The Unfair Advantage: Negotiation Tips on How to Receive a Salary Increase
According to a World News Real Money poll, 71% of American families thought that they could be earning more money, but didn’t know how to ask for it. What’s worse is that only 41% of them ever ask for the raise, even though 84% of bosses expect workers to ask them for a raise.
My response to this fact is, “ARE YOU KIDDING ME?!”
This isn’t like that one time where you were out with friends and had a crush on that one cute guy/girl, but you were too shy to go say anything. Neither of you made a move so nothing really came of it. Because hey, if THEY really liked YOU then they would have come over and said something. Right? WRONG! There are real consequences involved with not understanding your value. In other words, not knowing what you are worth.
What is the Worth of One Raise to You?
Receiving a raise is by far the easiest and fastest way to make more money. According to the Journal of Organizational Behavior, refusing to negotiate a salary increase could mean missing out on over $600,000 in extra income in your lifetime. If math isn’t your thing, let me put this in a different way.
Imagine that you are making $30,000 a year (I’m sure a lot of my readers can relate). No bonuses. No commissions. Just $30k. Now let’s imagine that after ONE conversation with your boss, you were able to negotiate a $5,000 raise, maybe even a $10k raise. What if you were able to double your salary (from $30k to $60K) in just a single conversation? What could that extra money mean for you and your family?
You could pay down your mortgage, replace your old car, pay off school loans, or treat your loved ones to a special and well-deserved getaway vacation.
I believe most people would agree with me that if they could make MORE money at their job then they would be happier. So it baffles me that so many people don’t even attempt to approach their employer for a salary increase. You have NOTHING to lose and everything to gain by learning how to negotiate your next pay raise and I will show you how.
Step 1: Prepare like a Pro. Go for Facts not Feelings
If you are looking to increase your income through salary negotiations, either when you’re first offered the job or during your performance review, you need to develop a game plan. Head over to one of the following salary comparison websites and research how much money other professionals in your industry are being paid:
Aim to put yourself in the Top 30% of professionals in your industry. Understand that, at some point, you will need to justify WHY you deserve to be a top earner.
One giant way to lose the professional upper hand during a raise negotiation is to use the word “feel.” Refrain from using phrases such as, “I feel as though I do more work than others in the office” or “I feel like it’s been a long time since I had a raise.” Rather, find out how much others are making in the same position as you at other companies. That allows you to enter the conversation with facts instead of feelings.
Coming to the negotiation with your pay-scale research, company research, and any competitor analysis will only serve to anchor your arguments with facts and greatly increase your chances of landing your salary increase.
Step 2: Determine what a Successful Negotiation Looks like to YOU
It took me a long time to understand that money isn’t the only thing that I should be looking to negotiate. Instead of having a singular focus on money, expand your focus to create what I like to call a Better Compensation Package. Take a moment and think about what YOU would want more of in your life: more money, more vacation time, the option to telecommute, company-paid trainings, a new title, etc. Using the example below as a guide, write down 3 different compensation packages of relative equal value that would make you happy no matter which you selected.
Once you have at least 3 different outcomes written down, you will have way better flexibility in walking away from the negotiation table successfully.
Step 3: Plant the Opportunity Seed
You NEVER want to start a full conversation about increasing your salary without first warming up your employer or your hiring manager. The secret is to drop a small but noticeable mention that you are looking to receive a salary increase. There are two scenarios that I would like to cover to better outline what to do if you are either starting a job search or if you’re currently employed and want to remain at the company.
Scenario 1: What to do if you are currently job searching?
I’ve seen many people trip over themselves or freeze up when they are asked either of the following two questions:
“What are your salary expectations?”
“How much were you being compensated in your last role?”
Here is a golden statement that has served me well in all of my job searches in the past. Drop this EARLY in your conversations with employers and hiring managers to begin to position yourself in the Top 30% of earners in your industry:
“Well, at my last job I was well-compensated and I’m certainly looking for compensation that is a good fit for me. However, I’m also looking for a better fit in terms of my values and what I want to do with my career.”
That way, if you progress to the final rounds of their interview process, they will already be willing to negotiate your salary at a higher rate.
Did you know that you can add value to an employer by uncovering a company’s pain points and suggesting real solutions to maximize your value? Find out how on our recent blog post: How to Skip the Line & Reduce your Job Search.
Scenario 2: What to do if you want a salary increase at your current job?
In this scenario, you are able to be more direct in your approach. The approach that I teach to getting your salary increase can be observed below:
(Employer’s Needs + A Bit More = Salary Increase)
Since you already know who the current decision makers are, it takes out a lot of the guess work in positioning yourself for a raise. Now it’s as simple as approaching your employer and letting them know that you’d like to find out exactly what it would take to get a raise. To your boss, it’s going to be a refreshing change of pace that an employee is ambitious enough to go above and beyond for the company.
Pro Tip: Make sure that you get ultra-specific and repeat back exactly what they told you their needs are. ‘So you are saying, if I were to do X that it would make me the best candidate for a raise?’
After you confirm your boss’s needs, explain to them that you are willing to make strides to providing them with thing X.
As you are doing thing X, try to underpromise and overdeliver on the desired outcome. Going back to the formula, when I say to do “a bit more” I don’t mean kissing up to the boss and asking if they want you to pick up coffee for them every morning. A good example of doing a bit more: If your boss wants you to grow the company Facebook group by 10% in 3 months, shoot for 15% AND see if you can also increase the number of social media followers on other platforms like Twitter. Agree to the 10% in 3-months goal and come to the table with that extra 5% and followers. Thus, overdelivering!
Make sure to document your efforts and show how you have either grown productivity or how your efforts have increased revenues. You will need this later, as it will be what you will use to position yourself for a raise.
Step 4: How to Behave during the Negotiation“More than 80% of every negotiation happens before you even sit down at the negotiation table.” Click To Tweet
Before you even sit down at the negotiation table, if you’ve put the work in, you will immediately feel more confident. Not only have you completed the steps necessary in landing your salary increase (and perhaps a bit more than asked) you should have also outlined the 3 different compensation packages to help you achieve the greatest amount of flexibility throughout the conversation.
When it comes to how to behave at the negotiation, you want to be firm on your interests but be flexible on how you can achieve them. Show them WHY you deserve to be at the top of that pay scale by discussing EXACTLY what you’ve done for the company and what you plan to do moving forward.
Stay away from aggressive take-it-or-leave-it demands at all cost. Be prepared to handle any counter-arguments that your employers might have. Justifying your salary increase shouldn’t be hard given that you’ve already taken the time to identify what it would take to receive a raise. Now you are simply discussing the value that you bring to the company. Be respectful of your boss’s busy schedule and exercise your patience if the negotiation stretches into several rounds before you reach your resolution.
Step 5: Get it in WritingWhen it comes to negotiations, if you don’t have it in writing, it doesn’t exist. Click To Tweet
Regardless if your boss or hiring manager tells you that they are going to draft up a formal copy of what was discussed during your negotiation, you need to resist the urge to sit around and wait. Why? Simply because a person’s memory isn’t perfect. Most people can’t remember what they had for dinner last Tuesday, let alone every single detail of the compensation package that you painstakingly worked on.
Instead of leaving things to chance, I suggest using the 24-hour Post-Discussion Follow-Up. Stay in control of the conversation by sending a single email recapping which things were discussed and any new concessions that were made in order to help move the deal across the line. Your employer will appreciate the meeting summary and it will help jog their memory to complete any necessary items on their end. Having a prompt email follow-up will make sure that your salary increase and any other agreed upon compensation benefits are made both quickly and accurately.