Negotiating a Raise (The Ultimate Guide) | INVESTED MOM
Are you looking to increase your income? In this day and age, it's more important than ever to be proactive about your career. One of the best ways to do that is by negotiating a raise. It can be daunting, but with the right tools, it can be a relatively easy process. Knowing how to negotiate a raise is an essential skill for any professional.
In this article, I will walk you through everything you need to know to successfully negotiate a raise.
I'll start by helping you organize your contribution and value within the company. From there, I'll help you find out how much your skillset is worth on the open market. With that information in hand, you'll be able to confidently set up a meeting with your boss and position yourself as an asset to the company.
If you'd like a shortcut - a high-level overview - check out the 4-part video series linked in the article.
Step #1 - Organize Your Contribution
Before you even think about negotiating a raise, it's essential to review how much value you bring to the company. Start by identifying how much work you're doing and how well you're performing. Treat this step the same way you would prepare for a performance review conversation.
Make sure to highlight where you've gone above and beyond the required duties. Did you take on extra work? Did you put in extra hours? Make sure to list out the skills you've acquired since your first day of employment.
Whether it be small things like staying an extra 5 minutes to help your co-workers (demonstrating teamwork) or consistently exceeding on deliverables, any effort should be taken into account. These efforts will demonstrate your competitive edge and how much value you bring to the business.
Also, list any new skills you've acquired since starting with the company. For example, perhaps you've taken on extra responsibilities or started taking classes related to your job. This will help show how much you've grown and how valuable you are to the company and your manager.
Importance of This Step
This step is important because it will demonstrate your competitive edge and showcase how you're actively contributing to the business. It's also a great way to boost your confidence before going into the raise request.
Rather than just making a mental note, it's essential that you physically record a list of how much you've contributed and how valuable you are to the business. Write it down. List specific accomplishments. Keep that list handy as it will be used during the salary negotiations. Here is an example of the lists you should make. Let's use a salesperson as an example:
Identification of Your Workload
● Lead generation.
● Sales forecasting.
● Customer service.
● Training new staff. *
● Outreach and advertising.
● Presentations & demonstrations.
Use a star or any other way to identify a task that you are currently doing that is not within your current scope of work. This will be used as leverage during negotiation. For example, if training new staff is not a part of the job description, you can make a case for how it's beneficial to the business and how it should lead to a pay raise. Higher contribution = higher salary.
You can find the costs of sales training and show how the business is essentially saving money by you taking on these extra responsibilities. By offering 50% of what it would cost to hire someone else as a part of your pay raise, you can demonstrate how much value you bring to the business. We'll go over this in more detail later on in this article.
Record Your Contribution To The Business
(Highlight Where You Excelled Beyond Required)
● Attained a 97% customer satisfaction rate.
● Increased sales by 25% in the first quarter.
● Responded to 500 customer inquiries promptly.
● Became the go-to person for colleagues with questions.
● Led team to complete the project within budget and ahead of schedule.
● Introduced new product ideas that have been adopted by the company, resulting in 10% higher profits.
By showcasing specific data points, managers can easily see numerically why a raise would be a good decision. Ensure that these are accurate and record how much impact each event had. Use a specific period. It could be a few months, past year, fiscal year, or since your last raise. The most important thing here is that you're specific.
List of Acquired Skills
● First Aid Certified.
● Completed sales training course.
● Proficient in using CRM software.
● Received certification from the industry's leading organization.
● Attended a course on how to communicate better with customers.
Include any skills that are beneficial to the business and how your skills can improve efficiency. You may have been hired based on a pay rate before learning these skills but now that you know how you can use this when asking for a raise.
Step #2 - Market Research: Identify your average salary
Now that you know how valuable you are to the company, it's time to find your market value. How much is your skillset truly worth? Do some research into what the average salary of similar or comparable roles is. Do a job search as if you're a job seeker in the market for a new job. Look at your exact job title. Also, look at job titles that include your acquired skills. Record those numbers accurately and compare them to your current salary. This information can help inform your presentation when it comes time for negotiation.
Focus on the skillset and not the job description. A sales job may be similar across the board, but if you know how to use CRM software, you can use that as leverage to increase your pay rate. By showing you're not only excellent at sales in your current role, but also an expert in the industry through passionate learning, you can make a case for how much more valuable you are.
Again, specific data points will be your best friend here. Knowing the business model of the company you work for and how much top-line revenue was generated by your efforts can be an invaluable asset. Don't be afraid to bring up competitors as that will showcase how your talents lost will be detrimental to the business.
By using your research and how much others in similar positions make, you can understand what to ask for and show how you came up with the amount you're asking for. Prepare this information for the next step. This gives you the power to negotiate how much you're worth and how your skill set is valuable to the business and competitors.
Importance of Market Research for salary negotiation
This step is important when it comes to how much salary increase to ask for. Don't sell yourself short, but be realistic. This is why you want to know the comparable pay range when you ask for a raise. It's important to understand how your base pay compares to those of your competitors.
Managers are business. You don't want to be asking for a salary increase that isn't realistic. By doing your research, you can figure out how much is reasonable and how much the company could be prepared to pay.
It also gives you the knowledge and confidence to stand your ground during a negotiation. When someone isn't sure how much they should be asking for, it's easy to back down or get too anxious when discussing terms. Having a clear plan and understanding of how much is fair will give you the power to hold your own in the conversation.
