6 Tips for Negotiating a Pay Raise
It’s ironic that we’re never taught about negotiations in classes. I suppose it was something where actual practice is needed, but it certainly helps to have some guidelines or emphasis on it (not only until we started our careers!).
Just like interviewing, networking, or just knowing what to do to get the promotion, or just becoming more awesome at your job, negotiations are part and parcel of life, especially at work. Practicing and learning more about it earlier always never hurts.
That said, it’s so easy to take the easy way out and avoid the uncomfortable conversation when asking for a raise. Like it or not, it’s something you’ve to get comfortable of as no one is going to voluntarily offer and match your value to the salary you receive at all times – except yourself. This is one of many things you need to do in managing your career and here’s a few useful tips to help you through that (it’s can be quite a fun process really)!
#1. It’s not you vs. them
Sometimes it’s easy to fall into the trap in thinking that negotiation is a war, it’s “you vs. them”. Changing this mindset is crucial to improve your chances for a successful outcome. You need to view the negotiation as a discussion and a partnership instead. By making it less personal, you’d be in a “friendly but assertive mindset”, trying to work things out for the benefit of both parties. It’s something you have to do for yourself in planning your financial future and career.
#2. Know how much you’re worth to your employer
Of course, you need to enter a salary negotiation prepared. It’s hard not to get emotional, but you need to treat it as if it’s a pitch for a project, for your services. Most importantly, you need to have a good idea of how much you’re worth to your employer, and there are many ways to do that:
- Do a thorough search on LinkedIn Jobs for similar roles to get a benchmark salary range for your role. This is a simple gauge of your salary at minimum.
- If you can, start interviewing externally for a job you’d like as if you’re planning to leave your current role. Although more tedious, this has various benefits of improving your interviewing skills, and getting an actual job offer gives you a proper benchmark for compensation package and what you’re worth, not to mention it strengthens your bargaining position later on. This is something I personally highly recommend as it was something I did (and in fact my direct boss at that time told me to do this himself when he declined my first ask for a salary raise!) and successfully achieved a raise later. Plus you appear less desperate in the negotiation which is a good thing!
- Find out your replacement cost – meaning how much it’ll cost the company if you leave. In particular if you’re working on projects with tangible deliverables (such as £ X cost savings per year etc vs. if you hire external consultants) – these are important facts to know besides the actual cost of hiring someone to replace you. There’s recruitment cost, project delays, training cost etc – build a reasonable argument around this that you’re delivering results to your company and have examples/proof of your contributions (see next point).
#3. Demonstrate value add, outline your accomplishments
Time to sell/pitch about how awesome and valuable you’re to your firm. It helps to have materials that help demonstrate your value to the organisation. This can be anything from printed materials to an actual presentation. It’s especially helpful if you’re multi-skilled and contribute in various areas, because this is highly likely to mean that the company will incur more cost in replacing you with a few individuals with specific skill sets.What you’re trying to drive across here is your contribution to your firm, and the message that “oh my God, I hope you don’t leave because it’ll be a nightmare”.
#4. Never be the first to name a number
One of the cardinal rules of negotiation is that you should never be the first to name a number. That question will pop up for sure and you’d be pressured to give a number. If your efforts to deflect this discussion isn’t successful, give a narrow-ish range which you’d be happy with if they offer the lowest of that range; or deflect this with any of the below phrases temporarily:
#5. Be ready to discuss more than money
It’s often that politics or organisational structure that comes in the way too. It could be that your boss values your contribution, but is unable to budge on salary due to budget limits, arbitrary standardisation etc. Then, the next question you’ve to ask is: “Are there any other compensation elements that we can discuss?”
By being collaborative in that way, understanding their position (they want to keep you happy too if they know your value add to the firm), they are more inclined to help you out in improving your offer by being more flexible on these aspects:
- Additional vacation days
- Extra training/educational opportunities
- Improvement in bonus structure (cash and/or shares)
- Any other perks/benefits or promotion
Know what you want to ask for here!
#6. Stay silent (momentarily)
People are naturally conditioned to fill silences. When being made an offer, don’t feel compelled to answer right away. Remember: you’re in control of the conversation. Let any offers breathe and often times, you’ll be on the offensive without saying a word as the other party rushes to fill the awkward silence ;)
Source: Business Insider