8 Tips for Better Salary & Work Negotiations

How do I negotiate outside of a salary band?

What should I do if the employer is saying they can't make a better offer because of salary and compensation bands?

You'll often hear employers push back on salary negotiation requests on the basis of banding or levelling. Something that can be very useful to understand there is that you can do a few things about it.

So you can try and push to the top of your band by making an argument for why you're a high performer or contribute well to the organisation. And usually a direct manager or a hiring manager is able to make that call for you.

You can also do things like pointing to the differences between your responsibilities and the lived experience of your job versus the title, and actually saying, 'look, this job probably belongs in another band'.

Then you can also do things that are essentially like saying, 'if you can't move on salary, what can you do on superannuation, benefits, leave, remote work, equity, performance bonuses, L&D allowances.' Often you'll find that banding structures are very rigid around things like salary, but may not address those terms where you can actually find other benefits as well.

So if you can create enough leverage for yourself, you may find that they're able to make up that difference.

How can I initiate a compensation review at work?

What should I do if I'm really happy with my job but there isn't a defined process for compensation reviews, and I want to increase my salary?

A lot of people will have a similar question where they say, I'm really happy with my job, I don't necessarily have a very set structure for proceeding through performance reviews, but I want to open up the conversation and I don't necessarily want to have to go elsewhere.

I think this is one of the strange paradoxes of the job market that essentially your skills are growing within a job, but it's very rare that your remuneration and promotion keeps pace with the amount of growth that's happening relative to what you could do if you switch job every two years.

So in some ways the employment market doesn't actually reward the type of employees that as a manager or as a founder, you love to have, which is the type of person who's super committed, wants to grow there and wants to stay.

I think the good news is that a lot of founders and managers have that attitude, which is, 'Hey, you know, if I can work with you in this process to create incentives for you to keep growing and taking on more responsibility and contributing and adding value more in line with you keeping pace with the market and even with the top of the market, if you're a high performer within that role and relative to an external benchmark, then that makes a ton of sense.'

And that's often a nice way to open the conversation, essentially to say, 'Hey, I really want to be here. Here's how I see my future at the company. I'm really excited to keep contributing in these ways. Here's how I've already contributed. Here's how I'm growing. And here's the research I've done benchmarking what that looks like in the external market', which is often doing a review of roles like yours, looking at job ads, looking at things like Glassdoor.

Build yourself a data set of, say, 10 to 15, and probably orient yourself to the 80th to 120th percentile of those salary ranges and say, 'I think this is around the right range for the types of roles I'm talking about, happy to hear your view on it, happy to think about what other terms we might want to bring into that conversation as well but I'd love to talk about what's the pathway for me to continue growing in my role, how do I need to be performing to get to this level', and frame it very much around, how can we keep creating opportunities for me to grow here and making sure that I keep pace with the market, I think is a nice way to do it. Because you're never at that point of posing a threat or you're not making a threat that you don't mean, which is also really good too. So I think people are like very receptive to that type of conversation.

How do I respond to a disappointing compensation review or salary increase?

What can I do if my employer won't negotiate or won't consider a sufficient pay increase?

How do you respond when you want to stay at your current employer, but they're not offering the type of increases that you want, and you're thinking about the 'what next' question.

This will depend on leverage and how much you want to be there. So leverage in the sense of negative leverage is essentially how much can you inflict damage on the other parties? Or who needs the deal more?

If you're in a position where you're a pretty essential hire, there's a key person risk attached to you in some way, you may actually have a fairly large amount of leverage in this situation. If that's not the case, it can be a little bit more difficult.

It's also worth thinking about how much do you really want that role and what your walkaway point is. So whenever we're teaching negotiation theory, we'll talk about setting your reservation price or walkaway point, which is essentially the minimum you'll accept. And then your aspiration price as well. And between those two things is the range that you're willing to accept.

So if they've come back to you and said something that's a bit disappointing, the first thing that you can do is actually go and test the market and try to improve your best alternative to a negotiated agreement.

In negotiation theory terms, that's BATNA. But essentially, it's go and get an alternative offer. And I think for a lot of people that can feel very unnerving and anxiety inducing which is understandable. So I think it's really worth doing that and then thinking about how you deliver. And for example, a way of doing that that is less confrontational is something along the lines of,

'Hey, I really want to be here. I was disappointed by the offer that you gave following our last conversation. And so I did want to go out and actually test the market and understand if our internal pay scales are keeping pace with the external market for roles of this kind. So I have gone away and done some benchmarking of my own. And I've also been offered a role that looks like this by another company. I would really like to stay here. And if you are able to match it or improve the offer that you're making that would make it a very easy decision to stay here. If not, it's requiring a set of financial sacrifices in order to stay somewhere that I want to work, which puts me in a difficult position.'

So you can do things like that where you're saying repeatedly and clearly that your intention is not to desert an employer, but that your intention is much more to look after your own financial future and make sure that you are being paid what the market would value you at.

What is the best piece of negotiation advice you've received?

What negotiation advice has had the biggest impact on your negotiations? 

