How to negotiate a raise in 8 strategic steps
Monday, 19 October 2020
Though half of employers expect employees to ask for a raise each year, seven in 10 workers are nervous about it, according to Salary.com.
Why? When it comes to requesting a raise beyond the standard cost-of-living increase, many worry about offending their boss or getting turned down. Also, existing employees have less leverage to raise their salaries than new hires: When a company has a worker at a certain rate, it doesn't have incentive to suddenly pay that person more.
That said, for two years running, Salary.com has found that about 70% of American workers requested a raise, and half of workers actually received one – with almost half of the recipients being granted the amount they requested or more.
Those aren't bad odds. Here's how to improve your chances.
1. Determine the best time to ask for a raise
"Match it to fiscal realities," says Pat Katepoo, founder of Pay Raise Prep School for Women, an online course that coaches women in asking for a raise. No one was asking in 2008 – if they had a job at all. So, what's happening in the economy? What's happening with the company? Is the company having cash flow issues? Is there a merger going on? Are there management changes going on? You want to ask when things are stable."
If the macro signs look promising, then time your pitch for at least one of these three personal circumstances. The best is that you're fresh off a big success, such as bringing in a lucrative client. "Ideally, your work is already worthy of an increase," says Todd Camp, director of coaching at Negotiator-Pro, a platform for sales and negotiation.
The other two are that you've just taken on new job responsibilities, and that your review is at least a month from now, so you can lay the groundwork to get one timed with the review cycle.
2. Figure out how much you should be making
Use websites like Salary.com, Payscale.com and Glassdoor.com and call professional associations to find out the range of pay for people in your position with your level of experience and in your city. Based on that, determine where your performance lands you – 50th percentile? 75th? 90th?
Ask mentors what they think you should be making, and say to professional peers, "What salary do you think is appropriate for someone with my experience and background?"
3. Identify your role in achieving company goals
You won't get a salary boost just for performing your job duties. To formulate a persuasive argument, identify who holds the purse strings and see if you can arrange a meeting or otherwise find out that person's goals. "Identify their challenges and unique pain points that are specific to your role and responsibilities," says Camp.
Then, create a plan for how you can tangibly and quantifiably help reach those goals.
4. Communicate your successes
"Have a strategic approach where you're demonstrating and communicating your professional worth and contributions year round," says Katepoo, "so when you have the meeting with your boss, it's already been primed. The communication and relationship are there as a good base and foundation, and then you're having a conversation about how you'll be rewarded for what you're bringing to the table."
5. Determine how much salary to ask for
Based on your salary comparison, your plan for helping the company meet goals, and how well you've been communicating your successes, come up with your target figure.
You might not name this number in your negotiation. Sometimes, if you don't, they may offer you more. If your company tends to be tight with its budget, you may want to name a high but not outlandish number, knowing that it will likely be worked down. But if you do name one, say, 'Based on my research, I've found people in my position are making $70,000, and I'm making $62,000,'" says Katepoo.
6. Consider whether to use a counteroffer
This is a dangerous strategy, because it may come across as, if you don't give me this raise, I'll leave. So, "Only get a counteroffer if you mean it and are not using it as a bluff," says Katepoo.
If you do go this route, approach it as though you'd like your boss to help you with something that's come up: "I like working here and I appreciate our trust and relationship. It's only fair for you to know I've ben recruited by such and such a place. My preference is to stay here, and their offer is $75,000. Is there anyway you can match their offer?"
7. Prepare a win-win argument
Stay away from personal reasons, like that you need more money because you had a baby. Keep the discussion from becoming adversarial by making it collaborative, and think ahead about how your interests can be met within your manager's budget constraints. Your most persuasive argument will be market research showing that you're underpaid, your past performance and future promises aligned with your company and department goals.
8. What to do if your boss says no to your raise
Ask what you would need to do performance-wise to receive one – getting numbers so you and your manager can track your progress – and request to revisit the issue in a few months. And until that future date, continue turning out strong work in line with your company and department goals – and communicate your successes.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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