In a perfect world, you’d like to think that your boss would see your hard work and offer you a raise. But, that doesn’t always happen. More often than not, you’re going to have to ask for a raise, which can be a daunting task for more employees.
But, you can have a better chance at successfully negotiate a pay raise if you prepare beforehand. Here are a few things that you should consider when determining how to negotiate a raise.
4 Ways to Prepare to Ask for a Pay Raise
Understand How Much to Ask For
Before you ask for a raise, you should understand how much other people in your field with your level of education and responsibility are making. You should use websites like Glassdoor, PayScale, or Salary.com to find the market rate for your job or the job that you want if you’re looking to move up with your company.
Knowing comparable salaries will give you better leverage when you ask for a raise. It shows that you’re informed and not just pulling numbers out of thin air. Knowing what others are earning also gives you an idea of the job market if your boss denies your raise and you chose to look for another job.
Research from Columbia Business School found that employees who asked for a specific salary instead of round numbers were more successful in salary negotiations. A precise salary request shows that you’ve put thought into the number and that you didn’t just take a wild guess. The researchers also found that it was more likely that you would receive a counteroffer with a precise figure instead of simply hearing “no” or “try again”.
You should also keep in mind that the average pay raise is typically between 1% and 5%. Sticking to these percentages helps you suggest a number that is realistic and more likely to be accepted.
Know How Much Value You Add
The best way to justify a pay raise to your boss is to have concrete numbers to back up your claim. How much new business have you brought into your firm? How much profit is tied directly to the work that you’ve done? Have any of your special projects led to an increase in sales or profitability? Have you taken on additional responsibility since your company hired you?
You should provide examples of the projects that you’ve worked on recently. And, discuss your accomplishments openly while negotiating. Show that you are a valuable member of the team. In the end, your performance is all that matters. Your performance is what determines if it is profitable for your company to pay you more money. It’s an investment decision on their part. You have to show your boss that you are a good investment for the company that will pay dividends in the way of new sales, customers, or profit.
Rehearse Your Pitch
Most important conversations tend to go better if you rehearse them. It seems strange to play out conversations beforehand, but it can prepare you, keep you calm, and help you anticipate any questions that may arise.
Start by taking a few notes or bullet points that you want to discuss during the negotiation. Practice building on those bullet points as you talk and give concrete examples and any facts or figures to back up your claims.
Put yourself in your boss’ shoes. What questions would you ask? Try to incorporate your answers into your rehearsed conversation. Try to answer those questions before your boss even gets a chance to ask them.
Think Like a Telemarketer
Much like a telemarketer calling during dinner, you may hear “no”. And, you need to prepare with rebuttal answers. Like a telemarketer, you should have a script for the most common questions and refusals you’re most likely to hear.
If your boss says no, you may want to ask for an interim performance appraisal instead of a typical annual one to readdress the issue of a raise. You might be able to lay out a plan with clearly defined goals over the course of the next three or six months instead that could ultimately lead to a raise before your next annual performance review.
The Dos and Don’ts at the Negotiation
Focus on why you deserve a pay raise. Don’t dwell on why you need the money while at the negotiating table.
Dress for the job and the raise that you want. Now is the time to bring out the big guns and look the part. Do you want more responsibility to justify the raise? Show that you want to be upper-level management. Dress the part.
Pick a good time to pitch the idea of a raise. You don’t want to ask for a pay raise when your company is struggling. You should strike when the company is doing well, profits are rising, or the company has just landed a profitable new client. Timing is everything, even with pay raises.
Don’t talk about the last time you received a raise. That’s immaterial. Talk about the value that you add to the company.
Don’t get hung up on the fact that you’ve been with your company for a year, and it’s time for a raise. Don’t get stuck on the cycle of expecting a raise every year at your annual review. Focus on the impact that you make for your company.
Don’t just assume that you deserve a raise just because you’ve done everything your firm has asked of you. You need to go above and beyond what your boss expects. You have to set yourself apart from your co-workers. It’s a competition even if you’re not directly competing with other employees. Many companies rank their employees based on job performance, and promotions and raises are limited to fewer than the top 50%.
Don’t tell your boss that you need a raise because of personal problems or money trouble. That shouldn’t be a factor. Your job performance is the only thing that matters.
Be realistic in the amount of money that you ask for with a raise. Be specific and tie the raise to a percentage increase of your current salary.
Don’t ask for a raise simply because you found out that a co-worker earns more money that you do, even if they do the same job.
Don’t tell you boss that you’re doing the work of three people. If that were the case, then there would be there people. We all can do more, and showing that you deliver is the best way to secure a raise.
Don’t threaten to quit if you don’t get a raise. You have to expect some push back. You have to be ready to hear no. You don’t want to put yourself in a corner where you’ll have to quit simply as a negotiating tactic. If you’re unhappy that you didn’t get a raise, just start looking for a new job at the salary you want on the side.
What to Do With Your Pay Raise
Now that you’ve gotten it, what are you going to do with your pay raise? Far too many people simply forget it’s there and spend it. That’s called lifestyle creep.
If you don’t factor your new pay raise into your family’s monthly budget, you’ll simply spend mindlessly without putting your new raise to work with you.
You should think about paying off debt, increasing your retirement investing, boosting your emergency fund, relooking your insurance coverages, and, of course, having a little fun with your new pay raise.
We research to death for purchase like a new car or washing machine. We want to ensure that we get the best deal on the exact model we want to buy. But, employees often stumble when asking for a pay raise, randomly showing up at our boss’ office.
But, it doesn’t have to be that way. With a little forethought, research, and rehearsing you can successfully negotiate your next pay raise.
Have you ever negotiated for a raise? How did it go?
