How to Negotiate a Raise at Work
If you’re unsatisfied with your current salary, it might be time to ask for a raise. But just because you feel as if you’re underpaid doesn’t mean you’re going to get the increase you want. Employers often give raises only sparingly, on a set schedule, following a formal process. Negotiating a raise outside the organization’s standard protocol or above a disappointingly low increment requires a strategic approach.
Expecting an income boost simply by request, putting forth a weak plea, or making baseless demands is likely to leave you empty-handed. It could even backfire on you, causing you to seem out of touch, unreasonable, or undeservedly entitled, leading to tension between you and your manager. The best way to avoid this and set yourself up for fair consideration is to go into the ask with a game plan.
Here’s how to make a persuasive case and inspire the best possible outcome when negotiating a raise at work.
Check In With Yourself
Something is driving your desire to ask for more money, but is it something that would be compelling to your employer? Wanting your spouse to stay home with the kids, preparing to send your teens to college, or qualifying for a mortgage on your dream home has no bearing on your value to your employer. And, unfortunately, it doesn’t matter if you found out your friend in another department makes more than you.
What matters is going into the conversation with the right strategy. Maybe you’ve taken on more high-profile projects recently. Perhaps you had to forego a raise in the past and were promised to be caught up later. Have you been blowing past your goals? Did you take over duties from a co-worker who left? Are you being recruited by another company with a higher offer on the table? Then asking for a raise is more likely to be met with success.
Do Your Research
If you’re going to ask for a salary adjustment, you need to target a reasonable number. It’s okay to aim high, but not so high that you give the impression that you’re living in a pipe dream. You also don’t want to sell yourself too short; make the goal worthwhile.
There are several ways to research salary data and determine the going salary range for someone in a similar position with your experience level. Ask trusted colleagues, tap into your network, contact professional associations in your field, browse job listings, and check sites like Glassdoor.com, Indeed.com, and Salary.com. Like real estate comps, it’s best to find data on salaries for jobs that closely match your own, including the organization’s size, industry, and geographic location.
Equipping yourself with this information will help you feel more confident and enable you to back up your argument during the negotiation.
Familiarize Yourself with the Financials
One of the biggest mistakes people make is asking for a raise at the wrong time for the company. When the numbers are down, you’re going up against bad timing. If the economy is in trouble, tread lightly. Has your sector been hit hard by some outside factor? You should be aware of this, no matter your role or level in the organization.
If you work for a publicly-traded company, the earnings reports are easy to find on the company’s website or at SEC.gov. Privately-held companies are not obligated to share their numbers but often keep employees abreast of growth and challenges. Even if leadership is tight-lipped, keep an eye out for clues as to how business is faring.
It’s not that you can’t ask for a raise when the financials are shaky, but you should be mindful of this and factor it into your negotiations.
Focus on Your Achievements
Another common error employees make when asking for a raise is focusing on the wrong rationale. Have you been a loyal, dependable worker? Do you come in early and stay late? Do you always do what’s asked of you? Do you tend to fill in for others and pick up the slack? Are you always pleasant and likable? These are all commendable qualities, but unfortunately, not always enough to justify a raise from your employer’s perspective.
Focus on the value you’ve brought to the company through your achievements. Point to specific metrics and be able to explain how your contributions moved the needle. Driving revenue or saving money for the company would be your biggest boon, but another feather in your cap could be consistently exceeding expectations, creating measurable growth in client satisfaction, or gaining new applicable and marketable skills.
The key is demonstrating that you’re a valuable resource to the company and bringing evidence to back up your claim.
Plan Your Approach
When asking for a raise, your approach and timing matter. Consider the bigger picture to improve your odds of getting what you want. If you plan to ask during your normal performance review process — hoping for more than the standard cost-of-living adjustment — you would handle things differently than you would outside the typical cycle when you have to set the stage.
