Making a career move is exciting because of the potential for growth, cementing your skills and the big one – a potential increase in your salary. But what if your new job offer does not match what you had in your mind? What if the offer presented to you is below what you expected?
Do you just accept the offer on the spot and complain later? Or do you decline the offer and move on to the next employer? In the uncertain and tough economic times that we are experiencing, for most just walking away is not an option.
So, the first thing to do when you receive an offer you are not happy about is to negotiate for a higher salary. A higher salary means you can direct the money towards savings, pay off your debt quicker and meet any other financial commitments. The trick here is that you do not want to get caught in the lifestyle creep trap: where with every pay increase, your lifestyle expenses also go up. You want to grow your net worth by putting more money towards investments.
Interestingly, studies show that women are less likely to negotiate their salary offer compared with men.
Should the salary discussions not work, there are other benefits you can negotiate.
Because most companies structure their packages as “cost to company”, it means that employees have the option to choose if they want to sign up for certain benefits and how much of the benefits they want.
For example, a younger employee who doesn’t have a family might not want a large death benefit or require the most comprehensive and expensive medical aid versus someone older who might have a family and therefore require those options.
With your pension/provident fund, negotiate to have your employer match your contribution if that’s not already the case. This will ensure that you build your retirement savings faster.
FLEXITIME (FLEXIBLE TIME)
The traditional working hours of 8am to 5pm can be rigid. Negotiating flexitime gives you the flexibility to start and finish work at times that suit your transport arrangement, family responsibilities and study obligations.
See if you can get days when you can work from home if your home environment is conducive.
According to labour law, as a new mom you are entitled to four months’ maternity leave; as a dad, you are allowed only 10 consecutive days of paternal leave. It is a good idea to negotiate your parental leave days beforehand if you want to spend more time at home when your kids are born. This can go hand in hand with flexitime; to “extend” your parental leave, your employer can allow you to do most of the work from home instead of going into the office.
If your job requires a lot of travelling it would make sense to negotiate a travel allowance. Since this is a fringe benefit, when your employer reimburses you for fuel spent, the SA Revenue Service will tax the money at your marginal tax rate.
Fringe benefits refer to non-cash benefits granted to employees, but do not constitute cash payments made.
COVERING YOUR STUDIES/PROFESSIONAL COURSES
We all know that tuition fees are quite expensive. Negotiate for your new employer to either pay for your full tuition or at the least subsidise it. This will be of great benefit as you will not use your own disposable income to fund your studies and other courses.
MOVING COSTS (IF YOU ARE RELOCATING)
If your job offer requires you to relocate, you should definitely negotiate with your new employer to pay for the moving costs (if that’s not part of the package already). Moving to a new city or country can be both exciting and stressful; you will minimise the financial stress by having your employer take care of your relocation expenses.
SHARE OPTIONS AND SCHEMES
Share options or schemes are an excellent benefit – some companies will give their employees an option to buy the company’s shares at a discounted price or have the shares vested to them in line with how long the employee has been at the service of the company.
If the share price of the company increases, you will reap financial benefits in the long run, putting you in a better financial position.
Obviously every company has its own culture and benefits they offer to their employees. You have to do your homework and find out what it is you can potentially negotiate with your new employer. But, no matter the what, always negotiate even if it is to just sharpen your negotiation skills.