The Truth About Unpaid Internships

Employers could be breaking the law if they continue to offer unpaid internships, experts have warned.

The warning came after a survey from the Sutton Trust found that of employers offering internships, almost half said they were unpaid positions.

Just over a quarter offered expenses only internships and 12% no pay or expenses whatsoever.

The Pay As You Go survey found that both graduates and employers are confused about the current law on unpaid internships. Under national minimum wage legislation, interns must be paid if they are expected to work set hours or on set tasks. Up to 50% of employers and 37% of graduates surveyed were not aware that most of such unpaid internships are likely to be illegal.

Retail had the highest proportion of unpaid internships at 89%, followed by the arts, 86% and the media, 83%.

Only 26% of IT & telecoms and 32% of manufacturing internships were unpaid.

The research found that graduate internships appear to be on the rise, with 46% of 21-23-year olds have been employed this way, compared to 37% of 27-29-year olds. Younger graduates are also more likely to have taken on more than one internship. According to the report, there are around 100,000 interns working in Britain every year, with around 58,000 unpaid.

The survey comes as a bill to ban unpaid internships over four weeks in length is brought to the House of Commons. It would like to see all internships longer than one month to be paid at least the National Minimum Wage of £7.05 for 21-24-year olds, and ideally the Living Wage of £9 per hour.

In addition, the report recommends that internship positions should be advertised publicly, rather than filled informally and recruitment processes should be fair, transparent and based on merit.

Sir Peter Lampl, founder of the Sutton Trust and chairman of the Education Endowment Foundation, said: “Unpaid internships prevent young people from low and moderate-income backgrounds from accessing careers in some of the most desirable sectors such as journalism, fashion, the arts and law.

“This is a huge social mobility issue.  It prevents these young people from getting a foot on the ladder. The legal grey area around internships allows employers to offer unpaid internships with impunity. That is why the law should be changed.”

What every manager wants to avoid

In our work, we audit any new company we work with and have observed that a common theme in many is that managers don’t appear to want to manage.

By that we mean managing people. Setting standards on performance and monitoring them, holding employees to account, identifying what behaviours are needed to create the right culture to grow the business and being confrontational if and when it is necessary. Or they are only embracing the nicer side of management. Giving out pay rises and promotions etc

Managers and leaders seldom avoid this type of work for any other reason than they don’t know how to do it and are worried about getting it wrong. Often employees pick up on a fear and become experts on how to make the most of this which is rarely beneficial for the manager or the company. Equally managers aren’t set any targets or held to account about whether they do it (well) or not. So they will naturally focus on what is valued.

As we are all aware, being good at a technical or specialist role can often lead to promotion into a completely different type of role. Leading and managing a team is so much more than being the most senior member of it with the biggest say. The person that earns the most does so because they also have significant people management responsibilities and are accountable for their team as well as business area. Rarely is this properly explained. During recruitment or promotion discussions. Usually the elephant in the room and therefore often misunderstood.

No training or guidance for managers

Here are some of the things that managers have often had no training or guidance on whatsoever:

  • A core understanding of management theory and what is relevant to their company and industry
  • How to delegate and communicate effectively
  • An understanding of their obligations and duty of care under employment and health and safety legislation
  • How to turn key organisational KPI’s into objectives or targets for staff
  • The difference between technical and behavioural competence
  • How to understand and harness the power of personality
  • How to select staff – interview competentantly, understand and recognise unconscious bias and discrimination. Understand the equality act.
  • Motivational techniques and team building

It stands to reason that if you don’t know how to do something you may avoid it or try and get someone else to do it. Particularly if you fear negative consequences for yourself. Or if you observe that no-one else is tackling similar issues.

Revolving door culture

But as many will be aware, not doing something often has a bigger impact on your culture than doing something, even if it’s not perfect. Not tackling people management issues will build up over time until you start to observe that your good people are leaving. You will replace them of course. At considerable time and expense. And then your fanastic new hire might leave before their probabtion period is up and you start to wonder if it’s something in the business.

The truth is that it’s your culture. How you do things. What you avoid or ignore.

Targetted development

But you can address the fear and reluctance of maangers with some targeted management development training. A core part of that should be an assessment of whether you have the right poepe in lead roles.  Often you will have and they just need devellping. But some people don’t make or want to manage people. No matter how much you spend on core Leadership programmes. However they may be suited to a different specialist role? Or have a No 2 that is interested?

