- Salary negotiation primarily helps a job seeker or employee obtain a salary that's equal to or close to market value or the median salary for that industry: Median salary is the middle value of a salary range for a particular industry, listed in ascending or descending order. If a job seeker receives an offer that's less than the market value, salary negotiation may increase the compensation package. At the same time, salary negotiation is helpful for employers to provide potential job seekers with reasonable compensation packages based on the company's cost structure.
- New jobs may come with unforeseen expenses. These additional costs affect take-home salary significantly. For instance, if a job requires relocation, it may incur additional expenses such as new apartment deposits, increased state or local taxes, and transportation costs. Likewise, a new job may require increased insurance premiums or higher retirement contributions. Salary negotiation helps job seekers possibly cover unforeseen costs of a new job.
- Receiving a compensation package obtained through salary negotiation increases the duration of service in a company. Longevity helps an employee avoid the "job hopper" label and paves a successful career path. Amicable compensation settlement at the beginning of a career provides a healthy employer-employee relationship throughout the employee's tenure. Longevity of employees helps employers, minimizing hiring costs considerably.
- Salary negotiation, if skillfully managed, is the best way to receive market value and create bright career prospects. A compensation package often serves as an informal gauge for the skills and expertise of an employee. Hence, it's critical for job seekers to avoid the underpaid trap to remain competitive in the market. Because the process of salary negotiation involves thorough research to collect supportive data, it assists job seekers in making a rational decision when accepting job offers.
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