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Negotiating a pay rise
Written by - Jacaranda Team
October 5, 2015â 8 minute readâ
Maybe your salary is falling behind market rates, or maybe youâve gone over and above your job description and delivered quality work beyond your employerâs expectations. Either way, youâre starting to realise that youâre worth more than your remuneration reflects. It may be time to discuss a pay rise.
But like so many people before you, youâre putting off the nerve-wracking negotiation. You donât want to come across as entitled and bratty, and youâve been hoping all this time that your boss will notice your diligence, and you wonât have to make the first move. But you know thatâs not going to happen, because even if your boss has taken stock of all your achievements, theyâre not going to pull money out of their own pocket (or the companyâs) if they donât have to. If you donât ask for it, you often wonât get it.
So what do you do?
Asking yourself a few simple questionsâand doing a bit of researchâwill help you to carve a path to a good result, and prepare you for the journey that you know you have to take to get where you want to be. Know why you are really asking
If you think you deserve a pay rise based purely on the time youâve spent with your company, youâre wrong. As long as your position is paid at award rate, and is in line with the cost of living and inflation, your organisation doesnât owe you anything extraâyour position could just as easily be filled by someone else who is happy to do what that job requires, and nothing more.
To justify your pay rise, you need to be sure that youâre valuable to your company: that your achievements, responsibilities and success are worth more than that of anyone in your position, and that youâre just bringing your income into line with what you deliver. But itâs not just about what you have done: itâs about what youâre going to do, even if itâs not a promotionâthat your potential for excellence in the future of your position is worth investing in.
What is your pay rise going to achieve for you, besides more money? How is it going to benefit your employer, and how does it relate to the vision, goals, mission and values of the company? Get the answers to these questions straight in your mind, and youâll know where to begin your research.
Know what youâre really worth.
Your success in negotiating a pay rise depends mostly on the hard truth. It would help if you did your homework to determine that what youâre asking for is reasonable and to make sure you can prove it.
Know what you’re really worth.
Research the industry salary ranges for your position, and collect evidence to support the figure you come up with. Youâll find a lot just in advertisements for similar positions, but you could speak to other people in your field or consultants in recruitment. Finding a disparity between your salary and the market average is good leverage, but donât be disappointed if your position is paying on paper what itâs supposed toâif you can prove that you deserve a pay rise based on your individual performance, you can still ask for it.
But if youâre going to have an excellent chance, your research still needs to go deeper. What are your individual skills worth? Are your professional qualities, experience or achievements in high demand, or valued higher in other positions? What have your individual successes, or your departmentâs shared successes, achieved for the financial and general benefit of your company?
Answers to these questions will arm you with evidence to support your argument. Plain facts on paper are hard to disputeâand if your pitch doesnât go well, you and your employer will still know the truth, and it will be beneficial for you later on.
Know when itâs the right time
Itâs been a hard couple of years, and the economy has taken a few big blows. You should have done enough research to be sure that your company isnât under financial stress, and can actually afford your pay rise: if your boss or the company CEOs are being transparent about cutbacks and financial reviews, youâd better wait until the company is back on its feetâyou canât get blood from a stone, and youâll come across as inconsiderate.
But on the flip side, you donât want to look like youâre replaceable. Failing to speak up could mean that you put yourself on the chopping block: if it comes time for redundancies to be handed out, your employer should know that youâre too valuable to their future to be let go and too hard to replace. And if the competition can afford it, and are paying people in your position what youâre asking for, this could work in your favour (but be careful with this information: ultimatums and disloyalty arenât likely to amount to more money for you).
The end of the financial year might also be the right time. Most organisations are busy with their budgets in the month or two before June 30 and are allocating money for recruits, training and development, and pay risesâso they will have already determined what is reasonable, and what theyâre obliged to pay, and might be more receptive to your request.
Know what you can expect
The last piece of research you need to do to be prepared to negotiate is into your companyâs pay review process. Your employer might not accept pay rise requests based on performanceâthere is a growing trend for employers to separate their pay reviews from their performance reviews. If itâs in your employment contract, you might have to wait until the review is scheduled to talk about your salary. Some companies will conduct pay reviews automatically on employment anniversaries, or annually, to keep their salary packages fair and in line with national award rates. But, generally speaking, you should have a pay review annually, and if you havenât had one in several years, youâre definitely entitled to askâor look for a fairer employer.
And sometimes, unfortunately, your company is genuinely unable to finance your pay rise. If this happens, you can request another pay review after a period of months, or you can consider accepting other rewards instead of a pay increase. Your boss might have a budget available for training courses, office equipment and resources, or additional annual leaveâall of which will benefit you, and demonstrate your companyâs acknowledgement of your value, even when they arenât able to increase your salary.
Know the right way to do it
Once youâve researched your companyâs pay review process, youâll know what you have to do next. Generally, that will be a written pitch detailing your argument, which you should supply to your bossâand which you will have comprehensively memorisedâbefore you attend a pay review meeting. Apart from convincing our boss that you deserve your pay rise, thorough documentation of the request serves another purpose.
Depending on who you work for, thereâs a good chance that your boss will have to justify your pay rise to their own boss, or even ask permission to give it. Setting out your request logically, articulately, and concisely can only increase your chances of success. And now comes the scary part. But hopefully, youâre on good enough terms with your boss that you can approach this task without being too nervous; after all, theyâve read your request, so the interview is just a formality where you discuss the terms of a new arrangement.
- Donât be afraid to make the first offer: you might get what you want, or your boss might renegotiate somewhere in the ballpark. Either way, youâll both know where you stand. And it might sound sneaky, but if you use an odd or especially particular numberâlike 97,650 instead of 97,500âit sounds more legitimate, and your employer is more likely to believe that youâve arrived at the figure through detailed research and comparisons.
- Talk about your priorities and concerns: anticipate possible reasons your boss might refuse your pay rise, and discuss them along with your sound arguments for why you deserve it anyway. It will show your boss that you have thoroughly thought through your proposal and that you are broad-minded enough to view your position in terms of the overall well-being of the whole organisation.
- Donât just focus on your past achievements: from your bossâs perspective, will you stop delivering once you have what you want? Talk about how your pay increase will help you to deliver even more for your company than you do now, and the incentive it will give you to achieve even greater success.
- Be assertive, but not demanding: be flexible and willing to negotiate the terms of the pay rise (or non-financial rewards), but assertive and firm on leaving there with something you deserve. Walk the fine line: being self-assured and resting on the firm truth will forward you respect from your bossâbut dropping ultimatums that you will leave over it will result in either you looking for a new job, or souring the working relationship even if you get what you want.
Know how to move on from âno.â
Unless you really are ready to walk out the door, keep your emotions in check: if youâre refused your pay rise, say you understand and thank your boss for giving you time to discuss it. No now doesnât mean no next timeâyou may well be able to resubmit the request in 3, 6, or 12 months, but if youâre aggressive and confrontational, youâll ruin your future chances. And even if you do leave, youâre better to leave with your bossâs stellar recommendations than empty-handed.
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Ask honestly for the reasons why you were refused. If your boss sees that you can accept constructive criticism and rejection with grace, theyâll view you as understanding and humble, and see that youâre committed to maintaining a professional relationship with your company over the long term. Asking for the reasons will also let your boss know that you are confident, willing to improve, and open-minded, and it will give you knowledge that you can use to your advantage next time.
Itâs not something that anyone wants to do, but negotiating your pay rise might be the best career move you could make. Who knowsâyou might even be successful. But even if youâre not, youâve learned a lot about yourself and your company, which will steer you new directions and pave the way to real successâwith them, or without them.
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Written by Jacaranda Team