Mr Dayal R Kundani
Going for interview? Few tips on how to negotiate your salary
Job interviews can be gruelling. But the worst part is whether to say yes or no to the salary being offered. The most common reaction to an offer is — “I shall get back to you.” During bad times, it has to be a ‘yes’. In better times, well, one can play on the company’s desperation and one’s own comfort with the existing company. Of course, a lot depends on one’s financial condition and the job market. However, a little bit of tweaking can be done by just reworking the components to ensure a better deal.
A typical salary can comprise of following components:
Fixed: Basic, house rent allowance, conveyance, leave travel allowance;
Variables: Incentives or bonus;
Benefits: Superannuation, pension, medical, club membership, employee stock options, restricted stock units.
Of the above mentioned components, the last two can be negotiated. The other fixed components, other than the basic, are flexible.
Here’s how you can use this to your benefit:
Rebalance your salary: The salary structure in most sectors, such as the manufacturing sector, is 70-80 per cent fixed and the rest, variable and/or benefits.
According to Varda Pendse, director, Cerebrus Consultants, “Mostly employers are rigid about the variable pay. But they might agree to an alternative structure for first one-two years at least.”
For instance, if your salary structure is 70 per cent fixed, 30 per cent variable. You can increase the fixed component to 80 per cent and keep the variable at 20 per cent (if you are uncomfortable with the variable part being too high). In this case, the cost-to-company (CTC) will continue to remain the same.
Negotiate the fixed portion: You cannot make changes to your basic pay. But, a hike in the same is always welcome as it increases your employer’s contributions towards the employee provident fund and gratuity pay.
However according to E Balaji, executive director — Staffing Solutions, Ma Foi, “If your
Job interviews can be gruelling. But the worst part is whether to say yes or no to the salary being offered. The most common reaction to an offer is — “I shall get back to you.” During bad times, it has to be a ‘yes’. In better times, well, one can play on the company’s desperation and one’s own comfort with the existing company. Of course, a lot depends on one’s financial condition and the job market. However, a little bit of tweaking can be done by just reworking the components to ensure a better deal.
A typical salary can comprise of following components:
Fixed: Basic, house rent allowance, conveyance, leave travel allowance;
Variables: Incentives or bonus;
Benefits: Superannuation, pension, medical, club membership, employee stock options, restricted stock units.
Of the above mentioned components, the last two can be negotiated. The other fixed components, other than the basic, are flexible.
Here’s how you can use this to your benefit:
Rebalance your salary: The salary structure in most sectors, such as the manufacturing sector, is 70-80 per cent fixed and the rest, variable and/or benefits.
According to Varda Pendse, director, Cerebrus Consultants, “Mostly employers are rigid about the variable pay. But they might agree to an alternative structure for first one-two years at least.”
For instance, if your salary structure is 70 per cent fixed, 30 per cent variable. You can increase the fixed component to 80 per cent and keep the variable at 20 per cent (if you are uncomfortable with the variable part being too high). In this case, the cost-to-company (CTC) will continue to remain the same.
Negotiate the fixed portion: You cannot make changes to your basic pay. But, a hike in the same is always welcome as it increases your employer’s contributions towards the employee provident fund and gratuity pay.
However according to E Balaji, executive director — Staffing Solutions, Ma Foi, “If your