How to Win at Salary Negotiations
HEC Paris MBA students are equipped with salary negotiation strategies through a workshop led by former Apple HR Director Professor Philippe Gaud. The key takeaways include practicing confidence, researching company policies, understanding personal worth and more.
Negotiating a salary increase is one of the most nerve-wracking conversations imaginable. It can simply seem easier to accept a future employer’s initial offer, even with a strong CV. According to a recent study by Payscale, 63 percent of male MBA graduates requested raises before starting their first post-degree job, while only 48 percent of their female counterparts did. Of those MBAs who ventured into the negotiation ring, 59 percent were successful at getting their salary demands met.
Getting a pay rise is often much harder after you’ve started the job, so it’s important to try to reach your highest earning potential before signing on the dotted line. Thankfully, HEC Paris Affiliate Professor Philippe Gaud, a former Human Resources Director at Apple, Inc. and an expert in Human Resources, recently gave a workshop for the HEC Talents career center on how to win at salary negotiations.
His insights for our soon-to-be-negotiating HEC Paris MBA students:
1. Practice, so that you exude confidence and the right attitude during the conversation.
Write down what you want to say, and practice saying it, whether it’s to your reflection or to a close friend. “There should be only two reasons why a company would decline giving you a raise: either they think your salary expectation is too high, or they think you are being unreasonable and, therefore, would be a problem for the organization. If you remain realistic, professional and confident, you increase your chances of success,” Professor Gaud says.
But can projecting confidence come across as being arrogant? According to Professor Gaud, a lack of assertiveness can actually be detrimental to the negotiation process. “Talking about money is not dirty,” he says. “If you would negotiate other aspects of your job or workload, why not talk about money? Do not allow yourself to be undervalued.”
Still, Professor Gaud suggests treading lightly when deciding whether to tell your potential future employer about other job offers you may have. Never use other offers as a bargaining chip – this may come across as a threat. Instead, work out a careful and pleasant way to tell them, but only if you think this could add some necessary pressure or show that you are in demand.
2. Consider the key stakeholders: the company, the recruiter and the job.
The company: Do your homework by researching salaries on sites like Glassdoor or by meeting with alumni who are currently employed there. If the salary offered seems low, try finding out the likelihood of getting it boosted, and how much you might receive. Base this off the company size, HR policies and company culture/values (e.g. startup or well-established). If they encourage risk-taking, for example, then you shouldn’t hesitate to ask for more, Professor Gaud says.
Also consider the potential challenges the company may face. If their budget for your project is small, then maybe they can’t afford to increase your salary up front. Consider things like: Will you have an opportunity for future pay raises or promotions? Does the company give performance-based bonuses or salary increases? The answer to these questions should affect your desire to negotiate.
The recruiter: You could be negotiating with anyone from your future line manager to the company’s CEO. Try to find out who it will be beforehand and prepare accordingly. It is important to ensure that the recruiter understands exactly what you bring to the job, so that they can offer you a salary based on your unique skillset.
The job: Is this a new or an existing job? If it’s the former, there could be more flexibility on salary. Ask yourself why the job is vacant – are you replacing someone directly or has the required profile changed? If it’s just a replacement, there is likely to be less flexibility on salary. However, if they are looking for someone with a different profile or a new skillset you bring to the job, there will likely be more room for negotiation.
3. Know your worth, and be willing to walk away if necessary.
Walking away from an offer can be agonizing, but you should know when it is necessary, Professor Gaud says. Work out your perceived salary value (the minimum salary you think you are worth), and your ideal salary. Go for your ideal salary, and definitely don’t accept an offer that is less than what you perceive you’re worth – if they will not budge, then perhaps there is no point in negotiating.
As an HEC Paris MBA graduate, you should demonstrate everything that you offer the company, which is a lot. You are re-entering the job market fully operational, with the extra value and qualifications brought by your MBA. You have a deep, 360-degree view of business, a multicultural approach to problem solving, and years of work experience that you will be able to apply straight away. Put across the idea that giving you a higher salary upfront will put more pressure on you to deliver, and show the company they can put their trust in you.