What provider to pick?

There are plenty of companies around who specialise in leadership and management development training. Many long established and many newer ones coming through.

Talking to CEO’s about their previous experiences of such engagement they often report that many staff enjoy attending such initiaitves but they rarely had a long lasting effect as they often didn’t address the following issues:

  • Who held managerial posts
  • What their remit was v what they did
  • Whether the corporate structure was correct
  • What the culture was (desirable v actual)
  • How they would be managed post the intervention

It was hard therefore to quantify any return on the investment made often because the desired outcome hadn’t been pinned down or properly understood.

Our approach

At Amelore, supporting organisations to develop managers has become a growing area for us.  We usually work with companies that are already established and performing well but who want to develop their management team and culture to create space for a senior team to focus on the strategy. Often they don’t have an HR Director in their business.

Our work as external HR professionals can involve us recruiting new managers and coaching key individuals along side regular internal workshops. We can honestly say that every company has different needs and consequently different programmes.

What we bring is our insight into how to make companies work better which we’ve gained over many years. And our HR expertise.  And just like Mary Poppins, we stay as long as we are needed. Ultimately our aim is to leave that company in a good place to grow, compete and innovate. To give it competitive advantage because it works as well on the inside as the outside.

Your Recruitment Options

Hiring the right people is as significant to the success of a company as the business model and health of the balance sheet.

Recruitment is a highly lucrative unregulated and fast growing industry. It is important therefore for companies to understand the different options available to them, the costs as well as the benefits and any downside of the choices they make.

Common recruitment mistakes

Organisations in high growth mode often run very inefficient and costly recruitment processes with little thought for the candidate experience even though it is a seller’s market.  Multiple repetitive interviews, waiting until vacancies have been created to start a process and failing to assess candidates thoroughly are typical.

Some Key Facts

The CIPD (Chartered Institute of Personnel and Development) in partnership with Hays Recruitment, conducted a Resourcing and Talent Planning survey in 2015.

Resourcing and talent management in current economy “an employee’s market”

  • Half of CEOs have recruitment & talent management as a priority;
  • Three quarters are recruiting key talent/niche areas;
  • Growing demand for labour – more than half expecting headcount to increase;
  • Skills shortages are escalating – four-fifths feel that competition for talent has increased;
  • Lack of specialist or technical skills & lack of sector/industry or general experience were common problems;
  • Organisations are increasingly required to be creative in both their search for candidates and the packages they offer.

What are your recruitment options?

Your network – Many companies use their personal network to find staff and this can be very effective. However it can also lead to skills shortages and complications with personal relationships.

Advertising on line – Companies may advertise via online sites such as Linkedin, Indeed, Monster, Fish4jobs etc  This has the benefit of advertising that your company is busy and hiring but can create a lot of administration.

Recruitment Agencies – You won’t have been in business long before the sales calls start.  When choosing an agency, try and get a recommendation and check their credentials. Anyone can set an agency up with no qualifications or experience. If things like diversity and inclusion are important to your company make sure you ask about this.

Executive Search or Headhunters – This is usually used for senior or specialised roles due to the cost. Finding a firm that understands and challenges you is worth a lot. Meeting a few firms and interviewing them can be helpful.

Independent HR company or freelance individual – Many experienced HR professionals have strong recruitment experience gained from working in-house. A key component of recruitment is identifying the passive candidate.  You pay a day rate for experienced professionals to find and speak to candidates for you.

They will often also manage the entire process for you, even if you work with an external recruiter. Always a cheaper option but requires an investment in developing knowledge and relationships so the right candidates are identified. Key factor here is that there is no placement fee so no pressure to put up salaries or package to enhance the fee.

What is the difference between Executive Search and Recruitment Agencies?

The aim of Recruitment Agencies is to fill a position with the best available person. Recruitment agencies source from a pool of candidates that are actively looking for a new challenge by advertising on various platforms. This leads to a group of candidates that are “self-selected” of which the selection was not pre-determined by the company.

The aim of Executive Search consultants is to locate and recruit the best person, regardless of whether he or she is already employed or seeking a new position.

This approach can broaden and deepen the talent pool available to a search firm’s clients and places the control of who should be part of this talent pool, squarely in the hands of the client company.

There may also be the use of specialised psychometric tools, resources and skills to enhance the selection process.

