In today’s world, tenure doesn’t always correlate to compensation. Generally, there are two ways to make more money in your profession: ask for a pay raise or jump ship and find an external job. Companies often hire external candidates and pay them significantly more than employees who have been in the same role for several years. Not only that, but most organizations don’t give more than a 2 – 5 percent annual raise. A stagnant salary is especially troublesome for those looking for quick debt paydown strategies.
Asking for a raise at work is often a delicate subject. It’s essential to prepare yourself before approaching your boss.
Here’s how to negotiate a raise at work:
Determine How Much You’re Worth
Before asking for a raise, you should find your worth based on your level of experience and how much others earn in your market. Without sufficient research, throwing out a ballpark salary range won’t get you very far. Some of the best websites for salary research include Glassdoor, PayScale, and the U.S. Bureau of Labor Statistics. The best approach is to use a few different sites, come up with an average, and set a lower and upper threshold.
For instance, imagine you find that Certified Public Accountants with three years of experience make $70,000 in your city. Your salary is well below market at $55,000. Before approaching your boss, you could create a range between $65,000 – $75,000. A salary of $65,000 is your lower limit (this number is crucial if you get into back-and-forth negotiations). On the other hand, $75,000 is a “best-case” scenario. Your best shot would be negotiating your salary from $55,000 to $70,000 – the market average.
Don’t Forget About Benefits
There’s a lot more to compensation than your salary. It’s an excellent idea to push for more PTO days and a higher 401(k) contribution. However, you’ll need to find data to support your negotiations. For example, you could refer to the U.S. Bureau of Labor Statistics Employee Benefits Survey. If your employer isn’t willing to budge on your salary, it never hurts to negotiate better benefits. You’ll typically have more success negotiating benefits if you have a long tenure at the company and bring lots of hard-to-find skills to the table.
Consider Your Company’s Needs
At the end of the day, most companies care about the bottom line. Therefore, organizations aim to keep expenses low and income high. Nonetheless, companies seek to retain employees to avoid the costs associated with turnover. Now, you shouldn’t go to your boss and threaten to quit if you don’t get a raise. Instead, find ways to vocalize how valuable you are to the company. Also, consider the company’s long-term goals and how you can help the company achieve them. Whenever possible, use specific examples and always remember to bring up your past success at the organization.
Be Able to Articulate Your Value
Although companies don’t like to eat the cost of turnover, they also don’t want to hand out money to employees that don’t go above and beyond. Thus, it’s essential to articulate the value you bring to the company. Before going to your supervisor, write down a list of five to ten accomplishments – ideally scenarios where you exceeded expectations. Furthermore, you should consider what additional value you can bring after receiving a pay raise. The company wants a return on investment and will likely expect to see you take on more responsibility.
Practice Negotiating with Friends and Family
Unless you’re incredibly well-spoken, you should consider hosting a mock negotiation with friends and family. Pretend the other individual is your boss and start from square one. Be concise but also assertive without coming off too aggressive. Start the conversation by highlighting the value you bring to the company and then pull out the market data with comparable salaries. And don’t let your friend be too friendly – the mock negotiation should be as close to the real thing as possible. Therefore, you should prepare for adverse outcomes, such as your boss flat-out refusing to give you a pay increase.
Put Yourself in Your Boss’ Shoes
Even if you’re a rockstar employee, your boss likely has to go through various hurdles before they can increase your pay. This process often involves communicating the request to upper management and HR. Your boss might think you’re deserving of a pay increase, but sometimes they can’t get approval if the company’s budget doesn’t permit it. Most reasonable bosses will be upfront with you and articulate what they have to do to increase your pay. However, if your boss can’t get approved, don’t take it personally. It’s vital to maintain a positive relationship with your boss, even if you plan to seek employment at another company.
Approach Your Boss
Now’s the time. You did your research and hopefully practiced the conversation with a friend or family member. Set up a short meeting with your boss somewhere private (i.e., a Teams call or conference room). Start by voicing your appreciation for the company and then transition into showcasing what you’ve done to add value to the team. You can also take a more direct approach and ask for a raise upfront, but always be sure to present the data you gathered from your salary research. Moreover, explain how you’ll continue to add value to the company and take on additional responsibilities with the pay raise.
Prepare Yourself for a Negative Response
There’s nothing wrong with asking for a pay raise; it happens all the time. However, make sure not to get your hopes up. Many companies are very “by-the-book” and don’t give pay increases outside of annual reviews. As long as you approach your boss candidly, you shouldn’t have to worry about burned bridges. If you have your heart set on more money, you have two options. First, you can look for internal opportunities within your organization. If you can’t find suitable roles or would instead leave the company, you should search for external opportunities.
If the company decides to give you a raise, pat yourself on the back! You successfully mastered the art of negotiating a higher salary.
What Should You Do After a Raise?
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