How to Negotiate a Higher Salary at work - The Reality

Salary Negotiation

Ah the pursuit of high salaries. Here at The Six-figure Engineer we define a high salary in the United Kingdom as one that is above £100k (£68.6k after tax). Though, I am not out of touch, for most people, receiving a £50k (£39.5k after tax) salary is considered high (especially the further up North you travel outside of London). Over the years, high inflation of house prices, rent, food, and very high income taxes, coupled with extremely low annual wage growth has totally changed my perspective of what a good salary is. To achieve the coveted 6-figure goal (which is not actually 6 figures when you consider income tax), you'll need to strategically approach your career (this does not happen by just doing a good job). Engineers, particularly those within specialist roles across Mechanical, Electrical, and Civil Engineering, often find themselves in a state of complete fear when it comes to negotiating a raise. Some engineering companies offer staff a standard annual pay raise of 5%, which for many more companies is actually 3%.

If you had a £50,000 salary, a 3% annual raise would take you nearly 16 years to get to just £80,000 (£57k after tax) per year. 16 years from now an extra £30,000 (£17.4k after tax) per year before taxes is meaningless in terms of impact to a persons life. This is more like a participation prize in today's economy. It's time to break the cycle and take charge of your own financial success. Here's a comprehensive guide on how to negotiate a higher salary as an engineer. But remember, there can be no demands without service, risk, or expertise. Here is a guide on how to negotiate a higher salary at your job.

1. Start With The Right Company!

I know... It seems obvious right, but a business has a budget and your Department / Team has just a small piece of that budget to work with. The best thing you can do for financial success in your career, is to just get hired by a company that has the best salary for you to start with. There are opportunities for this no-matter your years of experience, however, you will most likely have some serious competition for these roles. Unless of course, the pay is high because of the lack of options the company has to garner competition (In which case, you will be possessing skills and experiences that are difficult to find, yet crucial to a businesses operations).

If we were in finance we would be talking about getting roles with companies like Jane Street, Millenium, Optiver for Quant Trader roles where entry salaries straight from University are well into the 6 figures range in London. In Traditional Engineering roles, your key to finding something comparable to this at entry level is going to be Networking AND Incredible Talent. Believe me, it does happen, but you would not be just any student, you would be the type of person that was winning competitions, publishing research in something that very few people are doing (that companies are racing to be the first to discover, invent, or solve), going to business / engineering events and making contacts with the right people.

2. Understand Your Expertise

For most of us, we will need to strategically work our way up to the top from being average people starting with average know-how. So picture this, you have a job right now at a company that you like and want to consider staying with but you need more money to help you build your personal life faster.

Before entering any negotiation, it is crucial to understand your true worth. Research industry standards, salary benchmarks, and the specific demands of your role. Highlight your accomplishments, skills, and unique contributions that set you apart. Confidence in your abilities will form the foundation of a successful negotiation. Many people tend to err on the side of playing down their knowledge and expeirences. Don't do that. You think you need to be humble but nobody cares, this is a business negotiation, not a likability contest. Although having your manager on your side definitely helps.

If you are an experienced engineer already, having gained expertise in a particular specialism, your options for obtaining a 6 figure salary are more frequent and entirely up to you being willing to take on real risks to your stability or versatility to do new projects in new places. It is often the case (sadly) with seasoned engineers, that never planned for reaching high salaries on purpose throughout their careers, that their salary is very low compared to what they could be on. It is for this reason that I do not advise holding yourself back based on the limit someone more seasoned than yourself put on themselves.

So here are some questions to understand your expertise:

• Are they struggling to hire candidates to fill your team?

• Are other companies posting job adverts for the same role at higher salaries?

• Have you stopped learning new things in your role and feel undervalued?
  

2. Offer your Service

Timing can significantly impact the outcome of your salary negotiation. Rather than passively waiting for the annual review, be proactive. Consider negotiating when you have completed a successful project, taken on additional responsibilities, or achieved significant milestones. This demonstrates your value and positions you favorably for a salary increase.

