A low unemployment rate of 4.1% has put pressure on wages, which rose 2.8% in 2017. Increased job security and a strong economy can create opportunities to increase income without leaving your job. Asking for a raise is one strategy to put more money in your pocket.
Here are a few effective strategies to help you negotiate the raise you want.
Establish Your Worth
Know Your Value to the Company
To understand your worth to the organization, consider your position, and how it has changed since your last wage increase. Has the company downsized, developing a need for you to perform additional duties? To meet weekly or monthly expectations do you put in extra hours?
In addition to an evaluation of your workload, also consider completed training, even if paid for by the employer. New skills, training, credentials, and degrees which benefit the company and improve your performance, add value.
To help you effectively present your value to the boss, maintain a personal log of contributions you have made to the company. Consider the following:
- Have you increased sales?
- Have you helped the company save money?
- Have you decreased the level of stress for supervisors and managers?
- In what ways have you illustrated leadership?
The more details, facts, and numbers you gather, the better. Choose between five and seven of your biggest impacts to justify the request for a raise. Emails, memos, or notes when you received praise for your performance are concrete examples of high performance and your value to the company.
Creating a sense of your worth will help you quantify and justify a raise, along with giving you the confidence to ask for a higher salary or hourly wage.
How is the Company Performing?
In addition to personal performance, you also want to understand how the company is doing. Organizations struggling with sales are more likely to cut back than offer raises. Stock price growth, investor data, and personal observations can give you a better understanding of the financial strength of your employer.
How Much Are Others Making?
How does your pay compare to others working the same job? It can be difficult to learn the pay of co-workers because many employers discourage or forbid discussing salaries. However, you can use an online salary calculator to give you a ballpark of what others with your level of experience, earn in your field. The city you live and specific job functions also impact pay.
Knowing what others in similar jobs earn, can orchestrate the need to increase your pay.
When a company must recruit, hire, and train a new employee, there is a replacement cost, which increases your value. You know the company’s systems, procedures, and culture. Even when moving to a different position, you will have fewer training needs than a new hire.
Prepare for an annual review by establishing your worth and negotiating a raise above the typical cost of living increase.
It is not always prudent to wait for an annual review. Accepting a higher level of responsibility or successfully finishing a large project can provide the opportunity to request more pay. Asking in proximity to a tangible accomplishment can increase your chances for an increase because your work ethic is fresh in your boss’s mind, making your request more relevant.
Begin negotiations by setting an appointment with your boss. Do not nonchalantly discuss a raise on your lunch break, or hint at an increase in the hall. Your boss will receive a formal, well thought out request seriously.
Negotiate Perks and Benefits
A raise doesn’t always translate into more income. In some cases, your boss may not have the power to increase your wages. However, they may instead offer additional perks or benefits. These could include flexible work hours, tuition reimbursement, student loan repayment, stock options, or vacation time. Other common alternatives may be telecommuting, a higher title, or the opportunity to attend a conference at the company’s expense.
If you have an interest in specific perks or benefits, include it in the negotiations.
Actions to Avoid
- Do not compare yourself to other co-workers.
- Do not come across as greedy or cocky.
- Do not make it about you. Your boss does not care about your personal budget issues. They care about your contributions to the job.
- Do not have unrealistically high expectations. An entry level position requiring few job skills, minimal work ethic, or lack of self-motivation will not lead to a large bonus or hefty raise.
- Unless you are sincere, do not threaten to quit.
If Your Boss Says “No”
Sometimes your boss cannot or will not give you a raise, for various reasons. There could be a lack of funds, or you could earn the highest level possible in your current position, and some employers only offer raises at certain times of the year. Whatever the reason, seek to understand their position and remain professional at all times.
The conversation could lead to additional opportunities for training, which will qualify you for a future raise. It could lead to a promotion, with higher income.
Ask, “what will it take for me to get a raise?” Then do whatever your boss recommends and document your actions to present at the next meeting. Showing interest in professional growth will increase your value to the company.
If you receive an unsatisfactory outcome, you must decide your next steps. You can seek employment elsewhere, increase job skills, or do nothing.
A good work ethic is rare, and employers want to keep their best employees happy. If you are an employee who strives to exceed expectations consistently, your employer will have a strong motivation to keep you on board.