People change job or organization for a number of reasons. Expanding the horizon and exposure, issues with the current job, moving to a new place, family commitment, so on and so forth. But, perhaps the most popular reason is getting a significant increase in the salary. Why not, since your last annual salary increment barely hit 8%? Further, the living cost has been steadily increasing with the recent price hike in petrol, tolls, household groceries, parking and many more and 8% does not seem to cut it.
However, certain people have this problem on determining their expected salary when they make their move in the job market. They are uncertain on how much they are worth in the new company and in the new job.
How do you determine your expected salary? Well, there’s no direct or straight forward calculation to come out with answer, but here are the steps you can follow.
1. The rule of thumb
There is this rule of thumb that says that you can use a 30%-35% increment in deciding your expected salary. While the case is not always entirely true, this is quite a reasonable range for you to start with. Still, it is, however safe saying that this rule of thumb works half of the time while the other half, the rule becomes rubbish. Which leads to the next point below.
2. Your type of move
Are you making significant changes in terms of job roles and responsibilities? For example, you are working as a call center customer service officer. You are familiar with the greetings, attending phone inquiries, hearing people shouting at you over the phone, logging on people’s problems, escalating cases to supervisor and so on. Now you want to take up a job as a front line customer service executive. While the job titles look similar, the two requires different set of skills.
While you can show your potential in taking up the new role during your interview, you are not yet a proven front line customer service executive. As such, the employer may not be willing to accommodate too high of a salary expectation. Therefore, you probably need to settle with a slightly lower expected salary.
3. Your reason to move
Why are you looking for job now? Are you having a steady career with your current job and organization now? If not how desperate are you to leave the current job? Are you in the negotiation table because you’re being head hunted? Are you prepared to pass the job offer and continue working with your company instead?
If you’re either being head hunted, or are not desperate to leave your company, then this is where you can jual mahal. After all, you don’t have anything to lose if they can’t meet your expected salary. You can move on and continue doing your job with no qualm. People are head hunted because of the skills they have, which are not easily available in the market. Further, these kind of people are those who are extremely good at their job, enjoy what they are doing and having a prosperous career in their organization. Therefore, to lure someone leaving his comfortable job will take something extra, which can mean a super dupe salary and remuneration offer. So, aim for the Everest.
Let’s say you’re working as an Account Executive based in Kemaman, Terengganu. At RM1200 salary per month, you can live comfortably there, considering a relatively low cost of living. Using the 30% increment rule, a new salary to move to a new company means RM1560. A handsome increment indeed. However, if you were to move to a new job in Kuala Lumpur and doing a similar job with a salary RM1560, certainly your survival ability is to be tested to the limit. You probably will need to sell off your new Proton Gen2 and settle for a motorbike instead. And we have not even started with the apartment rent.
So again here, the 30% rule is out of the picture. Perhaps, 60% or even doubling your salary would be suitable, depending on circumstances.