Whether you need to negotiate a salary for a new job or ask for a raise from your current employer, it’s a scary thing to do. In fact, most employees are afraid to broach salary negotiations with their bosses. As a result, many employees are being grossly underpaid.
Make sure you’re being paid what you’re worth based on your skills, education, experience, and job responsibilities. If you feel you’re undervalued, it’s up to you to take action and open a salary negotiation conversation with your boss. Unfortunately, most bosses won’t take a stand and demand that their employees get raises, and few companies are willing to ensure all employees are properly compensated.
You need to be your own advocate, hype your accomplishments, prove your worth, and ask to be compensated accordingly. Here are 10 steps to help you negotiate a salary or ask for a raise and actually get it:
1. Know Your Environment
Salary negotiations involve more than just you and your supervisor. They’re also affected by a variety of internal factors within the company as well as external factors in the company’s industry and the general economy. That means you need to do some homework before you ask for a raise or walk into an interview that might include a salary negotiation. Some of the micro- and macro-environmental factors that could affect the salary you can reasonably ask for include:
- The state of the economy
- The unemployment rate
- The state of the industry and demand for products and services within the industry
- The company’s performance in recent years
- The company’s future goals and performance expectations
- The company’s need to fill the position (if you’re applying for a new job)
- The budget to compensate the person in the position or within the department where you work or hope to work
- The other applicants for the job or the depth of the applicant pool (if you’re applying for a new job)
2. Do Your Research
Never walk into a salary negotiation before you do your research and fully understand what other people in jobs similar to yours or the one you’re applying for are making in your local area. If you belong to networking groups or social networking sites like LinkedIn, ask other people in your industry to share their knowledge of the going rate for your position and skill level. You can also use online salary calculator tools and resources on sites like CareerBuilder and Salary.com to compare average salaries on a local level. This information is critical because you can’t negotiate a salary or raise if you don’t know what the going rate is.
3. Evaluate Your Knowledge and Skills
What skills do you bring to the job? Do you have any unique or in-demand skills that would be hard for your employer to replace or for a hiring manager to find in another candidate? If so, you can demand a premium on your salary. If you’re negotiating a raise for your existing job, consider any additional education or training you’ve received since you began the job. For example, if you’ve completed specialized training, obtained certifications, or received a degree since the time you were hired, then you deserve a salary increase.
4. Analyze Your Responsibilities
If you’re asking for a raise for your current job, have you added responsibilities to your daily workload that you didn’t have when you took the job? If so, you should be compensated for them. If you’re applying for a new job, analyze the responsibilities of the position and make sure you know what the going rate is for someone who has the skills and experience necessary to handle those responsibilities before you go into the interview. The more information you have, the better positioned you are to discuss your salary and get what you want.
5. Create Your Case
Think of salary negotiations as building your case. Just as a lawyer builds a case and needs to prove that case to a jury, you need to build your salary case and prove why you should get that salary or pay raise to your supervisor (or the appropriate decision-maker). The key word is prove. You must prove that you should be given the salary you demand beyond a reasonable doubt, or you’ll have little chance at winning. Therefore, you need to gather a great deal of information that is quantifiable and based on facts, not opinions, hearsay, or subjectivity. Use this data to show off your accomplishments. Information you should discuss includes:
- Goals you met
- Responsibilities you handled
- Money you saved the company
- Money you made for the company
- Time you saved the company
- Expectations you exceeded
- Problems you solved
- Experience you gained
- Education you gained
- Credentials you gained
6. Time It Right
It might seem like no time is the right time to negotiate a salary or ask for a raise, but certain times are better than others. When you’re asking for a raise for your current job, time the conversation to occur right after a big project is successfully completed. Also, approach conversations on days of the week or month when your boss is less stressed. Finally, be sure to schedule a meeting to discuss your salary rather than springing the conversation on your supervisor without warning.
7. Consider All Parts of Your Compensation Package
Remember, salary negotiation doesn’t have to be just about money. There are other things that go into your compensation package, and some of those things can be included within your salary negotiations. For example, time off, telecommuting opportunities, bonuses, and so on are all perks that might be just as valuable to you (or more so) than money.
8. Be Prepared for “No”
Unfortunately, it’s highly likely that the response you’ll get from your request for a specific salary or raise will be denied. That doesn’t mean you should give up. Instead, ask to schedule a salary re-evaluation meeting in six months and ask your supervisor to help you create a written set of specific goals and steps you should take during the next six months in order to earn a raise. Make sure you get this “career development plan” in writing. Giving the plan a name like “career development plan” makes it seem like you’re less interested in money and more interested in growing with the company. Money is a touchy subject, so reframing your salary negotiations like this could give it the positive spin your boss needs to support it.
9. Don’t Show All of Your Cards
If you’re interviewing for a new job and the hiring manager asks what salary you expect, never give a number. Avoidance is key to salary negotiation success at this point. Instead, turn the question back on the hiring manager and explain that you’d expect to be compensated competitively based on the responsibilities and industry. Then ask him or her to share the salary range budgeted for the position. They have a number that they need to work with, so make them show their cards first.
If they ask you how much you make at your current job, be sure to include your total compensation package (including bonuses, benefits, and so on), and respond honestly by saying, “My total compensation package is $x.” Don’t give details other than the total dollar amount you’ve calculated for all parts of your salary and benefits.
On the other hand, if you’re negotiating a pay raise for your existing job, you should have a reasonable dollar amount in mind (based on your research) and state it. Never low-ball your salary request but do be realistic in your demands if you want to be taken seriously.
10. Don’t Threaten
It’s never a good idea to threaten that you’ll leave the company or give any other kind of threats during a salary negotiation. Unless you’re 100% committed to following through with those threats, they’re more likely to backfire than help you. Threats instantly put the person on the other side of the negotiation on the defensive. No one likes to feel like they’re being threatened and many supervisors don’t like to feel like their position of power is being undermined. A threat or ultimatum could speed up the destruction of your salary negotiations faster than you think. Build a strong case and prove it instead.