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5 WAYS TO MAXIMIZE YOUR STARTING SALARY
One of the most important things that young professionals should focus on is maximizing their starting salary. This magic number is important because it sets the benchmark for your career trajectory. Here are 5 tips that can help you set the bar high and keep it that way:
Before anything else, you need to be well-informed of where you stand and what you can expect. You need to know the market rate for your industry, your company and your type of job. The more information you have, the better equipped you are to negotiate. Talk to recruiters, talk to your friends, check online forums and refer to salary guides online.
2. Negotiate Get the other side to invest in you as much as possible. The more they have invested in you, the more leverage you have. Talk to them, engage, show interest in accepting the job without committing to it and during the interview, always steer the conversation back to the value you will bring to the company.
Be mindful of the “anchoring bias”. The anchoring bias refers to the human tendency to rely too heavily on the first piece of information offered (i.e., the anchor) when making decisions. For instance, let’s say after you have done your research, you are prepared to ask for S$5k. During the interview, your employer mentions that their starting pay is S$3k. What this does is that most candidates would be naturally inclined to lower their estimate and suggest say $4k. You should not be affected by such situations (sometimes intentional on the part of the interviewer) and stick to your original estimates.
If and when you are asked to provide your expected salary, give a range and aim higher than you expect but within market estimates. Studies have shown that employers tend to offer candidates salaries on the higher end of their estimate because they account for “politeness bias” where they realize that employees tend to estimate conservatively. Shoot for the moon and you might just get the stars. If you are fortunate enough to be in a situation where the number surprises you, keep a poker face and don’t let the high number distract you from the other details of the entire remuneration package (see #3 below).
3. Benefits & Bonuses Benefits are a key component to any remuneration package. Key things to look out for include leave days, medical insurance and skills-upgrading and other flexi benefits. These are also important factors to consider when comparing competing offers.
It is very important to look at ‘bonuses’, whether they are fixed or variable and how they are benchmarked. A low base salary with an in-built 2-month bonus can be worth it when you do the calculations. Many companies nowadays account for an upfront bonus into your base salary so they can market their base salary as higher to attract candidates. This practice is known as front-loading and you should be aware that companies who do this, while advertising a high salary, usually pay out paltry or even no bonuses at the end of the year.
4. #Humblebrag Apart from your core competences (your degree etc.), you should continually invest in yourself by equipping yourself with other marketable skills such as IT skills, language skills or professional qualifications (e.g. CFA, CPA, FRM).
Be sure to include these certificates and qualifications in your CV and to highlight them during your interview. These additional skills can often translate into your employer making a higher offer and you should never be shy to toot your own horn.
5. Long-term Goals Monetary compensation isn’t everything. Some jobs are worth it if it gives you a sense of fulfillment or provides experience to help you achieve a bigger goal. For instance, getting your foot in the door of a famous company, working for a start-up or taking on a role which allows you to have more executive authority. Just be mindful not to shortchange yourself and to routinely check-in with yourself to see if your current path adheres to your long-term goals.
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