Published in: Banks | April 2, 2019
How to Negotiate a Raise in 7 Steps
By: Lyle Daly
You don’t need to be stuck at the same salary anymore.
Image source: Getty Images.
There comes a point in just about everybody’s career when they need to negotiate a raise. After all, the best way to improve your financial situation is to make more money, and the two ways to do that are to either get a raise or find a higher-paying job.
If you like where you work, then you’d probably prefer to stay there over finding someplace new. Negotiating a raise can be tricky, but when you know how to do it, you have a much higher chance of success.
1. Research the salary range for your position
To know how much you can realistically ask for, you need to know what the salary range is for your position. Fortunately, thanks to the internet, this information is much easier to obtain than it used to be.
Check out a few pay scale sites to pull up average salaries for your position. Make sure that the sites you use also account for your location. Salaries for the same position can vary quite a bit depending on where you live.
2. Make a record of all your successes at your current job
If your only justification for a raise is, “I want more money,” you’re going to get the typical response of, “Sorry, that’s not in the budget.” You need evidence of your value as an employee. Depending on what you do, this could be:
- Performance reviews
- Positive feedback from management, clients, or customers
- Additional responsibilities you’ve taken on
3. Set your target salary
After you’ve researched the salary range for your position and reviewed your own performance, you can use that information to decide on a target salary. If you have the experience and you’ve been a top performer, then you can aim toward the high end of the salary range.
While you don’t want to ask for an outrageous amount here, it is good to aim high. It’s better to ask for more money and have your employer offer you less as a compromise than to ask for too little and miss out on thousands of dollars per year.
4. Consider other benefits you’d accept as an alternative
There’s no guarantee your employer will be amicable to your raise request. Even if they are, you could end up unable to settle on a number.
In situations like that, it helps to have some alternative benefits you may accept in lieu of money. Here are some examples to consider:
- The option to work from home for one day or more per week
- Different hours or a more flexible schedule
- More paid time off
- Stock options
5. Prepare what you’ll say with mock negotiations
The best public speakers practice often before a speech, and if you do the same, you’ll be much more confident and prepared when you ask for your raise.
Start by outlining what you’re going to say to your manager. For example, you could break your request down into three parts:
- Your accomplishments -- Go over the positive feedback and metrics you collected earlier to demonstrate your value.
- Your plans to help your employer -- Explain what your future plans are to benefit your company.
- Your raise request -- Present the salary range for your position and tell your manager you’d like to increase your salary to $XXXX per year/hour.
Once you’ve prepared that, you can set up mock negotiations with friends and colleagues to get more comfortable. Make sure that they throw some objections your way so that you can learn how to handle those as well.
6. Pick the right time for your meeting
Timing is a big part of getting a successful raise. If you meet with your manager when they’re under the gun or you ask for a raise after a round of layoffs, you’re shooting yourself in the foot.
The ideal time for a meeting about a raise is when your company is doing well and after you’ve demonstrated what a valuable employee you are. For example, if you recently took on a larger workload or led a successful project, it’d be perfect timing to talk about a raise.
7. Meet with your manager
With all the prep work complete, it’s time for the moment of truth. Schedule a meeting with your manager, and when you meet with them, dive into the request you prepared earlier.
The best-case scenario is that your manager approves your raise request right away, but more often than not, it doesn’t go that way. Be prepared to work around any objections they have. If they say there’s no money in the budget, you can propose the alternatives you thought of or ask when there will be money for your request.
You may not get an immediate bump in pay, but if you stick to your guns, you should at least get a strong idea of what your employer can do for you and when they could increase your salary.
What to do after a salary negotiation
The goal for a salary negotiation is that you get a raise or other benefits that you’re satisfied with. If you do get an increase in pay, make sure that you use it wisely. You could:
- Put it in one of the top bank accounts to earn interest and save for the future.
- Increase your 401(k) contributions.
- Open an individual retirement account (IRA) to increase your nest egg.
What if you weren’t successful getting a raise? If your employer seemed open to it but just couldn’t accommodate your request immediately, then you may want to give them time and revisit the subject later. If they completely shut you down or you feel like you’re not getting what you deserve, then it could be time to look for a new job.
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