Pay Package Negotiations

 Pay Package/Salary Negotiation : 

Mostly underlined as CTC, Cost to Company, but not necessarily implied to the Net pay.

CTC, includes many other allowances that any Organization may pay & might not be a part of the net salary, such as telephone/mobile allowances, Mediclaim, subsidized meals & so on. 

Net pay is what drops into the account after all necessary deductions.

What are the criteria to be considered while getting to a level where the salary part is discussed & negotiated:

A) One must understand that CV & the follow through of every interview may always remain a determinant factor in having any say or leverage on the Pay Package negotiation.

B) Let us also understand some probable conditions of hiring, Organization is hiring because someone in that position is leaving, any healthy organization will first consider to promote the next person available in the department, if at all they were working on any succession plan, because even if the person is junior & with less experience than the person leaving, being in the system they will have a better knowhow of the processes & while promoting them for the next level, they are not going to get the same salary that they were giving to the person leaving.

C) So the question must be asked, why is the hiring being done? Is it that someone is being promoted or that someone is leaving? Here if it turns out that the Organization is hiring directly for the position that is getting vacant, than there are better chances for a negotiation, but if they are able to share the information that there is a promotion or transfer from the within the Organization & that very vacancy is being considered, than in that case the negotiation may remain dominated by the Organization.

D) No Organization will ever have intentions to increase their cost by adding more value for the hiring position. So for example if the person leaving is drawing 200K per month & is having working experience of 8 years, the scouting of next person will be done with experience of 5 years so that they can be at a level of 130k per month or so & hence with about 20 to 30% hike they may be expecting the final salary may come to around 170K if not lower.

E) Or they may pick the candidate with more numbers of years in experience & the lowest present pay amongst all the available candidates, but still they will not exceed, that 200K of their present day cost for the position, if at all there was any probability to add cost on the position the Organization would have done that & retained the person leaving, so there shouldn't be any illusions.

F) Again the negotiation is on demand & supply, if they are in immediate need for the expertise & cannot wait for the notice period, they may agree to even 40 to 50% hike from what your present pay is, but once again that means that either the pay being earned now is lower enough than the expected 40 to 50% hike may make up, but still within their 200K per month budget.

G) Given all these jargon, it is also possible that if they find out through the interview that your specialized skills & experience can be an asset for them, then in that case the offer may cross that of 50% hike, you must be able to assess, because in some fields, they need people with certain expertise & they are not easily available & in that case they will be ready to cross over their budget of 200K per month by another 10 to 15%.

H) So to summaries, all these probabilities, anything starting from 20% to 50% hike may work depending upon all other given variables.

I) Make sure that you discuss NET pay package, as the CTC may be variable & it may not be the same that is being offered when you may compare to what you are earning, if possible then first understand their CTC criteria, that is what allowances other than NET pay they are considering as part of their CTC calculation.

J) Do not hesitate to ask for their yearly bonus & increment % structure, as it is very important to understand if the Organization is having a promising track record on overall well being of their stakeholders. Along with that, find out if there are any career growth options & prospects designed whereby someone working with dedication can rise up to a senior level within a span of 5 to 8 years. Also confirm about the minimum increment % & performance based highest increment % ever given, as that may give a clear understanding on how dedication & performance are evaluated.

K) Number of leaves available, that is CL, SL, PL & the leave rules must also be understood.

L) Find out if the Organization is having any system whereby there is systematic shuffling of the profiles, as that can either give better opportunities to learn new things & as much it can ruin career growth, how is it done, is it optional or mandatory?

M) Other than sales & marketing profiles, you may have to understand if the profile you are going to take up may require any outdoor duty assignments, overnight stay, is the profile responsible for multi location factories or offices, in such cases, get a clear understanding on TA, DA.

N) Write down all the discussions, with yes & no given as a statement from the panel that is negotiating the pay package, if a job is being offered, do send an email on all the agreed terms & conditions if the same is not part of the offer letter. So that it can be a reference point whenever it is necessary.

Be realistic & better deals can be struck!