The best piece of advice that I got is probably that you don't have to say yes in the room and just being exceptionally conscious of the kind of internal implied pressure that you might be feeling to end the discomfort of the negotiation by saying yes or end the feeling of discomfort by closing the negotiation as quickly as possible.

Learning you don't have to say yes in the room and then thinking about how can I give myself time and space to react in the way that's more intentional to the negotiation as opposed to sort of reacting when you're emotional or reacting when you don't have full information or reacting when you feel under pressure.

So you go from a high level idea of 'hey, I don't want to be saying yes in the room' to going extremely tactical and thinking about what are three phrases that I feel really comfortable saying that can buy me time outside of the negotiation to think about how I want to respond.

So, a couple of my favourites are, for example 'hey, I'm just going to treat this as a learning and information session. So I'd love to ask a lot of questions, understand where you're coming from, but I'll go away and think about it and then get back to you' and you can insert a timeline.

But just being really clear and respectful. I think also things like 'Hey, I know you wouldn't expect me to make a decision in the room, particularly when I'm receiving new information here, so I will treat this as a great opportunity to understand what's on the table, and then I'll come back to you with my thoughts in a few days.'

So again, it's just just having those phrases that are respectful, that you've practiced delivering so that you know when your nervous system is spiking in the moment that you'll still be able to do them. And that those give you enough time to react calmly to it as well. That can be really, really helpful.

Different people will have different areas where you might feel it's like a blind spot or a sensitivity or a weakness or something that you're working on. So that's something that really works for me because I think probably the underlying thing that I often have to work on is not wanting to be a peacemaker in a negotiation as opposed to wanting to be an effective advocate for my side.

And so I'm often having to pause myself and, and prevent myself from doing that. And then thinking about how can I negotiate more strongly for the interests of my side.

How do I negotiate when there's strong emotional attachment?

What should I do when I find myself negotiating with someone who has strong beliefs or emotional attachments to items were discussing?

So how do you negotiate with someone when you're talking about something that's is entrenched in core beliefs for them and without knowing exactly what the circumstance here might be, I think lots of people come to negotiations feeling quite emotional.

And that can be both because most people have an aversion to conflict and negotiation feels like something that's a sort of slow moving form of conflict that can be akin to public speaking in people's fear of the process and then layer on top of that perhaps they feel quite like emotionally or values attached to whatever the issue in question is.

I think a great way to start is actually to acknowledge that. Sort of name the elephant in the room in a way that is kind and compassionate and curious rather than sort of adversarial. So saying 'hey, I know that this is something that's really important to you'. So using things like mirroring which is when you mirror their language back to them, paraphrasing, so sort of rephrasing the way that they might say something, or labelling and those are techniques that can be really good for rapport building in a negotiation.

So just saying like, 'look, I know X or Y is very important to you. And I want to be respectful of that. I also have this perspective over here, and these things are important to me. I'd love to give you a chance to talk a little bit about how you're feeling about that. Perhaps share a bit more information, and I can also do the same, and then we can proceed from there.'

So I think starting in a spirit of sharing information and in a spirit of sort of separating the person from the issue while respecting their feelings, I think can be a great way to begin in those conversations. You may find that you're then running into a bit of a wall with someone and it is a core belief for them.

Or it's an issue that is really hard. If that's true of both of you, like this is a core belief for both of you, there may end up being a situation where you essentially say, look this negotiation, the outcomes that matter aren't just about the substantive outcomes of like what gets written in an agreement or contract at the end.

We also have relationship outcomes that we're optimising for here too. And so, we'll decide that we're just going to leave this term. Or you may say, you know what, I can see this is really important to you. If it's less important to you personally, it can be an opportunity for doing a tactic called log rolling, which is essentially where you trade across issues.

So if there's something where, you know, one party feels incredibly strongly about something, it may actually give you leverage to say, 'okay, look, it is a bit of a big sacrifice for me to do X. So I'd love if you can move in a more dramatic way on this term over here'. So, for example, they might feel really strongly about coming into the office, and you might prefer hybrid work, but being able to say, 'Okay, well, if I can't have the kind of remote work arrangement I want, I'd love an extra $20,000 of salary to compensate for that.' and you can think about whatever rationale you want, but it can also be an opportunity if people are sort of - irrational is too strong a word - but strongly attached to a particular thing.

How do I negotiate when leaving my job?

How can I ensure I leave my job without burning any bridges but ensuring I leave at the right time, and with the correct separation package and benefits?

So how do you negotiate leaving effectively? It depends a little bit on the circumstances of the leaving. I've coached people who are going through what's essentially a forced redundancy or even what should be a redundancy that's being turned into a performance issue.

So if there's animosity, and you're dealing with bad faith from the other side, then it might be worthwhile thinking carefully about what information you share, thinking carefully about whether you, for example, go and do your research on your legal rights, go and do your research on comparable packages that you've seen in the market and come very well prepared and pretty well scripted to those types of conversations, or even perhaps move them from a forum where you might feel that power imbalance, like an in person or phone conversation, into something that can happen on email and in writing, because I think people are also a little bit more careful to make sure that they're doing the processes the right way if they're in those circumstances.