Remember, talking to your boss about a pay increase should be a collaborative event, not you fighting for your life. You are on the same side, and it's your job to help your manager advocate for you by presenting solid information. After all, your manager has to justify why they are spending additional company money and why it benefits the business to offer you a monetary raise.
I suggest price anchoring the amount at the top end of the range (increase the ask slightly anticipating a counteroffer) to get your desired raise. This will also help set the expectations for your negotiation and how much you're really worth. Most people are scared to ask for raises and lowball themselves. Don't do that!
If you are not happy with your current job position and are denied the raise, you may even find that competitors can offer a better position where future employment is possible. By simply understanding the industry and job market you're in, you can open new doors or improve your current one.
Common Mistake When It Comes To Market Research
One of the most common mistakes is not doing enough research. Don't just rely on one source, especially if it's not from a reliable source. You should be gathering information from multiple sources within your industry and geographic area to really understand how much you're worth and how your salary compares.
It's also important to factor in how long you have been in the position and how much experience you have. If you are below the average market rate, it could be a valuable negotiation tool to get more money in your desired salary range.
Another mistake is to not factor in how your skill set differs from others in the industry. As mentioned, if you know how to use certain software, you can use that to your advantage. Make sure to highlight how unique and valuable your skill set is as this will help you get the salary you want.
Finally, make sure to factor in how other benefits may increase or decrease the value of salary negotiations. If your company offers medical coverage but only the minimum vacation time, that could be a valuable point of negotiation. It's not always about higher pay, you could ask for more vacation time allowing you to spend more time with your family or building your own business. Understand how these benefits can affect how much you are worth so you can negotiate the best deal for yourself.
Step #3 - Set Up A Meeting to discuss your pay raise
Once you have all the information you need, it's time to set up a meeting with your manager and/or HR representative. Before the meeting, make sure to build a great relationship with this person (if you haven't already) as they will be the ones giving the green light on your pay raise. If you want more money, they need to see your value.
Resources such as the books “Win Friends and Influence People” by Dale Carnegie and “Pre-Suasion” by Robert Cialdini are packed with helpful tips on how to behave weeks before a negotiation.
On the day of the meeting, make sure to be confident and prepared with all of your research and data points so that you can demonstrate how valuable your skillset is worth. Be assertive but not aggressive to get what you want without making your boss feel attacked. Again, this is not a show-down, it's a collaboration between you and your employer.
Important Tips For Setting Up A Meeting
Being agreeable can be advantageous but being too agreeable can equate to being taken advantage of. Know when to respect manager time but also be aware if they are just putting it off to prevent it from happening.
As mentioned earlier, managers are busy so understanding how to properly set up a meeting will increase the chances of getting what you want. Show your manager how important this meeting is to you and how much you appreciate their time.
A brief conversation with your boss ahead of scheduling the meeting on their calendar will give them a heads-up that it's coming and shows that you respect their time. Don't ambush your boss.
Step #4 - Position Yourself As An Asset - it's not just about more money
The main focus in this step should be how to showcase how valuable your skillset is, how you can benefit the company in the long run, and how much you are worth. This is where the first two steps come into play as your research and presentation should prove how valuable you are and how much you should be paid.
Show up prepared as if you are pitching yourself to investors. Selling yourself and how you can benefit the business is a key factor in getting the raise you want.
When talking about how you contribute to the business, focus on how unique and irreplaceable your skillset is. If you know that not many other people in the industry know how to use certain software or processes, make sure to call attention to these points. Explain how a raise could result in an even stronger company by utilizing those unique and valuable skill sets.
Be aware of any counter offers made by the other party as well. When this happens it's important that you remain calm and collected so that you can explain how reasonable your request is based on all of the research and information gathered from the first two steps.
Chris Voss' book “Never Split The Difference” is a great resource for how to effectively negotiate in any situation. Whether it be a raise negotiation or any other negotiation, Voss provides tactical advice and how to stay in control of the conversation. If you are a salesperson, for example, you can even bring in all the extra reading materials you personally took the initiative to learn.
Don't talk about yourself and how the raise would be great for you. Yes, you want to feel valued, but focus the spotlight on them and how they can benefit from giving you a raise. Focus on your performance and future potential. Talk about your impact. Draw the full picture for them. Speak to your boss candidly.
Most managers are under pressure themselves and showing empathy for their position and how you can help them rather than your own desires will show that you care about the company and how both parties can benefit. Alleviate their troubles and celebrate their contributions and through the law of reciprocity, you will be able to get the raise you want.
The Bottom Line
The bottom line is that it takes preparation and a confident attitude to successfully negotiate a raise. With specific data points, strong relationships, and consistent self-improvement, you will be able to ask for a raise and get the pay raise you want.
With inflation in mind, it's important to constantly review how much you're bringing to the table to stay ahead of the curve. If you aren't getting a raise, you are making less money every year because the purchasing power of your salary will decrease.
A raise negotiation is an opportunity to make sure you stay ahead of inflation and get what you are worth. Use this guide to confidently negotiate a raise from your employer and ensure your salary is up-to-date with the market value of your skillset. Don't be afraid to ask for what you deserve!
By following the steps outlined above, you can take charge of your career and make sure that you're properly compensated for the hard work you put in. With a little preparation, you'll be able to increase your income and ensure that you're making enough to not just cover your living expenses but build long-term wealth.