The costs

Executive Search and Recruitment Agencies tend to charge a percentage fee or a retainer.

The percentage fee is based on the starting salary of the candidate and is normally payable once the candidate starts work with you. This form of charging is most common and if you don’t find a suitable candidate, you don’t have to pay the agency anything.

However, fees can vary from 8-25% depending on the agency and the salary. If you choose a retainer fee, it is agreed at the outset; with a percentage being payable upfront and the remainder due when the candidate starts their employment.

If you are using an independent HR consultancy you won’t pay a placement fee. Just a day rate which almost always works out cheaper.

Looking ahead

It is important for companies to understand and cultivate their ability to read market conditions, trends, movement and fluidity in order to develop and manage effective recruitment strategies. Needs changes as companies grow and it is important to regularly review this.

The truth about Tribunal Indemnity Insurance

Many busy SME owners choose outsourced HR providers based on the fact that Tribunal Indemnity Insurance is offered and so they feel they have mitigated against a potential financial risk and made a good choice.

However many don’t fully understand what this insurance is and the impact on their business of signing up to such a service. They also have little idea of what risks if any they actually have in their business of someone making a successful claim against them. This blog explains it further.

What is it Tribunal Indemnity Insurance?

Because employment law can appear complex and full of tricky loopholes, the scaremongers selling tribunal indemnity insurance often have a field day by playing on people’s fears of something that can in many circumstances be prevented.

Tribunal indemnity insurance takes various forms which range from insurance against all legal and compensation costs arising from a tribunal claim, to just simply covering legal costs or nothing at all because you didn’t follow their rules.

As with any insurance policy, the first step is to think about the risk you are insuring against. It’s an easy decision for an electrical firm with a warehouse near a river to insure against flood damage. If there’s a flood, all of the stock could be wiped out and the business could go bust. The risk is high, and so is the potential cost of the insured event.

For business owners, it’s not so easy to quantify the risk and potential costs of a tribunal claim, so they go for peace of mind, and take the insurance. The reality is that there are many steps in the journey to an employment tribunal, and an employer who has sensible HR policies and procedures in place, and follows them, is at a very low risk of losing an employment tribunal claim. Even if the employer loses the claim and has to make a compensation payment, the costs are often nowhere near as high as expected.

The claim with the highest sum awarded was in a sex discrimination claim. These are technically uncapped, and can also include awards for injury to feelings.  But the median award in 2016/17 for Sex Discrimination claims was £8,381and for Disability Discrimination it was £10,235. Although there will always be media stories about huge successful claims, they are rare, and the median award is a more realistic indicator of your potential financial risk. The median compensation payment for Unfair Dismissal claims in the same period was £ 7,521.

Three things you should know about Tribunal Indemnity Insurance

No 1 – You may not even need it

The electrical services company will not sit and watch the river rising or not worry about their stock, just because they have insurance. They will use sandbags, move the stock to higher shelves, and stand by with buckets to bale out the water as it flows in. Nobody wants to have to deal with the aftermath of a flood. It’s better to prevent the damage in the first place. If business owners took the same approach to people issues, and took notice and practical action early on, there would be little risk of a tribunal claim, and therefore little need for an insurance policy.

There are HR experts, like us, who can explain all the rules, and help managers to take each step carefully, ensuring that employees are treated fairly and that the needs of the business are also met. This is equivalent to using sandbags.

If managers are not capable of handling an issue with performance, or there is a persistent problem, such as bullying and harassment, then HR experts, can provide training, coaching and even hand holding to support them. This is effectively like moving the stock to higher shelves. But the effect is longer lasting as they are learning how to manage such situations and won’t be fearful of them.

If matters are so serious that the employee is likely to be able to make a claim at an employment tribunal, there are HR experts like Amelore, who can help the business to evaluate the risk of a successful claim, and mediate between the employer and employee.  If that doesn’t work/or it’s to late for that then they can negotiate the terms of a settlement agreement, making a financial payment to the employee to leave the business and waive all their rights to making a claim against you. This is not desirable, and does cost money, but still salvages the situation, a bit like baling water with a bucket. However often this will be much less than you think.

No 2 – Not all of your costs will be covered

If the tribunal claim goes ahead, there will be legal costs, but much more significantly, there will be huge management time lost in the preparation and aftermath of a tribunal – these costs will not be covered by the insurance. The impact on employee motivation, and even on management morale, which ultimately hits the bottom line of the business, doesn’t have a price, and therefore isn’t covered by the insurance.

