What should be the approach to negotiate a salary raise at the end of the contract?

Question

I joined my current company as a Lead Developer for a team 7 in April/2017. They offered me a 1-year contract which will be ending in two months from now. the contract is for a fixed salary per month.

I had my first meeting for contract renewal with my manager. We agreed on the following things

1. We discussed my performance and how did my manager felt about it. to give a short overview, He felt I performed beyond his expectation, the sense of ownership I had for the team and product help us to achieve our deliverables.

2. Next contract duration, which should be indefinite.

3. What should be my base salary for the new contract? I asked for a raise of 12-14 % a year to which we came to a figure of 10%.

   After the meeting, I sent him an email mentioning all the points that we discussed and they are parked now for time take this up with finance and hr to get it approved.

Today my manager called me and said we have to discuss this with our Head of the department. I was fine with it.

To my surprise, he said that the raise of the salary could be reduced 1-2%. Also, it will not be effective from the start date of the contract, but it will be effective from January/2020.

I expressed him that I will be facing a loss of salary for the next 8 months till the time new salary becomes effective and also the percentage is quite less to what we agreed. To this, he said that HR is not agreeing for the raise to be effective from the start of the contract and the percentage is too high.

I do not wish to leave the company at the same time I do not want to work for a salary that will not keep me motivated.

How should I approach the discussion where I do not want to be looked like a person who will be leaving if now given what is requesting. Also Is there some tools that I can use to show what is my market value based on the years of experience and skills.

Answer 1

As a Dutchman, who has job hopped a fair amount the past few years (I'm hoping the company I started at this month is one for a quite a few years), I can say with absolute confidence: developers are in incredible high demand.

If you're as good as you think you are, you should find employment elsewhere where you're compensated for your worth.

Keep in mind that you're compensation at your current company can/could also be based on performance of your collegues (ie, how do you compare to them and what do they get for their work). Not that that is necessarily fair in an employee's eyes. ;)

However, if you've done a performance review, and to quote:

He felt I performed beyond his expectation, the sense of ownership I had for the team and product help us to achieve our deliverables

Than a 10 - 20% raise is not outside of norms here. Especially when you're going for the full-time indefinite contract (for the non-Dutch: that's "a thing" here ;) ).

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What should be my base salary for the new contract?

Really hard to say without more info. You say:

• Lead developer
• Performance confirmed by manager as above & beyond expectations

If you add langauges & frameworks your familiar with I could give you a more accurate guess. Same with approximate location in The Netherlands. However, going from knowledge, info of GoT "Wat verdient de ICT'er / GoT'er?" (Dutch for "What earns the IT guy / Tweaker") and assuming you do:

• Back-end development
• Use PHP with popular framework (ie Symfony, Zend Framework, Yii, Kohana, Code Igniter)
• Are skilled with usage of Git, Docker, xdebug, PhpUnit
• Are familiar with front-end tools (ie, know how to turn 'em on and let 'em do their stuff), such as Yarn, NPM and can write Sass and use jQuery
• Know that you don't know something
• Ask for help with the above instead of spending a day slamming your head against a wall
• Live & work in the "Randstad" (Triangle of Amsterdam, Utrecht, Den Haag) (easily take 20% off of the below if you don't)

Then your salary should be in the range of 4 to 6k a month, plus secondary stuff (13th month, kilometer compensation (up to E250,- p/m), pension (minimum 50/50), high amount of days off (+/- 28 - 30), flexible work hours, possibly work from home certain days, etc etc)

If you do X, add/subtract Y - (guestimates!) - employer dependent, still assuming senior/lead developer/team lead/high performing individual with good references ;) :

• C# -> + 10-20%
• Java -> + 5 - 15%
• Android -> + 10%

• iOS -> about same

• Full-stack -> + 10-20%

• Front-end -> - 10-20%
• Full-stack JS based -> + 10%

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Oh, not sure where to fit this in. But all of the above assumes that the company you work at has a business model centered around something IT related. If you do this for your local butcher shop, well, you're out of luck :p

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Damn, I should write job openings :-p

Hope that helped you out. Not sure if and how this could/would help others, but it was fun to write it out and have a wee read through some material and the Tweakers thread (very informative!). Also had a look at job openings on the popular sites, such as indeed, vacatures.nl, it-banen.nl and the less popular (sorry SE), such as SO Jobs and LinkedIn (less popular for tech jobs!)

Answer 2

You have to be prepared to walk, or you've got no basis on which to negotiate. The "I'll stay anyway, but I'll be more motivated and better performing with more money" line just doesn't work in practice. (10% is also a significant year on year raise, so I'd expect you to have to negotiate hard for this.)

If you say "I want 10% or I'm walking", and you really want / need to stay, you're bluffing. Some people do that, sure. But it's a heck of a risky move, and I've seen it play out more times against the employee than in favour.

If you say "I want 10% but don't worry I won't leave whatever you offer me", or words to that effect, then they haven't really got any incentive to offer you anything above your current salary.

Anything you think might be "in between" those two camps, in my experience, falls into the latter one.