Negotiate your starting salary: If you don’t, you can lose out on a lot of money

Maybe you’ve finally been offered your dream job – and as a recent graduate, you might be tempted to accept your new employer’s first offer. But if you drop negotiating your starting salary, you’ll lose out on earning several thousand extra kroner a month.

You’re not alone in thinking this way; and you’re not the only one who feels that negotiating a salary is scary. A recent survey conducted by ManpowerGroup reveals that 50% of Norwegian employees accept a new job before even asking about what kind of salary they’ll earn. But this can prove to be a mistake, since in many cases it’s worth your time to negotiate.

– It’s when you’re starting a new job that you most often get the biggest salary increase. And even many jobs give you the right to an annual salary review, it can still take a long time to work your way up to the salary level you want if your starting salary is low, says Anette Moldrem.

She’s a legal advisor at Tekna who wants everyone to know how common it is for people to negotiate their salary, and how important it is that you dare to do it.

– If you fail to negotiate your starting salary, you’ll quickly lose out on earning several extra thousand kroner a month. And this’ll happen over several years, she says.

Use the information you have available

Each year, Tekna publishes its starting salary guideline, which shows the average starting salary for recent graduates working in the private, governmental and municipal sectors.

– You can use this to determine what you can expect to earn at your first job. You can also use it as a bargaining chip if you get a lower offer, says Moldrem.

In addition, she claims that many organizations that are hiring follow along with this guideline and set their salaries accordingly.

– At the same time, companies can be very different; for instance, startups of course often offer lower salaries than bigger companies do. And Tekna’s guideline doesn’t mean that you shouldn’t negotiate if you’re offered something above an average salary, either, she says.

If you’re unsure about the salary level you can expect, you should contact the union representative in the company where you’re been offered a job.

– Representatives negotiate salaries every year for their company’s Tekna members, so can answer your questions on what kind of salary you should expect. If you don’t know whether the company has a union representative, you can contact us at Tekna, and we’ll put you in touch with the right person, explains Moldrem.

You don’t need to worry about it if someone finds out that you’ve been looking into this beforehand.

– Representatives have to keep all dealings with members confidential, so of course they won’t go running to the boss and tell them that you’ve been looking into this before your negotiations, she says reassuringly.

Get help to look through your contract

Moldrem’s job as a legal advisor means she not only helps company union representatives with negotiations, but she also stays in touch with individual Tekna members through Tekna’s legal hotline. 

This is a service provided to all Tekna members, and you can feel free to call it if you have any questions about a job offer.

– If you’re wondering about something in the contract, you can send it to us and we can look through it together. We can also help by evaluating your salary offer and giving you some tips on how you should go about negotiating – if you have to do so, says Moldrem.

One point you should check is if the contract gives you the right to receive full pay if you’re absent from work due to illness or parental leave. In these cases the National Insurance Act covers up to 6 G, which is currently around NOK 670,000 (you’ll find an updated and correct value for G here (in Norwegian)). Many Tekna members’ salaries will quickly exceed this amount. There are very many employers that offer full pay to their employees, so if you don’t have this right, you should try to get it through negotiations.

How to negotiate

By now you must’ve gotten the point that you should negotiate your salary: but how do you actually do it? These are Anette Moldrem’s best tips on how to negotiate:

– Make a phone call. If you’ve decided to raise questions about your salary, you should call instead of sending an e-mail. This is because it’s easier to test the waters this way; you’ll also make sure there haven’t been any misunderstandings, either. Start out by saying how happy you are to have gotten an offer, ask a few questions about the job and your position, and make sure that you keep a positive tone throughout the conversation.

–  Ask questions. Instead of demanding a higher salary, you should ask questions about it. For example, you can say: «This salary is lower than what I had in mind, so can any adjustments be made to it?»

– Be well prepared. Your employer has reached the conclusion that you’re the right person for the job, and there’s a good reason for this – which is your best bargaining chip! Make sure to point out what you know your employer will benefit from by offering you the job, and that this is why you should get a higher salary. If your employer asks you what kind of salary you’re looking for, you should’ve thought out an answer to this question beforehand. Ask your employer if it’s possible for them to make a new evaluation (most will answer ‘yes’ to this question).

– Use the statistics and information you have available. Feel free to refer to the starting salary guideline if you’ve gotten an offer that’s lower than what you see there. Use the information you have available to back up why you should earn more.

You should also prepare yourself for the fact that salary questions may even be raised during your interview.

– Sometimes an employer might ask you during your job interview what kind of salary you’re looking to get. If this happens, it’s important that you keep a cool head and don’t give them a number. If you say NOK 630,000 you more than likely won’t get more than that. And that’d be really dumb if they can actually pay you NOK 670,000, says Moldrem.

She has a tip if you find yourself in this situation:

– Work towards getting an offer from them first. Feel free to say that you expect a competitive salary – but be pleasant and polite about it. It’s the employer that’s created the position, and they surely have some idea of what they can offer you. Ask if they can’t make an offer they feel is appropriate instead, and then you can both take it from there, she says.

If you don’t succeed

While trying to negotiate a salary is often worthwhile, sometimes there’s nothing extra that an employer can offer you. If they don’t have any possibility of giving you a higher salary at the start, ask if you can have a new salary review when your trial period is over (this point should be included in your employment contract). This’ll give you the chance to show them what you’re worth, which’ll in turn give you even better bargaining chips when your trial period’s over, she notes, adding:

– You can also try to make sure that you’ll be a part of the organization’s regular salary negotiations from the first year you start to work there. So if you start in June, but salary negotiations are in January, you’re guaranteed to get a raise then instead of having to wait another year, Moldrem explains.

Salary is only part of the package

What if you don’t succeed at getting the salary you’ve dreamt of? If this happens, you should at the very least be quite proud of yourself that you at least tried to negotiate, and you should look at your other benefits as well – because even though salary’s important, it’s not everything.

For instance, you should check into the amount of your future pension. Saving for retirement is an important part of the benefits you get through working; in fact, it’ll be your salary when you get older.

– Most people have a defined contribution pension plan, which means that a percentage of what you earn is deposited into your pension savings account. These rates vary from 2-7 percent, explains Moldrem, and continues:

– If the pension plan’s bad, it’s important for you to have a higher salary so you’ll be able to save up enough of a pension on your own (use this as a bargaining chip).

You should also find out about the insurance plans and fringe benefits that are provided by your organization.

– Having good coverage means that you can save a lot of money by not having to buy insurance policies on your own. It’ll also help your personal budget if your employer covers your mobile phone as well as your broadband and mobile phone bills, says Moldrem.

Before making any decision, you should look at the big picture of what you’re being offered. Your work schedule, job description, workplace and working environment are important factors to consider; they should all figure into your overall assessment of your work situation.

And finally, when all is said and done, you’re the only person who can decide what’s good enough for you.