Using a pragmatic, knowledgeable HR professional to avoid the problem will always be cheaper than paying a lawyer to fix it.

No 3 – Insurance companies don’t like paying out

The real nub of the issue is this – there are so many ‘get out’ clauses in the tribunal indemnity insurance, that an employer runs a real risk of thinking they are covered, only to find that the insurance company then gives lots of reasons why they won’t pay out.

If the insurance is offered as part of an HR service, there will be a big caveat stating that if the employer doesn’t consult the service provider and follow the employment law advice to the letter, the insurance will be invalidated.

This also means that the HR service provider is likely to sit on the fence, or tell their client what the law is, without committing to a recommendation, for fear of invalidating the insurance. So the whole process will go on and on whereas most SME’s need a quick resolution so they can focus on their business.

Some providers may even boast that they help their clients to make sure their paperwork is correct, so that if a claim goes to tribunal, they will have a ‘bundle’ already prepared, saving lots of time. It doesn’t save lots of time for the business owner or manager trying to do their day job and providing them with that paperwork.

In our experience the vast majority of employees are reasonable people, who in turn want to be treated reasonably by their employer. The vast majority of managers and business owners want to have happy, engaged employees.

Surely everyone’s time and effort would be better spent building good relationships, ironing out misunderstandings, and dealing in a reasonable way with problems, than filling in forms, following scripts and ticking boxes to make sure that the tribunal insurance is not invalidated?

Summary

So in summary our advice is if you are looking at HR outsourcing providers don’t base your decision on fear.  Fear of something you don’t fully understand. If anyone is selling you their services and using fear as their main incentive ask yourself why?

A good HR outsourcing provider will audit your business and then make clear practical proportionate recommendations to ensure you are legally compliant and have good HR practices embedded. This may involve training your managers. This significantly reduces the risk of a successful claim against your business.

Also take care that the outsourced HR provider you select doesn’t tie you into a long notice period as that will tell you something important about them. Long notice periods are designed to cover poor service. Most SME’s don’t have the time or the energy to battle their way out of a contract they have signed in a rush without understanding the potentially negative consequences.

If you do have an employee dispute and are supported by an outsourced HR provider that doesn’t offer Tribunal Indemnity Insurance, this will be dealt with swiftly and you will benefit from pragmatic commercial advice about your options and any risks.

At Amelore we don’t offer Tribunal Indemnity Insurance. We work with businesses and individuals and firm but fair. We have also never been successfully taken to an Employment Tribunal.  We are not complacent about that fact but we are extremely proud of it.

How should payments in lieu of notice be taxed from April 2018?

From 6 April 2018 all payments in lieu of notice will be taxable, whether contractual or non-contractual. Income tax and class 1 national insurance contributions will be due on the amount of basic pay that an employee would have received if they had worked their notice in full.

What are the current tax rules on payments in lieu of notice?

Currently, if you have a contractual right to make a payment in lieu of notice (‘PILON’), that payment is subject to income tax and national insurance contributions (‘NICs’).

If you don’t have a contractual right to make a PILON (because there is neither an express term in the employment contract nor an established custom and practice of making a PILON), any payment made in respect of an employee’s notice entitlement is generally regarded as ‘damages for breach of contract’ and the first £30,000 can be paid tax-free and without deduction of NICs.

What tax rules will apply to payments in lieu of notice from April 2018?

From 6 April 2018, all payments in lieu of notice will be taxable. The principle is relatively straightforward but there is a complex statutory formula for calculating the sum that should be taxed, known as ‘post-employment notice pay’ (‘PENP’). PENP is, broadly, the salary the employee would have received during any unworked period of notice minus any contractual PILON. It is calculated by reference to:

  • Basic pay only (before any salary sacrifice), disregarding bonus, overtime, commission, benefits in kind etc.; and
  • How much statutory or contractual notice (whichever is longer) the employer is required to give to terminate the contract.

PENP is subject to income tax and NICs in full. The balance of the termination payment is eligible for the £30,000 tax exemption and full NICs exemption (provided it is an ex gratia payment).

Statutory redundancy payments are exempt from PENP calculations and qualify for the £30,000 tax exemption, provided they are genuinely paid on account of redundancy.

