Successful salary renegotiation is a complex, multistep process that takes time. Just like anything else, there is a right and wrong way to approach it. Employees who walk into their boss’ office and ask for more money leave the meeting empty-handed and afraid of losing their job.
Roughly 70% of the job seekers whom I encounter are currently being paid less than they are worth and most could successfully renegotiate their pay. Yet, the overwhelming majority avoid doing so because they don’t know their value and / or envision salary negotiation as highly stressful and contentious conversation.
It doesn’t have to be. If approached in a methodical, savvy manner, asking for a raise is rarely contentious and is often successful. Consider the following tips:
1. Measure your value using the same metrics as your employer will use. One of the more frequent mistakes made is that they use competing job openings in order to determine value. This valuation holds less merit than many think. Mainly it fails to take into account human nature; people are most concerned with themselves.
In order to determine whether your request will be met with agreement and how much to ask for, you’ll value what is most important to the employer: (if a hiring manager is smart, this is what they’ll think about)
a. The demand for your job. The more people who want your job, the less leverage you have at the negotiation table because the more confidence your boss will have in letting you go.
b. The difficulties that the company or division (as well as your direct boss) would endure if you left. For instance, when a sales rep. leaves, a company has to notify both current and prospective clients of the personnel change which often is a highly unpleasant activity.
c. Company recruiting capabilities. In most instances, firms with robust recruiting efforts are less likely to agree to high salary increase demands. If your boss is going to have to spend countless hours digging through resumes themselves, then they are more likely to agree to your raise.
d. Company profit margin. Revenue generation is only half the story. Estimate how much of each dollar brought in is retained by the company and how much goes to their operating expenses.
e. Company cash flow. Companies are just like people. When they have cash, they are much more confident in spending.
2. Take the time to view the conversation from your employer’s perspective. In order to be persuasive, it’s necessary to step outside of your own shoes and begin to see the world as your boss sees it. The more you say the phrase of, “I want.” The less you chance you have of reaching your goal. Instead, talk in terms of their needs. Taking the time to do so will aid you in formulating a more convincing argument and will help you anticipate rebuttals.
3. Draw out a logical argument as to why you’re asking for the raise. It’s in your best interest to focus on past performance and future potential. If you attempt to leverage possible job offers (or use competing job openings), your negotiation may be perceived as a threat.
4. You’re in control only if you make your boss feel they are in control. People don’t respond well to pressure. Although you may want a decision made on the spot, he or she won’t respond well to pressure.
It’s both fair and in your best interest to give your employer time to think about your request. Conversely, leaving it open-ended is not advantageous, either. Kindly asking, “Does a week give you enough time to assess everything?” allows you to set a relatively firm deadline without being contentious.
5. Know how to use time to your advantage. Make a request for the meeting via a respectful email. Doing so is advantageous for a multitude of reasons. First, you show respect your boss’ time (when people feel you don’t appreciate their time, they are less likely to be persuaded by you).
You also receive a focused audience. Remember, you are there to discuss a raise not compete for your boss’ attention. Each time that person diverts their attention to an unrelated call, text messages or email, you become less persuasive. When it comes to time of day, most individuals are more readily persuaded in the afternoon hours. Mental fatigue depletes willpower.
In the End
People who know how to negotiate are paid more for no other reason than they know how to negotiate. Just like in anything else, proper preparation and intelligent execution yields results.