Salary Negotiations with HR: How Do You Do It?


Salary negotiations with HR are an important part of every employee joining a new organization. Salary consists of many components such as Net salary, Gross salary, Variable salary, Allowances, etc. This article mentions all the tricks that can be applied at the time of negotiating a salary with HR.

Salary Negotiation with HR

Salary negotiations with HR are an important part of every employee joining a new organization, and it is important to make sure that the negotiations are done for salary with HR through mail or discussion as the salary would only be revised at the time of appraisal in most circumstances.

Salary negotiation has certain tricks such as understanding the value proposition you bring to the table at the organization, justifying your demands regarding the salary, and picking a range within which the negotiation of salary can be done with the HR of the organization.

Salary negotiation is a skill that should be employed at the time of discussions as it would be difficult to revise the salary during the year. Salary consists of many components such as Net salary, Gross salary, Variable salary, Allowances, etc. which is the cost to the company for any organization. 

This article mentions all the tricks that can be applied at the time of negotiating a salary with HR and the precautions to be taken while making salary negotiations. Salary negotiation with HR in India can be done in the following ways: 

How to Negotiate Salary with HR?

Understand your value proposition

The major thing in salary negotiation is to understand your value proposition. The value proposition is the benefits or economic value that you would deliver to the organization. The higher the value proposition, the higher would be the demand for the applicant who can negotiate strongly with HR.

The value proposition should match the job description as well as the job specification. The value proposition includes the knowledge, skill, and ability an applicant brings to the organization. The higher the value proposition, the easier it would be to negotiate with HR.

The demand for the role and technology also plays an important role in the negotiation process.

There are certain technologies that are in high demand due to the shortage of labor force and these kinds of jobs have higher chances of negotiation as it is the requirement of the employer and not the employee.

Regular or outdated jobs such as Sales, Marketing, and Desk jobs do not hold much power from an employee’s perspective and therefore applicants would find it difficult to negotiate for higher pay while applying for these jobs. 

Justify your offer:

The other thing to prove for HR is to justify your asking. HR should be convinced that you are the correct candidate for the role and you can be paid what you are asked. It is important to justify what you are asking as without proper justification HR would not be interested in negotiation.

You need to back up your arguments with proper data for you to have an upper hand in the salary negotiation process. You should be able to link your offer with that of the market standards and convince HR to pay you the same. 

Pick a range:

There should be an upper and lower range limit for your salary expectations. In this way, you need not confuse and agree to a lower salary. It is important to enter into negotiation after having a range in mind, as the HRs would be given a range while recruiting employees.

Remember to start from the high end of the range and then move to the median and later to the lower range. This way you would give an opinion to the HR that you have reduced your expectation and so will the HR.

The range should be matching with that of the market and the budget of the organization. It is better to know the existing salaries in the market for your kind of job and then decides the range accordingly. 

Use psychology:

The usage of psychology helps at the time of salary negotiation with HR. The best psychology trick is to use a higher number at first and then come to a lower number. This way the higher number would be fixed in the mind of the HR and anything less than that number would mean that HR is saving something for the organization.

If HR agrees to the higher number then you win, or if HR tries to negotiate then do not go below your lower limit of expected salary in which way you make a win. So it is a win-win situation if you try to play with the psychology of HR by quoting a higher salary at the beginning of the conversation.

The number can be a 30% hike on the existing in-hand salary or something of this sort and have a lower limit of 25% below which you would not negotiate with HR. 

Don’t be desperate:

The other important thing to know at the time of salary negotiation is not to be too desperate for the job. If the HR knows that you are too desperate for the job, he would force you to agree to his number and you would eventually lose your negotiation ability.

The desperation could be calling HR multiple times regarding the offer letter, showing urgency to join the organization, letting HR know that you are on notice period, etc. It is important to be cool and composed while negotiating with HR regarding salary and an impression should be given to HR that you are not in desperation to avail of the offer. 

Negotiate on In-Hand Salary:

The other important thing to remember is to negotiate on the in-hand salary at the time of salary negotiations. In-hand salary is the amount of salary that you get in your hand after all the deductions excluding taxes.

HRs would generally include the deductions such as PF, Gratuity, and other compulsory taxes in your salary at the time of negotiation. If only the in-hand salary is considered for a hike, then the amount of salary received in-hand would be more. 

The above strategies can be used to negotiate salary with the HR department, putting you in a position to successfully negotiate and obtain a good offer from the new organization. 

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Management.