How do I negotiate a salary with HR especially when they say hike could not be more than 30%?

By asking this question you are making the HR cordinator confused , in my experience I have seen that fintech corporates these days are outsourcing the HR function.

  HR Payroll   Apr 23, 2024   112  Add to Reading List

Pardon me for such a long answer but I will give you definative figures and scenarios which will give you an idea on how to negotiate. I am NOT going to tell you how to convince them about your skills and value because that is something which varies from person to person. I assume if they are offering you a job they already have an idea about your skills and comptencies.

To begin with you can ask them that when they say beyond 30% hike is not possible what exactly are the referring to ? The CTC or Gross Salary ?

By asking this question you are making the HR cordinator confused , in my experience I have seen that fintech corporates these days are outsourcing the HR function. 9 out of 10 times these newbies don’t follow the rule of thumb and thus you might be asked to wait for another phone call wherein a sesoned guy from HR will take over.

10/10 times the hike is offered on the CTC i.e. cost to the company wherein these HR guys really play smart. The Employer Contribution of PF which is 12–12.5% of basic salary is added in to the CTC , the Mediclaim of 4 dight amount . The variable pay which could be anywhere between whopping 10%–25% in service industry and this is typically paid quarterly or annualy and subject to be taxed. This one is also added to your CTC.

Another header added in CTC is Gratuity which is actually calculated with following formula

Last drawn salary X 15/26 X years of service

Assuming that these days in IT sector nobody stays beyond 3 years or so you will never get this amount since this is usually payed after completing 6 years in the company payroll.

Starting April 2018 , you won’t be eligible for monthly medical bill of 1250 which accounts to yearly 15000 so even this doesn’t matters.

Other than this the companies usally pay 1500/- per month as telephone allowance and up to 3600 worth the food vouchers , another 4500/- is paid towards transport allowance.

So summing up altogether the variable pay could be 0 or full , the banks or lenders do not consider variable component as part of your salary.

Gratuity is something you will only get if you complete 5 years in the organization which is quite rare phenomenon these days.

Mediclaim premium is part of your CTC and the cover is paltry amount of just 3 lacs which is insufficient incase you need medical treatment. Better buy a mediclaim for your family by yourself.

Thus you can ask them to provide a figure that how much hike they can offer on basic salary , all the other components of salary are calculated on basic salary only. These HRs and recruitment firms are cunning so they don’t disclose that . Therefore at the time of interview itself tell them when they ask about your expectations that you need so and so % of hike in your CTC , if they agree (which they agree on 8/10 times) go ahead.

After interview wait for them to provide salary breakup details and compare it with your present salary structure by looking at your pay slip.

The rule of game is always ask them to hike the Basic Salary by 10%-12% atleast , this would account for around 30–45% hike in your CTC. Getting an overall 30–45% hike is not bad by any standards considering the state of economy and job market.

Since in the appraisal cycle these company give single digit hike (usually 6–7%) on CTC which is offsetted by the inflation ( hovers around 6–7.5%) , it is important that you research and negotiate with potential employers well in advance and get a better package for yourself because once you are in there are various factors apart from your performance and contribution which are considered while appraising you.