Suppose you just aced a major presentation, delivered a project way ahead of schedule and below budget, or received high praise from a client for going above and beyond. In that case, this may be your opportunity to strike while the iron is hot. Your employer is more likely to be open to your request when a reminder that you’re a great asset to the team is fresh on their mind.
But if you’ve just heard budget cuts are coming down the pike, you’ve recently lost an important customer, or management is dealing with a setback of some kind, it’s not likely the best time to broach the subject. There may not be a perfect time, but do your best to steer clear of obviously inopportune moments.
Plan ahead and get on their calendar; this isn’t an occasion for knocking on the door and asking, “do you have a minute?” Try to schedule your meeting when you have the best chance of having a captive and engaged audience — not when your manager is traveling, caught in the middle of a hectic period, or otherwise preoccupied.
Nail Your Pitch
Asking for a salary increase is a high-stakes negotiation. Reaching a new level of income can make a significant difference in your career and confidence. Even a moderate increase will have a compounding effect over time. So it’s important to prepare for your pitch, anticipate how the scenario will play out, and practice ahead of the meeting.
It will be a conversation, not a presentation, but it helps to organize your thoughts and know what points you want to cover in advance. Hopefully, you’ve already established a relationship that allows for a cordial exchange of mutual respect.
Start by explaining what you’re asking for and why. Then follow it up with your arguments that describe why you believe you deserve the raise, focusing on the salary data you’ve gathered and your achievements. Be direct and concise. Although you don’t want to inflate your achievements, now is not the time to be humble. Be confident in your value, and don’t be shy about pointing out where you’ve outperformed expectations, saved the company money, or gone above and beyond the call of duty. Avoid bringing up negative information, complaints, or comparing yourself to colleagues in a critical way.
Next, be prepared to respond to objections and counter-arguments, and answer questions with thoughtfulness. If you find yourself getting emotional, take deep breaths and try to remain grounded in the facts. Remember, you’re going in confident that you deserve the raise. Your manager may or may not agree, but your worth is not dependent on their answer; you always have other options.
Bring a Backup Plan
If you get an immediate “yes,” congratulations! Don’t kick yourself for not asking for more; chalk it up as a win, and continue to aim high so you can come in even stronger next time.
But there’s a better chance you’ll need to compromise. If they counter with a lower number, counter back and be willing to split the difference. If a large bump is out of the question, see if you can get them to agree to incremental increases over time with metrics attached.
If you get an outright “no,” don’t take it personally. Your manager may be unable to budge on the budget, or you may have overestimated your hand. However, if you’ve made a strong case, there could still be room for negotiation. Rejection isn’t easy, but you only lose if you don’t go to bat for yourself. One thing you shouldn’t do, though, is issue an ultimatum - unless you are prepared to follow through. Threatening to quit signals to your boss that you aren’t happy in your job, and instead of a counteroffer, you may find yourself unemployed.
If you can’t get a raise in salary, consider your total compensation package. There might be wiggle room or opportunities to gain extra benefits. Bring the possibility of stock options, bonuses, paid time off, remote workdays, a more flexible schedule, or other perks into the conversation. You may walk away with more than you expected when all is said and done.
Look Forward to a Future With Higher Pay
The only way to lose in negotiating for a raise is to not negotiate for one at all. Failure to ask for what you want is counting yourself out before you even start. If you truly contribute value to a company, it will pay off — now or in the future.
Every time you negotiate for higher pay, you build a skill that will serve you throughout your career. Doing salary research, focusing on your accomplishments, being aware of your value to an organization, and knowing how to demonstrate your worth will go a long way toward helping you advance professionally so you can look forward to a brighter future.
John J. Diak, CFP® is the Principal & Client Wealth Manager at Oatley & Diak, LLC in Parker, Colorado. He assists clients through many difficult lifestyle changes such as business downturns, retirement planning, divorce, the death of a spouse, and family estate issues among others. Oatley & Diak, LLC is a family-run registered investment advisory (RIA) firm that provides clients with investment management and financial planning services in a hands-on, intimate environment. Learn more about them at oatleydiak.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.