Negotiating a Pay Rise
Negotiating a Pay Rise
How do you go about Negotiating a Pay Rise? You are doing a good job. Perhaps you feel the company need you more than you need them? Maybe you are tactically looking to leverage your employers need for your skillset for the purpose of getting a pay rise. Whatever your reasons are for wanting more money, you are reading this because you want to see how to do it properly.
Chance of Success
The first thing I would say before you go knocking down your boss’s door is to gauge your realistic chances of success. A common mistake is to think “If you don’t ask, you don’t get”. Whilst that may be true in general life, this is about negotiating and not requesting. A negotiation is more like chess; each time you make a move your opponent can then make a move. Therefore, there can be a repercussion on you if you make the wrong move.
There are a few questions you need to be honest with yourself about. When doing this try to be objective and take any emotion out of the answers you give yourself. How important is your skillset to your employer? How hard and how costly will it be to replace you? What leverage do you have to negotiate this and gain the upper hand?
You also need to consider who you are negotiating with. Historically, or to the best of your knowledge, have they conceded to pay rise negotiations from other people in your business and in your position in the past?
Assessing the Risk
When trying to negotiate a pay rise typically it is you bringing the issue to your employer. 99% of bosses when faced with this will not automatically say yes and be pleased about it. There is likely to be some kick back from them. You will need assess the risk of that kick back.
If you are within the first two years of your employment you are limited on your employment rights. An employer has every right to fire you on the spot if they wanted. Most will not take this extreme action, but they can legitimately do that if they so wish. So, consider the risk of losing your job if you work for the type of person to do that. And whilst some might say “well, I wouldn’t want to work for someone like that anyway”, that is all well and good but if you are out of work for 6 months is it worth it? If you think it is worth trying and the risk is low of getting fired, then read on.
The other risk, and much more common, is how it will affect your career prospects if you are to stay. If you do not want to leave, and just want more money or a promotion with more money, then there is another risk you must consider. Put yourself in the shoes of your employer. Would you promote someone into a position where they have more leverage in the business if they have already shown that they are willing to leverage themselves against you to get a salary increase? Tactically it is not wise from an employer’s angle.
The time has come where you have weighed up the chance of success, assessed the risk and decided it is worth diving into. How do you approach your boss to negotiate a pay rise?
The first thing is to consider who is the best person to approach. Your supervisor or line manager may have little or no sway or even power to change anything. So, the best person to approach will be the most senior person you know that has power over your wages and to whom you hold value to.
Pick an appropriate time to make your approach when negotiating a pay rise. Perhaps you’ve in the process of landing a great account, but it is not quite there yet. Maybe you are in the middle of a record-breaking performance period. Or the best time is when you are having a great performance appraisal.
I would advise you have a little leverage and have their attention. IE your performance is going well, they are happy with you currently. It makes the approach easier and their reaction more malleable in your favour.
If it is during a performance review that you make your move there will come a point where they ask if you have any questions and there is your chance. Or after delivering a positive progress update on your work that they are only too happy to hear then there is also a good opportunity.
When making the approach be neutral but assertive. Put them in negotiation business mode and not friendly mode. If they were that friendly, they would be offering you a pay rise already. And do not beat around the bush.
“I want to speak about getting a pay rise. My input and value to the business is important and I believe it’s time to discuss an increase to my package”.
If these lines sound uncomfortable for you then ask yourself is it because you do not like business talk or is it because they do not sound justified. The latter reasoning may mean that perhaps asking for a pay rise will do more damage than good because it is not justified.
You will know whether it is based on their reaction. What you are looking for is if their initial response is a direct or indirect agreement. IE “I agree” or “What were you thinking in terms of salary/package increase”? Either of these means you are quid’s in.
Your Negotiating Approach
You need to have a figure in mind of what you want money wise when negotiating a pay rise. 5% – 10% more than your current package is realistic. But like any negotiation always start higher. It is important to not start too high as you will look either disingenuous or unprofessional and it will show, meaning that your negotiation could go Pete Tong quickly. 15% as an increase is a sensible negotiation starting point. It is neither disrespectful nor unrealistic. It also allows some wiggle room. The best case is that you get a hefty wage hike, or the worst case is that you end up with the figure you originally had in mind.
Once you agree something get it in writing quickly. Do not rely on a verbal agreement or a gentleman’s handshake. You want it in writing via email or letter that it is agreed.
If negotiations go badly or fall on death ears, then it either means you need to adjust your expectations or change job. But bear in mind if they go badly then you may need to look for another job anyway as you may well have burned some bridges.