Getting a new job is always exciting. However, the job, the responsibilities, and the salary are not just all you have to keep in mind. While accepting a job offer, it is also vital that you consider the remuneration package you are entitled to.
Being aware of all the cash and non-cash benefits your job comes with is important for determining your worth as an employee, and can also be helpful for negotiating a package that you are entitled to.
This article aims to help you understand what a remuneration package entails and how to negotiate the best offer, as per your skills and experiences.
A remuneration package is widely understood to be a part of the total compensation that is offered to an employee in return for their services.
As a form of compensation, remuneration is not just the base salary or employee benefits enjoyed by an individual, it also includes commission payments, overtime pays, bonuses, and other financial benefits that the employee is entitled to. Remuneration also includes any kind of direct payment and other taxable fringe benefits, like incentives and access to company vehicles.
The remuneration package you receive can be dependent on several factors, including your value as an employee. An employee with in-demand skills is likely to get better compensation and perks, than someone who doesn’t come with the same level or skill set. Therefore, it plays an instrumental role in skill acquisition.
The remuneration package is one of the most important discussions in the hiring process and is often negotiated as a part of the retention strategy. It is also re-evaluated if and when you are promoted, or during your annual evaluation. Depending on your performance, your benefits can also be altered.
However, you must also keep in mind that the salary you receive and the remuneration offered to you are not the same. While the salary refers to the fixed amount of money your employer pays you at the end of every month for the services provided by you, remuneration is the total amount of monetary (including other forms of) compensation you enjoy throughout your service tenure. In other words, this package includes the salary, as well as other benefits that come with the job.
Remuneration packages are usually divided into the following categories:
Direct compensation is a kind of remuneration that is indicative of any direct monetary payment that you receive from the employer, in addition to your salary. Direct compensation includes (but not necessarily all of) commissions, tips, and bonuses, which serve as incentives that motivate an employee to perform better to gain more perks and awards.
Unlike direct compensation or remuneration, indirect compensation or remuneration does not come with added financial gains. Instead, they come with perks like access to a company vehicle, flexible work hours, retirement schemes, insurances, and more. Indirect compensations are a great hiring strategy and go a long way in creating a positive impression of the company. Indirect compensation can also include health and life insurance, paid leaves, transit allowances, and equity-based programmes.
So, now that you know what a remuneration package is and what it entails, it is up to you, the candidate, to negotiate a package that is worth your skills and experiences. But how do you do that? Let’s find out!
Remuneration packages are not always the same for all employees, even though they are working in the same company. While having in-demand skills is one of the biggest determining factors of your remuneration package, there are other factors that often influence the type of compensation you are entitled to. This includes the pay structure of the company, and your status in the company.
Similarly, your seniority is also another proponent that will determine your remuneration package; for example, if you are a C-suite executive, you will be offered greater benefits than managers, supervisors, or entry-level employees.
The other important factor to be considered is the business model of the company. Bigger companies are able to afford more comprehensive remuneration packages and benefits, than smaller or medium-sized companies.
The package is also affected by the type of business undertaken by a company and the in-demand skills preferred by companies. On average, if you have the skills necessary for working in the tech and digital industry, you can enjoy great benefits along with a hefty pay rise in your salary every year. This is due to the increasing demand for IT security roles and technical roles based on digital transformations.
By working as an IT security lead or a data scientist, you can enjoy an increase in your salary by almost 20%, while a 15% salary hike has been recorded for software developers, automation experts, and other digital transformation-led roles.
If you have trending skills like digital analytics, CRM management, digital marketing management, and digital content management, you will be majorly favored in the digital industry and can expect a good remuneration package.
By keeping the below-given points in mind, you can negotiate for a better remuneration package that will match your skills, experiences, and expectations appropriately:
A job interview can be a tricky platform with uncomfortable or awkward questions. “What’s your expected salary for the job?” is one of them! While seemingly innocent in its appearance, this question holds a lot of gravity, and if answered properly, can be a potential game-changer for you.
While it's a straightforward question, there is a reason behind companies asking this. They allocate a specific fund to compensate their employees. By asking the question, they ensure that they are able to provide the salary anticipated by candidates. This question also allows companies to establish whether the candidate is qualified for the position.
Expecting a much higher salary may leave the impression that the candidate is overqualified for the position, while expecting a salary that is significantly lesser than the standard amount might indicate that the candidate lacks sufficient experience in the position. In addition, this question also lets companies know if the candidate is aware of their worth as an employee.
To be able to come up with an impressive answer to the question, you must keep in mind the following:
Here are some great ways to answer the question:
While answering, make sure that you stay within the industry salary standards for the position you are interviewing for. Also, avoid giving an exact amount, instead always provide a range and mention the reasons for stating the amount you did.
With an ideal compensation package, you can ensure a great start for your professional career. By negotiating a flexible, positive remuneration package, you can reach professional goals and milestones in your career with greater support and satisfaction.
We hope the above-mentioned tips will help you negotiate a package that is worth your skills and your contributions to the company you join.