Tips to Negotiate for a Remuneration Package for Employees
Remuneration packages have existed for quite a while. However, studies say that the main reason why people quit their jobs is due to their pay and remuneration. Not all employers take this into account, but offering good remuneration packages is a key element in employee retention and new talent attraction.
Remuneration packages can include different things as each company is different. However, the definition remains the same, and getting to know what it is all about and how it can benefit you is a great step towards learning how to negotiate one.
What is a Remuneration Package?
Now, let’s talk about the remuneration package’s meaning. This term refers to the compensation a company is offering to their employees in exchange for their services. The most basic item in this list is the salary, but the majority of organizations also include non-cash incentives.
A good remuneration package can become one of the most vital employee perks to attract talents.
The remuneration package definition is universal, but all companies have offered different benefits to their employees based on their revenue. For instance, the employee perks for small businesses greatly differentiate from what a larger enterprise can offer for the workforce.
UK Statistics say that 40% of millennials consider that a remuneration package has more importance than a salary. As times have changed, it is quite important for businesses to take into account offering more than just a basic salary to their employees if they want to attract talented candidates for their business.
Remuneration Package Examples
There are tons of employee perks that a company can offer. Some of them may include an employee purchase program, for instance.
Still, we can categorize the types of remuneration into two categories: direct and indirect.
Direct remuneration refers to the financial compensation the worker receives at the company. Here we include the basic salary as well as bonuses and commissions, for instance. If you’d like an example, waiters have a basic salary, but they make more money thanks to the customer tips.
This category serves as an incentive to increase the employee’s motivation to improve their work. Of course, the example mentioned above is just one of many ways a direct remuneration can manifest itself. It could also happen in other scenarios, such as when the employee is promoted to a higher role in the organization chart and is rewarded with a bonus, a raise, or both.
Indirect remuneration isn’t solely about financial compensation. It also comprehends other benefits, such as flexible work hours or transit allowances. We could also include perks for work from home here, especially since the current context obligates most companies to use a hybrid work model where people alternate between in-person attendance and working from home.
Indirect remuneration is deeply linked to positive company culture practices. They help the employer create a healthy environment for everyone while also allowing employees to find the best way of achieving the so-called work-life balance.
Some benefits related to indirect remuneration include paid time off or life insurance, for instance.
How Do You Negotiate a Remuneration Package?
You know the basic information about remuneration packages. Your potential employer may state what they’re offering during the interview or upfront in the job post. Either way, negotiating for better benefits is not impossible — otherwise, many people out there wouldn’t have the positions they have nowadays.
Here we mention a few tips you can use to negotiate a total remuneration package with your potential employer.
Do your research
When you’re interested in acquiring new opportunities, it is not worth it to jump blindly and take the first opportunity you have in mind just because you are desperate or in a rush. It is important to know how valuable your expertise is. Hence, you can start by researching the average salary of people working in the positions you’re interested in. Is it higher or below the average?
Get to know all the variables, and you will be able to know how much you’re working in the current industry.
Sometimes it is not possible to negotiate
When a company shows interest in hiring you, they will talk to you about the benefits they can offer to you. However, do not expect them to tell you that “you can negotiate,” that’s something you should do as the hiring manager probably won’t even mention it.
There are two possible scenarios:
- The hiring manager tells you that the company is up to negotiating the benefits,
- Or they could tell you that it is not possible to do so at the moment.
If you end up in the second situation, what’s best is to ask them again whether the opportunity to negotiate will be available in the future or not. If the answer is negative, you can start evaluating if the proposal is worth it and goes in accordance with your expectations.
Sometimes, a company will not offer you monetary benefits but will offer you indirect perks that you may find useful. For instance, they may offer you a flexible schedule or even the opportunity of working from home.
Take your time to evaluate the offer
This step is important, especially if you’re applying for multiple jobs or several companies are interested in hiring your services. You should take your time to analyze the different offers you’ve received, this way, you will get to know the most viable option, and thus, if it is a good job opportunity or not.
Even if the salary is good, accepting a job offer just because y they’re paying you good revenue or a bit more than your previous employer is not worth it. You should always keep in mind how much you’re worth. Maybe they’re paying you a good salary, but the job is too time-consuming and doesn’t leave you with too much room for other everyday activities.
It’s also highly recommended to ask the company for their annual benefit statement, but not everyone has such documentation available. If they have it, you’ll be able to see how much your remuneration package is worth based on the dollar value for each benefit.
Last but not least, please always remember to obtain your offer in a written document. Assure that everything you’ve agreed to with the employer is clearly described in the offer letter.