Perhaps one of the quickest ways to increase your earning potential is to receive a raise at your current job. The process of negotiating a pay increase can be awkward for the best of employees, but by failing to speak up you could be leaving hundreds of thousands of dollars in life time earnings on the table.
WOMEN, SPEAK UP!
In a study conducted by Linda Babcock in her book Women Don’t Ask she found that when MBA graduates were offered a job only 7% of women negotiated the offered amount, while 57% of men negotiated. Of men and women who negotiated 57% received a raise on average of 7%. That 7% figure may not seem large, but consider a $50k salary, where 7% would be a $3.5k increase paid EVERY YEAR. It starts to add up. Babcock finds women are hesitant to ask for more because they are concerned about the reputational risks of negotiating their salary.
I can relate. When starting my first job out of university I happily took the salary offered to me without a second thought. Part of me was just thrilled to have a job! I was also intimidated by the “grownups” on the other side of the table that had a lot more experience than me.
The truth is a lot of employers expect, and likely will respect you for negotiating your salary. Making sure you are fairly compensated for your contributions is in your best interest as well as the company’s. The question then becomes “how do I negotiate an offer or a salary increase without seeming too aggressive?”
Before you negotiate an offer or existing salary make sure you know the industry average. There are tons of sources that offer these types of figures, but make sure the source is reputable. Bringing a letter from your mom to your boss probably isn’t going to cut it. Instead check out some numbers for similar positions as yours on sites like PayScale or Salary.com. One of the stronger sources would be a specific salary survey done in your profession or even sitting down with another prospective employer. Talking with fellow employees can be a good way to determine a salary range, however, when negotiating you won’t want to limit or compare yourself directly to your peers unless largely beneficial.
Now that you have an idea of the typical salary range you need to make a sound argument on where you should be in that range. List out your contributions on paper to the company and make sure you have evidence to back up your accomplishments. The more specific and concrete your contributions the better and they should show why you’re a cut above the rest. Saying “I’ve been here for 5 years” is just terrible…You’ve been here for 5 years?! Great, so has the door mat! Your contributions should prove to your employer that without you they are lost and doomed.
Also write down any ideas you may have that would impress your future/current boss as it shows your ability to think as a top performer within the company. As you’ll see these will be the key focus points when discussing your negotiation.
2) CARDINAL RULE
If you are in an interview for a job and are asked how much you are expecting DO NOT answer with an amount. Providing an amount seriously diminishes your negotiating position. Here’s a perfect example of why as experienced by yours truly:
Prior to being interviewed for a job I was asked about salary expectations – before I even walked in the door or knew anything about the position! I was eager to please and really hoping to get the job so I gave an amount that I felt was fair but was under the industry average because of my lack of experience. After a few interviews I was given an offer, and amazingly it was the exact amount I had requested! Once the excitement of the offer wore off I started to think I had maybe undersold myself, which is a terrible feeling. After a bit of negotiation I was able to claw back a 10% increase, but the lesson was a good one.
Looking back I realized I had shorted myself by revealing my pay expectations. Often employers and negotiators will push for you to answer this question, even if you decline at first. Realize that this is all part of the game and their main objective here is to determine the least amount that you are willing to accept. There is no amount you can provide that is of benefit to you because:
1) If you say a reasonable amount, you may be shorting yourself
2) If you over compensate with a high amount you look ridiculous
Therefore, your objective should be to get them to say their budget figure first. Here’s some lines to sidestep their initial salary questions:
“Before we talk figures I’d like to learn a bit more about the job” (stall tactic)
“I’m unsure of what a fair salary would be off the top of my head – perhaps we can start by giving me your budget for the position” (reversal tactic)
Putting them in the hot seat takes a lot of the pressure off you. The more seasoned the negotiator the more they will press to get a number out of you. Your last result should be to say you don’t feel comfortable providing a number and cannot comment. This may seem a bit standoffish but an employer won’t likely take you off their shortlist just because you wouldn’t mention a salary number for their position.
Conversely, if you are asking for a pay increase it’s difficult to have the conversation as an expectation (your current salary) has already been set. However, positioning having your boss provide a figure first is always an advantage
3) THE TALK
You have your ammunition now it’s time to have the talk. I would highly suggest taking a couple practice sessions with someone who’s stubborn, or at the very least in front of a mirror. Try even going to a flea market and haggling a couple of vendors. When you’re in the hot seat it’s important that you’re composed and confident, which practicing will help.
If you’re negotiating an existing salary set up a time with your boss in advance, the actual conversation doesn’t have to be longer than 3-5 minutes, but may take longer if they have any questions. If your boss asks what the meeting is about in advance say you are looking to discuss your role in the organization.
Start the conversation by commenting on the reasons you enjoy working at the company and why you’re a good fit. You want to get your boss nodding their head here so they’ll feel they are on the same page. Then discuss your accomplishments that you’ve already wrote down and how they’ve helped the company. This may seem like bragging and feel a bit unnatural but it’s crucial to helping your boss understand why it is you deserve your raise. This should lead right into your final pitch for a raise which you will phrase as a “pay adjustment” to better reflect the industry standard and your contributions. (I use this term because often the word “raise” or “more money” feels like you’re trying to just take without giving. Asking for an adjustment that better reflects your contributions makes it seem like a win-win for both parties.) Then wait…don’t kill the silence, embrace it. They should be the first to speak.
Your boss is on the hot seat and may give you one of many excuses as to why it’s a bad time; however, there is never a good time from the perspective of an employer. You may hear “there’s a freeze on salary increases”, “the company isn’t doing so well financially”, “let’s talk at your annual review”. You’ve prepared well and worked hard, so don’t let them off the hook. Stress that this adjustment is pivotal to ensure you are fairly paid and if they continue to delay request a specific date that the topic can be revisited. When handling their reservations, which there likely will be, it’s important you do not get emotional or defensive. Respond in a calm, but assertive manner.
Once you have the conversation, even if you don’t get an immediate raise, you’ll feel a sense of accomplishment for at least having the guts to advocate for yourself. There is a chance you may not get your employer to budge if you are on set pay grids or they don’t see eye to eye with you on your value to the company. In cases such as these you should be as loyal as your opportunities, and if you have a better option somewhere else, it may be wise to explore.
It may be an awkward 2-3 minute conversation but the talk can have long lasting rewards for your career. To quote Timothy Feriss, author of the 4-Hour Work Week:
A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have.by