How to Write a Compensation Proposal

Whether you have been with a company for many years or are looking to start a new job, negotiating your compensation is a necessary part of the workplace dynamic. Most employers expect you to negotiate your salary, whether verbally or in writing. Not doing so could pass you off as complacent or lacking in basic business skills. Writing a compensation proposal allows you to articulate your expectations for the job. Here’s how to get started:

Familiarize yourself with salary trends

Even though you may already have a desired figure in mind, it is important to do your research on industry salary ranges. Find out how much others in your role and in your industry receive in terms of salaries, bonuses and benefits. If you are asking for a salary rise, you want to gather information about the company’s recent revenue performance as well as the compensation you received following your previous salary review. If the company has been performing well, you have a better chance of negotiating a better compensation.

State your desired expectations

Your proposal should clearly spell out what you expect from your prospective or current employer. Whether you are looking for better compensation in terms of salary increase, more benefits, higher sales commissions, or a boost in annual and performance bonuses make this absolutely clear. Your proposal will be more valuable if you focus on just one or two elements, for example, a salary increase or an increase in performance bonuses, instead of making too many requests.

Use numbers to highlight your value

You need to justify your request for better compensation. Why should your employer increase your salary, sales commissions or bonuses? Numbers are a persuasive way to support your request—mention the amount of money you have earned for the company, how much you have helped the company save, the number of successful projects you have led and how these have contributed to the bottom line. If you are a prospective employee, you could mention your past accomplishments and specifically state the cost-saving and revenue-increasing value you expect to bring to the company.

Demonstrate your cumulative experience

Employers are always keen to retain or acquire experienced employees. As such, in addition to using numbers to support your request, your compensation proposal must highlight your professional achievements. Mention your advanced educational background and the industry experience that you have acquired within the organization or from working in another company.

Ask for alternative benefits

Sometimes, the employer may be unable to offer your proposed compensation figure. If you do not want to completely get out of the pool, you could compromise and ask for alternative forms of compensation. This could entail asking the employer to pay for your education, requesting more paid vacation time, proposing telecommuting and other flexible working arrangements, childcare, pension plans, sick days, health insurance, among other non-cash benefits that may be valuable to you.

Propose additional contingencies

Say you have only stayed in a job for 3 years, or you have been out of work for a while. Current or prospective employers will likely turn down your compensation proposal unless it is within their budget. If you are keen on pursuing the position, you could accept the initial offer, but state in your proposal that the employer must commit to increase your salary after six months if you attain specific performance targets.

Many negotiators make the mistake of not gathering adequate data to support their request for a certain compensation amount. Having relevant information will keep you from asking for a low compensation against your interests, or an unreasonably high amount that will elicit a hostile reaction.


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