Chapter 4 Part 2 – Negotiating for The Job
After rounds of interviews, evaluations, hoping and praying, you will eventually be offered the job that you applied for. This would be the last step of your long and challenging job hunting process. The moment that you receive a call from your potential employer, be prepared to discuss terms for your new employment. In some cases, the company will also discuss with you on your expectations towards the job salary and compensation package during the final interview. This sub-section will cover briefly the task of negotiating and securing the best offer from the company.
Setting Your Salary Expectations
For you to negotiate the best employment deal with your future employer, you have to revisit your CV once again. Remember in Chapter 2 you have prepared a comprehensive CV that includes a figure of your expected salary which is an approximate value of your educational background and experiences. Whenever being interviewed and asked about your expected salary, do use the same figure as the one you stated in your CV. This figure will be used as the first bargaining chip with your future employer.
When the time comes for negotiating your salary, always listen to the offer being made before you ask for a higher amount. The employer will have rationales behind the offer being made. In most cases, employer will refer to your past salary and the industry rate in offering you the salary for the job. Before asking for a higher amount, ask yourself whether you really deserve to earn more that what is being offered. You do not want to be underpaid and you also do not want to start on the wrong side with your new employer by asking something that you do not deserve.
Often the salary being offered is only one part of the compensation package. You also need to look into other benefits listed in your job contract.
Allowances, Incentives and Bonus
On top of your basic salary, companies may also offer allowances, incentives and bonus depending on the company policies and nature of the job.
For allowances, certain companies provide basic allowances such as allowances for office parking, phone, car, housing and travel. While it is not compulsory to provide allowances, it has become a more common approach for companies to use allowance to assist its employees in facing the high-cost of living. Allowances help companies to maintain paying lower basic salary while retaining its employees. Take note that in some cases whenever you earn monthly allowance, you may not be eligible to claim for your business purpose activities such as business travel. For example, a company might give its employee RM100 for phone allowance. If during the month, the employee uses the phone for business purposes for as much as RM150, the employee still receive RM100 and not eligible to claim the remainder RM50. Do check with the company on policies behind the compensation package as well as the policy for business purposes claims.
As for incentives, certain jobs especially sales related positions will offer a lower basic salary but complements it with an incentive system. Incentives are usually in monetary form and the employee will receive the incentives every time the sales target is achieved. While it is a risk to yourself, it is also a good way to make use of your capabilities to earn as much as possible as the system indicates that the more sales that you close in every month, the higher amount of incentives that you can bring home. During interviews, do ask the employer on the average rate of incentives payout each month and the level of sales targets that have been set in the past.
As for bonus, there are two types of yearly bonuses. First being contractual which is stated in your job offer that the company will pay a certain amount of bonus regardless of your performance and the company’s performance. Contractual bonus is less risky but often the amount is not as impressive as performance-based bonus.
Performance-based bonus is a type of system where the payout of bonuses depends on the discretion of the company. Often companies pay bonuses depending on the performance of the company and the employee. The advantage of this system is the bonus payout can be very high if the company is achieving high profitability but it is also risky as companies have the right not to give any bonuses if the company is not performing well. Either way, if a company is offering bonus whether it’s contractual or performance-based, you can already be grateful as bonus is not mandatory and there are companies that do not practice paying bonuses at all.
Non-Monetary Benefits
While your salary helps to pay bills and provide food on your table, there are other benefits of non-monetary forms that you need to carefully evaluate in your employment contract. Benefits such as free company car-park, free company products, staff purchase and company trips will provide additionally to the basic salary that in the end is almost equivalent to earning a higher amount of salary.
Medical Benefits
One form of benefit often overlooked by many Malaysians is medical benefits. When you are being offered a job, always double check the medical coverage benefits offered by the company. It should at least be a basic coverage covering yourself and your immediate family. Although you are a bachelor, always think ahead and check whether the coverage covers your future wife and children. Also verify the type of coverage whether it is a third party insurance or the company will simply pay for any medical bills as per claimed. For 3rd party insurance coverage, you can check the service provider’s website for its level of coverage for you to better understand the benefits. For medical coverage using pay-per-claimed policy, understand the company’s panel of clinics and limit for every bill. Also find out whether medical coverage includes optical and dentist as well.
Annual and Medical Leave
Identify the amount of annual leaves that you will be entitled during your employment. In average a private-sector company will give you the benefit of 14 days annual (paid) leave. It is a benefit as you are being paid while taking leave. Check with your employer on the policy of taking leaves and whether you are allowed to take leave during probation period. Same applies for medical leave, check with your employer how many days of medical leaves that you are entitled to and whether you need to have the medical-certificate (MC) from a specific clinic.
Confirmation and Resignation
It is equally important to be clear on your employment contract in terms of confirmation and resignation. Confirmation is crucial as it is the real starting point of your long journey in the corporate ladder of the company you are joining. It is the point where you need to be answerable to the tasks and responsibilities being put on your shoulder. Check with the employer on when you will be confirmed and whether there will be any salary revision after the probation period. By knowing up-front, you will have better knowledge in your salary expectation after confirmation.
As for resignation, it is a job benefit as a good job will allow you to leave the company in a very professional and smooth manner. You need to carefully look at the notice period required for resignation. This is always stated in the employment contract. As a rule of thumb, re-negotiate jobs that require you to put in a notice period more than 3 months in advance. An ideal period would be 1-month which will offer you enough time to handover your work and the company enough time to find a replacement.
After carefully identifying the above points and making sure the offer is right for you, you may finally accept the job offer. Sometimes negotiations can take a few days as companies need to discuss and decide on your requests internally. If you are confident that you have done well after the final round of interview and during negotiations, you should be prepared to receive the ‘Good News Call’ from the company.