If it's happier news, which we all hope it is, and it's much more of a situation of just moving on to another role that you're excited by, I think the first thing that you can do is framing and priming as early as possible.

So letting your managers or direct reports or people that you work with know so that they can coordinate bringing someone else in so that they can prepare handover documents, so that they can off-board you effectively.

It can be really good once you've done that work of essentially saying, 'Hey, look like this is coming.' Think about what leaving comms you might want to do. So is there an email? Is it a Slack message? Is there a party or a lunch or whatever? But thinking about what note you want to go out on and what message you want to go out on and crafting that in a more deliberate way as well. And then in terms of the package itself, you'll have usually legal rights to a certain amount of leave being paid out or you might have a certain amount of equity vested.

If it's a situation where you have no reason to believe the other party is behaving in bad faith, it can be very useful to actually just send a message in writing that essentially says, 'Hey, having done all of this work to coordinate the logistics of me leaving with the team, I just want to confirm the details of my leaving package based on my understanding of my contract and the relevant legal structures. I think this is it. Can you just confirm that to HR or your direct manager?'

And then you basically get it in writing and then confirm the date and proceed from there. So something like that can be an easy way to do it. It's a tiny bit of norm based leverage. There's different kinds of leverage. People often don't think about there being multiple types. But norm based leverage is essentially where you're invoking a moral norm or a standard of behaviour. And it can be very useful to just be like, 'here's the standard of behaviour I expect from you'. And then it's very easy for them to say 'yes', then opt into it.

How can I negotiate a salary increase with the current market downturn?

How should I approach negotiating a salary increase where there have recently been redundancies at my company and we're in a downturn?

It is super tough. There are a few things that you can try. This is also one of those circumstances where negotiation can move the needle sometimes a long way, sometimes a small way, but it's also worth knowing there are real material constraints to a lot of these conversations too.

So if you're in a startup and there have been a series of redundancies and you're still looking to improve your pay, I think you do all the basic things right first, which is preparing evidence of high performance, showing how you're contributing, showing how you want to continue contributing and feeding that in, in the months coming up to a performance review.

Doing the work on externally benchmarking for your role and also looking at the internal pay structures as well. And if there are inconsistencies in those, that can actually be something useful, where you can point to issues where someone doing a similar job is being paid more. That can be a very useful piece of negotiating leverage for you.

So do all of the usual things right, but I think something that can be particularly helpful in startups is that because they're often operating on a cycle of fundraising, which can feel very much like boom and bust.

So you raise a big round as a founder, you then have a ticking clock of 18 to 24 months to hire people quickly and show results before you either need to be breaking even or going back to seek more funding again. And so, at the beginning of the cycle, Founders and Management are going to be really incentivised around how do we get great talent, get them in the right seats and get them delivering super effectively now.

Towards the end of that cycle, they're often conserving cash and trying to show performance as they are closing out negotiations and funding rounds. And so being sensitive to what part of the cycle your company might be in is also super important. So if you're like, 'oh, we're towards the end of the cycle, everyone is conserving cash', a big ask for a salary increase, even if it's merited by the external market, may not be received very well, so think about what is cheap and available at that point in time which is often equity or other conditions as well.

So thinking about, for example, can we negotiate a back pay contingent on the fundraise itself. Or can we negotiate a promotion that takes effect after the fundraise closes or after, you know, it may not be a fundraise, it may be a big partnership or deal or something around that but you can think about those as kind of ways to do it to essentially extend the time scale and create criteria that are aligned with the business performing better.

And that can be a moment to do it as well. But I won't lie, it's a difficult one, and I've seen a lot of people in the Australian start up sector going through this particularly over the last 12 months since the downturn, so you're not alone in it. And it is one of those things where if you've tried everything within the bounds of that workplace, you might want to think about are there other options, are there other places where I'm going to grow more as well.

What's the best tip for having a successful negotiation?

I've never had to negotiate before. What is the key to a successful negotiation? 

What's the number one tip for successful negotiation? The reason I like this question is it speaks to the difference between the perception of good negotiators, which is people often think the good negotiators are competitive and aggressive and like bang their fist on the table or refuse to budge.

And actually the data suggests that that style of negotiation, which is known as competitive negotiation, doesn't deliver good results over time. And that generally the collaborative style where you're able to separate people, interests, and positions, where you're able to share information with each other, build trust, and then be assertive enough in thinking about how do you divide value actually works much more effectively.

So for a lot of people, they'll come into negotiation coaching and say, 'Oh, I feel really anxious. I don't like conflict. I'm probably more of a people pleaser. I find it hard because I empathize with the other side or, you know, negotiation feels inauthentic or manipulative', and I actually think that the personality trait that sits underneath that, which is being high on empathy can actually be a superpower in negotiation if you can think about how to work on your weaknesses because that allows you to kind of genuinely connect with the other side, to genuinely understand what's important to them, to frame the way that you're speaking in terms that are going to resonate as effectively as possible with them. So I think the most important thing about being an effective negotiator is usually, a capacity to kind of sit with the discomfort of the negotiation and then to find ways to be empathetic and build rapport and connect with the other side as well.