The new rules will apply only where employment terminates on or after 6 April 2018.

There may be significant tax implications for non-contractual PILONs made from April 2018. For example:

  • An employee’s employment is terminated without notice on 30 April 2018. The employee is paid £5,000 monthly (basic pay); has a 3 month notice period; and there is no contractual PILON. They receive £35,000 compensation on termination. This an ex gratia damages payment, not linked to any contractual terms such as bonus entitlement.
  • Under the current rules, the whole compensation payment qualifies for the £30,000 exemption. Income tax is due on the balance of £5,000.
  • Under the new rules, income tax and NICs (both employer and employee) are due on the PENP of £15,000. The balance of £20,000 qualifies for the £30,000 exemption.

And from April 2019?

Currently if a termination payment qualifies for the £30,000 exemption, tax is due on any excess over £30,000 but no NICs are payable. From April 2019, employer NICs will also be due on the balance over £30,000. With employer NICs currently at 13.8% this will significantly increase the cost of some termination payments.

In practice

All employers should be aware of the new rules and think about how they might impact on any termination negotiations. It seems that PENP will need to be calculated for each employee whose employment is terminating including those with contractual PILON clauses (although we are still waiting for guidance from HMRC).

Where there is currently no contractual PILON clause:

  • Making a PILON where the termination date is 6 April or later will potentially result in significantly increased costs for both employer and employee.
  • Consider whether to exit any employees prior to April 2018 to take advantage of the more favourable tax position.
  • Think about including PILONs in contracts going forward. Having a PILON clause allows a payment in lieu of notice to be made without being in breach of contract, thereby preserving any post-termination restrictions. There will no longer be any tax benefit in not including one.

Please get in touch with us if you would like to discuss the impact of the new tax rules on your termination arrangements.

Zero hours contracts – not always a bad thing?

You may have heard a lot about ”zero hours contracts” in the last few months, be that in the mainstream media, the business press or even professional publications and Parliamentary questions. They have generally been portrayed as a “bad” thing, but is that really the case?

Certainly the TUC have raised concerns about how these contracts are being used by some businesses, where they believe that workers are being unfairly exploited and the employer is avoiding its obligations.  Typically this has tended to be in the retail and hospitality sectors where senior managers argue that tight cost margins and peaks and troughs in customer demand leave them with few other options.  Critics have said that the flexibility that this type of contract offers the employer, doesn’t necessarily give the same flexibility to the worker. Examples being cited include workers having to be available at short notice, even for anti-social working hours, and being deliberately penalised (by not being offered more work) if they turn down a shift.

For some workers these types of arrangements do cause them huge problems. Be it having an unreliable and unguaranteed income, or having little control when they work and trying to balance this with family commitments.  Certainly trying to combine several zero hours contracts to try and generate a reasonable income can be impossible.

However for others this causes less of a problem. This could be because they already have some other form of paid work that guarantees them an income and this helps to “top up” their earnings to a better level. It could be be that they are a student or are semi-retired and don’t want to actually work too many hours, aren’t solely dependent on this money to live and are happy to work “as and when”.

Perhaps it comes down to what type and level of income and what degree of certainty people need?  If you know that, as a student, for one week a year you will earn money by working as part of the Graduation Week team, then you can plan your life and finances accordingly. For the university or college they know that they have a cohort of people who are willing to work flexibly during Graduation Week and can ask them to work as and when needed. If both sides are clear on this and it’s a mutually satisfactory arrangement, where is the problem?

Interestingly the recently published Taylor Review makes some similar distinctions between the “bad” and “acceptable” types of Zero Hours contracts. Certainly the recommendation about allowing people the right to request defined, regular hours (albeit it after 12 months) has to be a good thing. Equally the recommendation that those on  Zero Hours contracts should receive at least a higher rate of the National Minimum Wage to compensate for the uncertainty of their work, has merit too. Whether companies choose to do anything about this is another matter….

At the moment the recommendations from the review are just that – recommendations. We wait to see if the government decides to do anything about them and “encourage” employers to adopt them. Watch this space.

 

 

 

Looking to recruit high quality staff but not succeeding?

Despite the looming shadow of Brexit, many UK organisations are still recruiting – albeit on a temporary rather than permanent basis.  Many industry sectors are reporting that it is still difficult to find the right candidates with the right skills and experience, despite the fact that many people are out there searching for new roles right now; myself included.