This option is great for building company loyalty and creating visibility over your development to senior management. To offer your services to the company you are already at, arrange a meeting with the operations or delivery manager to plan a route to the salary and job title that you want to get to. The great thing about this is you can have a behind the scenes chat with your manager about what the company will pay more for! You can:

• Create a predictable timeline,

• Understand the expertise that you need to reach certain specialisms or titles that pay more.

• Accelerate your career progression as a whole, and maybe even be more likely to be recommended for director roles!
  

3. Take on more risk

It is possible to negotiate a different type of employment with your employer, where you take risks off of them and transfer them to yourself in exchange for higher rates of pay. In order for this to work you will need to have expertise in a specialism that the company wants to maintain but is not exactly core business.

The benefits to the company include:

• Specialised workers and improved focus on core business activities.

• Reduced Costs from expenses such as pensions, paid leave, health insurance, and employer taxes.

• Reduced employee professional development burden.

In return, the benefit to you is the higher rate of pay, increased flexibility regarding days off, and control over your financial future, Though remember, this would mean taking on the risks of your own employment and professional development, hence the higher rate of pay.

4. Get Another Offer!

Nothing convinces a business that you should be on more money like finding another business that is already offering you more money! With this option, you will truly find out if you are worth more money. I advise you to not disclose that you are exploring other job opportunities to anybody before you secure an actual offer from another business. Spruce up your CV using my comprehensive guide here, and put your best foot forward during interviews by using my interview-winning guide here.

Once you have secured a higher offer (which should be at least £10k more in my opinion to make some kind of impact to your life), schedule a meeting with your operations / delivery manager and respectfully inform them that you have received a better offer from another opportunity. Give them the opportunity to give you a counter offer though! You don't want to march in there telling them you are leaving as they will probably say goodbye. Give them the chance to tell you they would like you to stay, give them a chance to discuss a counter offer, if they cannot match the offer you received... just accept the new job opportunity and move on. If they can match the offer, consider staying if you have a good relationship with the manager and team.

5. Consider Benefits Beyond Salary

Unless the company you are at is so small you get to talk to the CEO, remember that your operations manager / Delivery Manger does not have control of what your salary can be up to a certain extent. They are given a budget for resources (which includes you), and they have targets they need to reach themselves attached to those budgets. I guess what I am saying is... If you really love working for that company and you don't want to leave but you need something that could help you out financially, consider exploring the benefits they offer. Some good benefits many companies offer are:

• Good Private Pensions with high employer contributions.

• Favourable Stock Options for employees that could pay dividends.

• Salary sacrifice schemes to get that car you really want before taxes.

• Financial support for healthcare and more.

• Remote working, which can save you hundreds or low thousands of pounds (£) per year in travel expenses and the costs of eating out. This also allows you to look after kids, other dependents, and live wherever you want whilst staying in the same job!

• Flexible working hours, so that you can take your kids to school or attend private matters whenever you need to, with the flexibility to make those hours up on other days.

• Professional development opportunities, to seek fulfilment in your career.

• Additional vacation days that can give you more breathing time each year.
  

Be open to exploring alternative forms of compensation that align with your priorities. I know we all want more money but depending on your circumstances in family life, your willingness to serve more, take on more risks, or gain expertise in sought after roles, maybe £100k is not possible, but perhaps £65k with great work-life balance is!

Handle Counteroffers with Grace:

In some cases, your employer may counter your salary negotiation with a different offer. Approach counteroffers with an open mind and evaluate them carefully. If the proposed offer falls short of your expectations, diplomatically express your gratitude for the offer and reiterate your reasons for seeking a higher salary based on market research and your contributions.

Conclusion

Negotiating a higher salary as an engineer requires a blend of confidence, preparation, and strategic communication. By knowing your value, timing your negotiations effectively, and presenting a compelling case, you can position yourself for a successful salary increase. Remember that advocating for fair compensation is not only crucial for your financial well-being but also sets a precedent for future negotiations. Empower yourself with the tools and knowledge needed to secure the salary you deserve.

** Disclaimer: The opinions expressed by the author of this post, on this blog and community are solely his own and do not reflect the views of any past, present, or future employers or any other organisations with which he is associated. The content here is provided for informational purposes only and is not intended as professional advice. **