The art of negotiating a pay rise
The ability to negotiate an increase in your annual salary is a crucial skill for any career minded person.
It is at this time of year when annual reviews are often being completed that most people start to think about earning more money. While many of us believe we need to change jobs to get a decent increase in our base salary, it is not always the case. A well-planned strategy can help you to achieve your goals.
Here’s our simple and practical guide to getting the pay rise you really deserve!
Think about your timing
Asking for an increase in salary at the ‘wrong time’ is a bit of a pointless exercise. If your employer is not doing very well financially, or they are right in the middle of an important project, asking to speak about money is not going to go down too well. You need to be smart about this and find the ‘right time’ to bring this up.
For most of us, the best time to discuss a pay review is during the company’s annual performance review cycle. While many employers say, they are not linked, reviewing an employee’s annual performance and deciding on their future salary often go hand in hand. Discussing your pay during your annual performance review is also good if you have had a productive year! This should be the time of year where your value to the company is most apparent, and your stock is at its highest. Arguably no better time to ask for money!
There can be exceptions to this rule, most notably if you have been ‘over-achieving’ in your job for a concerted period of time. Assuming you are working ‘above and beyond’ the call of your role (and this has been acknowledged by your employer) now might be a good time to broach the subject of ‘how much you are really worth to the company!’
Know your market value
Knowing your market ‘worth’ or ‘value’ is often the key to success when negotiating a pay rise. It’s quite simple really: if you are under-valued (when compared to the wider market) then you have a much higher chance of being successful. If you are paid fairly, or even over-paid for your job you are less likely to get what you want.
Research is important. You need to find out where you are in the greater scheme of things. If you work for a large company, it is likely that you will have various internal data points to work with. Maybe your colleagues will be happy to share their own details with you, or perhaps the company has a very ‘transparent’ guide on levels of salary within the company. If you do rely on the former, bear in mind that people might not always be truthful and you need to validate what they tell you.
One of the best ways to find out what you are worth is to speak with external recruiters. While they might be a royal pain in the ‘Derry-air’ most of the time, this is one occasion where you can put them to good use. Go online and search for similar jobs in Cambridge to your own. Contact the agencies advertising the job and ask them for more details on the job, principally how much the company is prepared to pay. Even though they will always give you the ‘high end’ figure (to try to convince you to apply), you can still get a sense of what the real salary on offer will be. Do this with three or four other agencies and, voila, real data points on your market value.
Be clear about what you are asking for
In any ‘negotiation’ it is always essential to know what you wish to achieve from the process. In this case, how much money are you really looking for?
While you may choose not to disclose the target amount to your employer at the start of the process, you need to think this through carefully. There is no point heading into a negotiation on money if you don’t know where you want to be; otherwise, you will end up rambling and tripping over your own feet (in the review meeting) and will just look like another employee, trying to squeeze the company for all they can!
You also need to make sure that any request is both realistic and achievable. While we would all like to earn as much as we can, this comes back to value. If you are under-valued by £2-4K per annum, there is no point asking for £10K! Employers will be much more open to discussion if they think you are being reasonable.
To be successful, you will need a well-prepared ‘business case’ to support your request and, ideally, evidence of why you justify a pay rise. This is where preparation really comes in to play. Keep a record during the year of any significant achievements and, where possible, how they have had a financial impact on the business.
Mainly try to showcase any examples where you have gone beyond what is expected in your job, for the companies benefit. Just saying you have worked longer hours (than your contract states you should) for a period of time is not going to be enough. Most employees do this, and it is now an almost accepted norm of employment (not that it should be!).
As mentioned above, if you believe you are underpaid then try to base your argument on fact. Merely saying I can get more money elsewhere is dangerous and can lead to a real breakdown in your relationship with your boss and/or employer. Instead, mention that you enjoy your job and working for the company, but money is tight, and you have recently been contacted by recruiters about new jobs in Cambridge. Make it clear that you are not looking to move ‘but’ they are all offering more money, and this is something you wanted to discuss.
If you really are underpaid, yet still valued by your employer, the thought of having to replace you and cost therein is often enough to convince employers to invest more money in you, to stop this happening.
Have a plan! Start thinking about this process months in advance of actually asking the question. The more time you give yourself, the more chance you have of success. Asking for more money should not be seen as a ‘taboo,’ nor should you see it as an ultimatum. If your employer says no, this does not mean you have to leave! However, you may well be pleasantly surprised and find a welcome increase in your next monthly payroll summary!