, but be willing to make concessions. Heeding these tips will lead to greater success in your salary negotiations than just turning up, unprepared and "winging it".
4. Starting salaries and salary increases
Your starting salary can vary depending on position, company, industry and region. Studies show, for example, that SME new starters can earn, on average, up to €8,000 less than those taking their first jobs in a corporate environment. The initial salary paid by employers to university graduates is, generally speaking, slightly higher than that usually paid to "Fachhochschule" graduates (i.e. graduates of German technical colleges).
The trend is similar in the medium to long term, with salaries varying depending on the candidate's degree, amount of experience abroad and any additional qualifications. Depending on the position being taken, average salaries for qualified engineers graduating from a technical college can vary by up to 20 per cent compared with those for engineers with a PhD.
In Germany, the average salary increase last year across the board was about four per cent (above scale) and 2.4 per cent for collective agreement wages. Similar positive trends were also observed in previous years. This assumes that when calculating your salary you can expect an annual increase of three to five per cent. When changing jobs or companies, this can be about seven to 15 per cent.
And of course, it should go without saying that it's important always to prove yourself both in your current and future positions so that when it comes to negotiating your salary you can convincingly argue your corner and achieve the pay you want.