Am I Wrong to Think This Way? Negotiating a Wage Offer

fishandchipss on 17/11/2017 - 15:16
Last edited 17/11/2017 - 15:22 by 1 other user

Before you start reading, I thank you for your valuable time. I don't have many friends to consult on this and since most of them are still studying, I haven't got someone knowledgeable to ask. I hope someone out there who has been in the same situation can shed me some light. Thank you!

So recently, I have finished my apprenticeship and ready to embark on my full time career at the same company I am with currently. The boss has offered a wage which I reckon is considered to be on the low side of this industry according to statistics. I have not accepted the wage offer.

Basically, what I have in mind is.. if I were to request for a higher pay, since taxes are high, I would essentially only be having that few extra dollars if I were to accept my boss's offer. Is that correct? My boss is a very particular person. Requesting and offered wage per hour difference is about $5. I honestly don't think I will want to burn bridges over that small difference, but I feel unappreciated if I were to accept it too. Stress and expectations is high at work, overtime is often unpaid and jobs are not evenly spread out. I don't like the management, it's a small company but I like the industry.

I don't want to let my boss think that I've overestimated myself but I honestly feel that I am better than many others in my industry. I have already given my word to accept the job but have not yet discussed about the wage beforehand, I know I'm stupid. I was just thrilled that there was a job lined up for me after. Should I find another job to start afresh?

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  dcep on 17/11/2017 - 15:20

  +14

  take the job and find another at the same time

  don't be stupid and think you'll land a job easily after quitting this one

  what makes you think your boss won't just hire another apprentice to replace you, instead of paying you more ?

  • 

    GG57 on 17/11/2017 - 15:23

    +1

    I agree, take the job and look around at the same time for something with a better job culture etc.
    As you state, a % of any $ increase is taken in tax. Life is not all about the money.
    Good luck.

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    Seraphin7 on 17/11/2017 - 15:33

    +3

    Agree. This is the correct strategy. Take the job, get genuine post-apprenticeship experience and take it from there. A year or so from now you'll be in a far better position to negotiate, especially with potential employers.

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    fishandchipss on 17/11/2017 - 15:37

    +1

    i did have the same thought and this uncertainty has been giving me stress for a period of time. The boss will always say when a better candidate comes by, or say like there's not enough overturn to sustain everyone's wages, it feels like I'm being asked to quit, sometimes.
    I guess I should just accept the current offer and work for a couple more months and quit. do you reckon I should negotiate the wage still?

  • 

    garetz on 17/11/2017 - 17:55

    +1

    It is much easier to find a new job when you are currently employed, take the job, then move on in 3-6 months.

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  djsweet on 17/11/2017 - 15:41

  +1

  Accept the wage and take the job. Look for another job while you are working.
  The experience will make it easier to get another job and you will still have money coming in while you are job hunting.

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  OpenHand on 17/11/2017 - 15:43

  +3

  Assuming a full time job, $5 per hour more is $10,000 per year before tax. Depending on your base salary that is pretty significant even after tax.

  Salary band: $37,001 – $87,000
  Tax: $3,572 plus 32.5c for each $1 over $37,000
  Effective tax rate: 9.65 – 22.78%

  If you're sitting between 37-87k, that extra $10,000 will equal around $6750 per year after tax, assuming no deductions. Though your actual tax rate is still fairly low, between 9.65 - 22.78% since the first $37k is taxed at a lower rate.

  From what I can tell, you've already accepted the job but have returned your wage offer with a higher one? I don't think that's such a bad position to be in. Your boss may come back with a lower offer or stick to the original one. Or he may accept it - assuming you did okay on your apprenticeship, he has already got some value from you without spending too much.

  In general, I would say take the negotiation for what it is, take the job if it's bearable, and keep an eye open for other opportunities if you aren't 100% satisfied. The opportunity cost of turning down the job now is quite high though - stable work is a useful thing.

  • 

    fishandchipss on 17/11/2017 - 17:09

    Thanks for your time in calculating those numbers. it is quite a significant amount. I think I have decided to just take on the job and search around.

  • 

    foxmulder on 18/11/2017 - 09:28

    Don't forget company also pay super of around 10% and taxed at much lower rate than your ordinary income.

