Interviewing for a new job can reveal the true market value of an individualâ€™s skills and experienceâ€”if he is well prepared to negotiate his salary
Everybody loves a good pay hike. Since he is highly unlikely to get as many increments in a year as he may like, he might consider switching jobs. He may figure that a new employer would value him more, and send off a resume. How well prepared will he be when itâ€™s time to talk about money?
The interview is going the individualâ€™s way, and he is able to impress everyone. Then the human resource (HR) manager shoots the big question: how much remuneration he is expecting? Usually, money is discussed only when the interview reaches the negotiation stage.
The candidateâ€™s answer to that question can make or break the deal. HR managers believe itâ€™s a loaded question. During the negotiation stage, managers rate him for individual personal qualities on the basis of the remuneration he demands. While the individual is justifying his demand, the managers are assessing his mindset towards money, as well as rating his knowledge, self-assurance and understanding of the current demand-supply scenario for jobs in the industry.
How much to ask for? In most people-oriented industries where retaining employees is tough, a hike of 25-30% above an individual previous salary is acceptable. Yet HR managers are not necessarily put off by interviewees who ask for more than the industry norm.
It is expected the interviewee to have given good thought about how much his paycheck should be. People should be asking for remuneration according to their abilities, liabilities and future goals. Their salaries should help them move forward in life.
Their demand will not always be in tandem with industry standards, but that should not deter them from asking what they think they deserve. Lying about an individualâ€™s previous salary is not at all recommended in fact prohibited. Many people resort to this, since the higher salary at the new job would be based on the previous salary. Not only is lying legally and morally unacceptable, but it is also unlikely to work if he is seeking to switch to a reputed company. For most companies, it is now the norm to ask for an individual previous salary slip, Form 16, and reference letters from people in the individualâ€™s field of work.
Some multinationals in fields like real estate, where salaries are sky-high, even hiring a third party investigator to check on the credentials of new recruits. In such a scenario, an individualâ€™s best option and one that is legally unimpeachable is to switch jobs after getting an increment at his old job. Salary structure today is decided on a â€œcost to companyâ€ basis. This means companies look at the total expenses they would incur on an employee which include medical expenses, leave travel allowance, and sometimes even office space.
Trying to decipher exactly how much cash will actually flow into an individual hands may seem confusing at first glance, as he run down the list of sub-heads like car fuel, entertainment, attire, and other allowances. It is, of course, a good idea to make the effort to understand the salary structure. But if he really wants to save all the fretting, let the new employer know the â€œtake homeâ€ that he would like each month.
Leave the fine tuning to the accounts department. Tax benefits Interaction with the accounts department, however, is inevitable, because a candidate needs to know the tax implications of his salary. Employees are often so engrossed in their jobs that they forget to inform the accounts department about their investments, home loans, and so on. Then they get a surprise when they see the tax deductions in their first paycheck.
When a individual joins a new company, he needs to declare the tax benefits he is eligible for. Proof of those investments can come later, so long as it is before the end of the financial year. Cash in hand depends on ones ever growing needsâ€” a house, a car, a better lifestyle. Having more cash in hand is becoming an imperative, leading to a new trend among employees to prefer cash in hand, rather than gratuity and provident fund (PF) contributions by the employer.
Employee stock ownership plans have lost some of their allure, because of the fringe benefit tax on the profit, starting from this year. This is paving the way for higher take-home salaries.
There is more good than bad in going for interviews. Interviews that reach the monetary negotiations stage enable one to know his market value. Some interviewees may go ahead and accept the offer for a new job. And others will use their new-found market value to get that elusive pay hike from their existing company. —