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Salary Negotiation: The Key to Higher Lifetime Earnings and How to Do it

Negotiating your salary is extremely crucial to unlocking higher lifetime earnings. Despite the challenges and stress associated with it, it’s important to learn what your role is worth.

Salary negotiation is often seen as uncomfortable, so it is no surprise that 57% of employees have never tried it. Employees across the board tend to shy away as they do not want to come across as arrogant or greedy, nor disrupt the established workplace dynamics.

A US-based study found that an employee who negotiated an extra $5,000 from an annual starting salary of $50,000 to $55,000 would earn more than $600,000 over the course of their 40-year career.

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During annual salary review exercises, employers usually make a more conservative offer when giving employees a raise, offers tend to be budget-conscious and calculated based on inflation, market averages and tenure.

However, their offer may be less than what they can actually give you. If you can successfully negotiate and justify why you deserve it, you just might get that higher salary to retain and motivate you.

5 tips on how to negotiate for a higher salary

One thing to note while negotiating is to remain cordial and reasonable. The process should be a collaboration, not a conflict. Threatening to leave if you don’t get what you want or bringing up another job offer gives the perception that you are a disloyal and fair-weathered employee. It also signals that your motivations are purely financial.

If you are ready to begin the process, here are five steps you can take for a fatter paycheque.

1. Do your research

Doing extensive research is a crucial first step. Without doing so, you risk either being underpaid or looking too out of touch with reality by asking well above the market rate. Looking up what others with your skills and experience are making enables you to gauge where you stand and provides a good benchmark to set salary expectations.

To find out how much you are worth, you can use online tools, or connect with a recruiter to find out how much companies are willing to pay.

2. Know what you want

Researching will give you a sense of the salary range you are looking for. However, if your boss asks about your expectations, give a more precise figure instead of the broad range. Quoting a salary figure from the top of the range gives enough wiggle room to negotiate down, which is something you should be prepared to do.

Additionally, giving an exact number gives the impression that you have done your homework and that you are ready for a proper negotiation process.

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3. Showcase your value as an employee

Be prepared to justify your request. It is likely you will be asked why you think you deserve a raise and how you have calculated your expected pay. As such, you should go into the salary negotiation process armed with information to support your argument.

Highlight your contributions and share positive feedback from clients and peers. From a company’s perspective, your value is tied to the results you produce. Thus, when making your case, use quantitative values instead of qualitative statements. Also, bring up ideas and plans for the future that will help the company reach its goals and demonstrate your ability as a forward-looking and valuable employee.

4. Be confident

When negotiating, confidence is key. People who are confident in their abilities are typically perceived to be more competent, which will clearly help when asking for a raise. Project your confidence by articulating your words carefully and being mindful of your body language.

Avoid apologising during the negotiation process — wanting to be paid what you are worth is nothing to be sorry about. Apologising for your expectations only gives the impression that you’re neither confident nor convinced of your self-worth.

You could choose to wear darker-coloured clothing such as navy blue or dark grey, as these are often associated with strength and dependability.

5. Establish your minimum acceptable salary

The final thing that you should be prepared for is to have in mind the lowest number you’re willing to accept without wanting to quit. This number should be on the minimum salary threshold you have previously researched and that you would not mind staying on for.

Divulging this number right at the start is not the best. Let the process of negotiation bring the number down, but be bold enough to walk away if it dips below the minimum.

Salary negotiation didn’t go as well as you hoped?

You’ve given it a go, but if you didn’t manage to get a pay raise due to factors beyond your control, know that walking away is always an option.

If you believe that you are being underpaid for your contributions and the value you bring, then it could be time to look for a more rewarding opportunity that comes with better incentives.

The article is contributed by Randstad Singapore.

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