Is it a matter of the right skills not being out there in the job hunting population or is something else at play?  Here are a couple of examples to illustrate what I mean….

A friend, J, is looking for a new role and career change.  Knowing this he is prepared to take entry level role with the right organisation as long as it gives him what he’s looking for.  J likes being outside, getting up early and working autonomously – he thinks that being a Postman is just the new career for him.  Then he tries to apply for a role with Royal Mail….. To cut a long and painful story short, J’s “candidate experience” is a very negative one.

Why, you may ask?  This should give you a flavour and is not unique to the Royal Mail:

Applications have to be made via an online recruitment portal, which requires you to register, fill in your personal details and to complete an online assessment.  Easier said than done…. J is fairly computer literate and his brother is an “expert” – they try and fail several times to register a basic application.  There is no phone number, email address or help option for him or other applicants to help them with this labyrinthine application process.

If J wasn’t so keen he would give up now. Other suitable applicants may not have the “IT savvy” or the perseverance, so Royal Mail is losing out on a potentially large candidate pool. (how IT savvy do you need to be a Postman anyway?)

  • Where there are multiple vacancies, perhaps with a minor change such as working hours / days or work base, J has to apply separately for each. Each time he applies for a role he has to do the exactly same online assessment again and again.  Frustrating, a waste of his and the Royal Mail’s time (and money?) and it undermines the validity of the assessment. (practise makes perfect – so repeating the test and getting the feedback means you can easily boost your scores).
  • J finally manages to get an application registered and waits to hear. And waits…. And waits. The closing date has been and gone, and despite being told to check his “portal” for progress / an update, there is none.  There is no phone number or email address for him to chase this up so he has to decide whether he waits any longer.  He’s been invited to attend another interview for a different role – so perhaps he’ll just go with that one instead.

I can echo similar experiences to J’s and can add to the what not to do list further:

  • I have a non-standard address and post code – the computer says “no” to allowing me to progress my application. Now what – make one up? (easier said than done)
  • The salary and the exact work location are a mystery. How do I know if the role is paying enough for my needs and am I able / willing to work in that location? (client confidentiality is not an excuse!)  Should I bother to apply?
  • Do I really want to spend hours filling in a very detailed online application form when the majority of this information is on my CV? Can’t I just upload my CV and add in the missing bits?  Also – I can’t save my application part way through – it’s all in one go or nothing.  I don’t have 2 uninterrupted hours available so perhaps I won’t bother….
  • The recruitment portal promises to save my details for next time, should I apply for other roles with the organisation. It doesn’t….  I have to start again if I want to make another application  – do I want to go through that pain again?

So in summary, many of the issues that are putting people off seem to be due to overly automated process with no “human touch”.  Theoretically going for an automated, standardised recruitment portal should make recruitment slicker, cheaper and easier for your organisation – but what about for the candidates?  The initial impression they get from your recruitment system can be extremely negative and it means you have lost them before you even know about them. Employee branding, good PR, your employer reputation and your brand recognition / values aren’t going to change that.

Is it time for a rethink and change to your recruitment approach? We can help……..

www.amelore.com

7 tips for negotiating a promotion…

No-one enters the workplace, having been taught how to manage their career and what, when and how to negotiate. It’s not something companies teach their staff either as it suits them just fine if their employees are not informed or confident in this area!

Just like networking or giving a polished confident interview, knowing what to do to give outstanding performance or gain a promotion, negotiations are part and parcel of life, especially at work. Practicing and learning more about it is something that most people could benefit from.

Too many workers, because of lack of confidence, take the easy way out and avoid the uncomfortable conversation when asking for a promotion or pay raise. Like it or not, it’s something you’ve to get comfortable at, as no one is going to voluntarily offer to match your value to the salary – except yourself.

This is one of many things you need to do in managing your career and here’s a few useful tips to help you through (it can be quite a fun process when you know what you are doing)!

  1. It’s a negotiation process, not a battle. 

Sometimes it’s easy to fall into the trap in thinking that negotiation is a war, it’s “you vs. them”. Changing this mindset is crucial to improve your chances for a successful outcome. You need to view the negotiation as a discussion and a partnership instead. By making it less personal, you’d be in a “friendly but assertive mindset”, trying to work things out for the benefit of both parties. If there is no clear business benefit it won’t happen. It’s something you have to do for yourself in planning your financial future and career.

