You get what you settle for - how to negotiate a  raise or new employment conditions? 

It has been unequivocally stated that individuals who change jobs more frequently, on balance, earn an average of 50% more over their careers than those who do not change employers*.

This is not about the lack of promotions – simply put, even when promoting an employee, an employer assumes that they have already made an investment to prepare them for this promotion, gave them a chance, educated them… hence, a raise is given but… not always a market one. In other words, the market (i.e., companies hiring a specialist, manager, director) pays fundamentally more than we would receive from our employer if we obtained the position through internal promotion. Of course, before we are "fully operational" at the new position, some time will pass, which the employer will invest in us, believing that we will adapt to the new position faster than a candidate from so-called open recruitment (it will be easier for us than for someone from outside because we already know the company). Either way, time is money and the employer agrees to invest this time to minimize the risk of so-called candidate's mismatch for the position.

Win-win?

From one side (the employee's side), the situation can look very positive: "the company believes in me, I received a promotion – it is a reward in itself, I am glad they trusted me – I move forward." From the company's side as well – it minimizes the mentioned risk, reduces the cost of recruiting and implementing a new employee (such cost is estimated at about 6-12 months of the newly hired's salary). The raise X for the promoted employee will, in any case, constitute only a part of the cost that the company would have to incur by hiring someone new.

Everything looks as rational as possible, only that often the raise X is not entirely what we would have expected...

Is changing employers the only way to get a financial promotion?

Headhunters/recruiters are well aware of the situation where a potential candidate wins the recruitment process, receives a job offer, and then does not sign the contract with the new employer because the current employer offered them a higher salary. The candidate receives a higher salary, but it happens that the employer loses trust in them (in cases where the candidate previously did not try to negotiate a salary increase).

From my observations, few employees apply for a raise, wrongly assuming that the employer should take the initiative in this matter. On the contrary, the employer assumes that if the employee does not come to talk about salary increase, it simply is not important to them. Sometimes employers inform that there will be no raises, effectively silencing most employees. What does it really mean? It is worth getting detailed information and then analyze whether it is a clear signal for us that by staying in the company, we agree to the current salary without the possibility of negotiation. If you do not initiate the topic yourself, there is a likelihood that no one will raise this aspect for you. Talking openly with the employer always gives you a chance to improve your financial situation.

When to negotiate?

There are more opportunities to negotiate salary conditions than just when changing employers. We can renegotiate our employment package on other occasions, e.g.:

• completion of the probation period
• annual goal summary
• promotion to a higher position
• change of duties and scope of work/level promotion
• participation in an additional project/projects
• managing an additional project
• change of employment contract

When not to negotiate?

• when we are not prepared
• when the chances of agreement are slim
• when we are too emotionally excited
• when there are other, better opportunities to meet needs
• when we have a stronger BATNA (Best Alternative To a Negotiated Agreement)

What to negotiate? Money is not everything – consider what you need?

It's important to know exactly what we want to negotiate. Let's consider:

• what salary level do you want to achieve?
• do you want to obtain something beyond a raise?

Here are a few examples of additional benefits we can negotiate: bonus, flexible working hours, financing of an educational plan, relocation package, company car, fuel allowance, parking space or parking fee reimbursement, stock options, additional insurance, extra medical package, change of job title, department change, additional paid leave, shorter working hours (e.g., 35h per week, part-time work), work from a different location (e.g., another location of our company, work from a co-working office located near our place of residence, "home office"), lunch financing (lunch vouchers), different tasks, change in goals, (co-)financing of extracurricular activities, (co-)financing/childcare, school, financing of membership in professional organizations/associations, outplacement program, severance pay.

Preparing our negotiation scenario and in it the issues we want to negotiate gives the other side an opportunity for agreement.

How to negotiate?

Preparation for negotiation is absolutely crucial. First and foremost, we need to put ourselves in the employer's situation. Our private arguments that we have higher expenses due to, e.g., family expansion, moving, etc., do not resonate with them at all. Substantive arguments are important, such as:

• what were your goals? what successes have you achieved over the last 6-12 months of your work?
• what additional value have you brought to the company (which of your activities translated into specific profits in the organization or cost reduction – to what extent)?
• what are the opinions about the quality of your work among coworkers, internal/external clients, supervisors?
• what is the salary level for an identical position and identical scope of duties offered by the market?
• what is your BATNA – what options do you have if your negotiations fail?
• what is the employer's BATNA? Prepare an analysis of your own goals and the goals of the (potential) employer.

Also consider:

• what would you ultimately like to achieve? – "What agreement would I like to reach and what conditions would fully satisfy me while at the same time securing the interests of the other party enough that there would be a chance they would agree to it?"
• what would you be satisfied with? – "What agreement, perhaps far from ideal, would enable the realization of my basic interests enough that I would be satisfied?"
• what could you reconcile with? - "What agreement would satisfy my interests just slightly better than the BATNA? What agreement could I ultimately accept?".

"The other side won't give you what you don't ask for."

Those who start with realistically high aspirations achieve more favorable agreements. Realistically means within the bounds of honesty and the best alternative of the other side. – Ury William

During negotiations

If we are not seasoned negotiators (e.g., it is not part of our daily duties at work), we may feel stressed, nervous, and generally uncomfortable, which may contribute to the desire to end the process as quickly as possible. Rush and emotions are not good advisors, so it's worth remembering our rights:

• you have the right to make mistakes
• you have the right to hesitate
• you have the right to ask about what the partner cannot talk about
• you have the right to remain silent
• you have the right not to know
• you have the right to take time to think

Effective communication during the negotiation process:

Communication during the negotiation process is key to avoiding misunderstandings. I suggest using effective listening techniques:

• Mirroring - we inform the interlocutor how we understood their feelings or intentions ("It seems that it frustrates you when employees expect a raise without providing convincing arguments in their favor")
• Paraphrasing - we rephrase the heard message in other words, making sure it was understood correctly ("If I understood correctly, you are not able to guarantee me the raise I expect, but we can talk about non-salary benefits").
• Clarification - we prompt the interlocutor to focus on the main idea of the message or ask for a more precise explanation of the matter. ("Does this mean that you do not foresee any raises this half-year?")
• Confirming - we add certain words, confirming that we are interested in the statement and listening carefully ("Yes, of course, I understand now – that you need to consult with the HR department about the possibility of the company financing/co-financing my postgraduate studies"). Give it a try.

"Preparation is easier if you discuss it with someone. Others bring a new perspective, force you to consider difficult issues you might overlook, and provide moral support." – Ury William

Do you intend to (re)negotiate your employment conditions? Contact me – I support clients in preparing for negotiations.

Sources: https://www.forbes.com/sites/cameronkeng/2014/06/22/employees-that-stay-in-companies-longer-than-2-years-get-paid-50-less/2/#7c952aa06260

"Getting Past No. Negotiating from confrontation to cooperation" – Ury William

Communication and negotiation strategies by Magdalena Trus-Urbańska – lecture postgraduate studies ALK "Personnel Controlling"