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  dazweeja on 17/11/2017 - 15:48

  +3

  Take the job but say that you'd like a performance review in 6 months, whihc would be an opportunity to discuss whether your wage is appropriate. Even though you've finished your apprenticeship, you don't really have any runs on the board so no leverage. Also, if you perform well he'll be able to see your value to the company. I think it would show initiative and that you're taking your career with the company seriously. I don't know about your work but the places I have worked, management are happy to assist with career progression because it keeps valued employees at the company. Even if you leave after then, 6 months of real world experience in any job is invaluable when looking for the next one.

  As others have said, you can always look around at the same time.

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  enigma48 on 17/11/2017 - 16:04

  +5

  Good on you for asking. This is easy on paper, hard in person. I'm no master but I've learned a few things.

  $5/hr is $10,000/year. That's significant: but is it a fair price for your effort?

  Now, firstly: don't worry about taxes. Unless you're comparing jobs with salary packaging vs without, you'll pay the same tax between either company. If your goal is to get as much as you can (which isn't selfish; it's business) then you're basically looking at A) what you offer the company, and B) what others get paid.

  Before we start: the company is used to paying you peanuts. You're an apprentice. They're not going to pay you the market rate if they can avoid it, any more than you want to pay full price for an iPhone X here. In my experience, very few people successfully negotiate for significant pay rises - even if earned (e.g. you've finished a new qualification and can do more work).

  You've got the right idea: you researched industry rates. In reality: the research doesn't matter! You walk in saying "thank you for the apprenticeship, I learned a lot and really appreciate it. I've spoken with colleagues and researched industry wages for fully qualified junior staff, and entry-level jobs appear to pay between X and Y." (Research doesn't matter because they're just going so argue lower based on their "research" - don't bother arguing over sources/reliability)

  If they disagree but you like your job, a good next step is to ask: What would it take to achieve the range you're asking? Do they just want you to get 6 months more experience? Do you need to lead a team for a bit? Do some solo jobs? Finish another small course? It might be small and reasonable: and you're putting the ball in their court.

  They might want to offer more but can't (market uncertainty, poor earnings, not enough forecast work). If it's close, you can accept lower than what you want but add some conditions:
  * Revisit salary after 6 months (works great if they say "we give juniors another big raise NEXT year…" or "after you finish X training, you say ok - but needs to be in 6 months instead.)
  * Negotiate for non-salary benefits (1 day working from home to save you some commute time, extra leave for a vacation you're considering, you ask them to pay for some pricey training, all overtime is paid, etc.)

  Accepting the job without discussion conditions takes some of your power away. But it's not the end of the world: I don't feel like it's unreasonable to say you were flattered about the job offer and should have discussed condition and remuneration.

  This is business - you're not burning bridges at all (I know it feels like it though). You think you're worth say 60-70k/year (hopefully this is reasonable). In a business transaction between equals, you walk in asking for $65-70k given your qualifications, market rate, experience working with the company already (low training costs). They say they're willing to offer $60k. You settle on $65k with the understanding of a review in 6 months and that a positive review means a bump to $70k.

  Of course it's not all about the money. And you haven't given your word: a contract/commitment means consideration on both sides, and they haven't given you anything to consider. You've expressed keen interest but you need to see the contract.

  Even if they low-ball you, it may be worth considering: most industries have no problems finding entry-level staff. If you can't find another job ASAP, it may be worth accepting (particularly if they promise to pay you to do extra training) - it's much easier to find a job with some experience.

  Let us know how you go - this stuff isn't easy.a

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    fishandchipss on 17/11/2017 - 17:14

    you are a legend, that was some reassuring advice that I really needed. I will defo let you know, maybe in a couple of months or so. haha. I know it's not about the money. But the only reason why people are turning up for work is so that we can make ends meet. more so, i feel the wage remuneration as the way how the boss values me as an employee… so now im probably still a rookie even though the apprenticeship was for over a year ):

    • 

      wordplay on 17/11/2017 - 18:21

      Well I don't know what trade you are in, but should be glad your apprenticeship was only a year, most have to do 4 years.

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  Donaldhump on 17/11/2017 - 20:05

  Take it from me, not working and looking sucks. Can always ask about extra money, they may meet you half way. Either way the money you earn is negligible to what you will make when u have five years exp etc.

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  Hardlyworkin on 19/11/2017 - 00:42

  If they aren't too keen on paying overtime, ask for time in lieu if you don't think the current system is fair on you. An extra day off could be used towards looking for a new job.