Remember any negotiation at work is not a personal thing so don’t let it become something personal.

  1. Always know your worth to your employer

Of course, you need to enter a salary negotiation prepared. It’s hard not to get emotional, but you need to treat it as if it’s a pitch for a project, for your services. Most importantly, you need to have a good idea of how much you’re worth to your employer, and there are many ways to do that:

  • Do a thorough search on LinkedIn Jobs for similar roles to get a benchmark salary range for your role. This is a simple gauge of your salary at minimum.
  • If you can, start interviewing externally for a job you’d like as if you’re planning to leave your current role. Although more tedious, this has various benefits of improving both your interview skills and your confidence as getting an actual job offer gives you a proper benchmark for compensation package and what you’re worth, not to mention it strengthens your bargaining position later on. This is something we personally highly recommend. Plus you appear less desperate in the negotiation which is always a good thing!
  • Find out the cost of replacing you – meaning how much it will cost the company if you leave. In particular, if you’re working on projects with tangible deliverables (such as £ X cost savings per year etc. vs. if you hire external consultants) – these are important facts to know besides the actual cost of hiring someone to replace you. There’s also recruitment costs, project delays, training cost and management time for recruitment/induction etc – build a reasonable argument around this and emphasize that you’re delivering results to your company and have examples/proof of your contributions (see next point).
  • Remember most managers have no idea the true cost of recruitment as often budgets are kept separately by HR. But working it out can be a powerful argument that also gets you noticed.
  1. Go in there to promote yourself – no time for false modesty

Time to sell/pitch about how awesome and valuable you’re to your firm. It helps to have materials that help demonstrate your value to the organisation. This can be anything from printed materials to an actual presentation. It’s especially helpful if you’re multi-skilled and contribute in various areas, because this is highly likely to mean that the company will incur more cost in replacing you with a few individuals with specific skill sets.

What you’re trying to drive across here is your contribution to your firm, and the message that “oh my God, I hope you don’t leave because it will be a nightmare”.

  1. Don’t show your hand first

One of the cardinal rules of negotiation is that you should never be the first to name a number. That question will pop up for sure and you’d be pressured to give a number. If your efforts to deflect this discussion isn’t successful, give a narrow-ish range which you’d be happy with if they offer the lowest of that range; or deflect this with any of the below phrases temporarily:

  1. Think about your total package

It’s often that politics or organisational structure that comes in the way too. It could be that your boss values your contribution, but is unable to promote you or budge on salary due to budget limits set by others, arbitrary standardisation etc. Then, the next question you’ve to ask is: “Are there any other compensation elements that we can discuss?”

By being collaborative in that way, understanding their position (they want to keep you happy too if they know your value add to the firm), they are more inclined to help you out in improving your offer by being more flexible on these aspects:

  • A pay rise (if your salary is frozen sometimes non pensionable allowances can be agreed which keep things below the radar)
  • An increased holiday entitlement
  • An increased notice period (makes you look more senior & useful if you are made redundant or want a nice stretch gardening leave before the next job)
  • Extra training/educational opportunities (go prepared with specific suggestions and costs)
  • Improvement in bonus structure (cash and/or shares)
  • Any other perks/benefits – existing or suggested by you
  • Flexible working
  • Agreement about what you need to do to get promoted

Know what you would consider aside from a promotion here. If you improve your overall package you have been successful.

  1. Silence is Golden

People are naturally conditioned to fill silences. When being made an offer, don’t feel compelled to answer right away. Remember: you’re in control of the conversation. Let any offers breathe and often times, you’ll be on the offensive without saying a word as the other party rushes to fill the awkward silence 😉

  1. Good follow up could be the deal breaker

Not many managers will be able to make a decision on the spot. Particularly if you sprung the conversation on them. Leave the meeting being clear about what happens next and who they need to speak to, to make something happen. Do a follow up in writing and keep pushing. Try and agree a date when they will get back to you with a response. If your manager can’t make the decision, go and see the person that can.  Don’t leave it too long – a few weeks at most.  Remember if you are sitting on an offer, a counter offer can take a matter of hours.

GOOD LUCK!!  Remember that companies regularly congratulate themselves on hiring and retaining good productive people on less than the external market rate. No company voluntarily pushes staff costs up (in fact many are charged with doing the opposite) so take charge of your career and make sure you are on a package that you feel happy about.