A primer on how to ask for a raise
Be prepared to show your value and focus on the long term
I’ve given out hundreds of raises, and I think I’ve seen every possible mistake people make during this process.
Everyone should be paid fairly according to his or her skills, experience and contribution, but many people have no idea how to smartly negotiate for a raise. Here is a simple guide you can use to help secure a raise:
Always make it a win-win
Most people don’t tie their raise request to the value they bring. They treat raises as a foregone conclusion — “It’s time for a raise, so I should get one.” Framing it that way makes it all about you. Your best bet is to connect what you’re doing to the company’s most critical metrics.
If a project you led or contributed to netted $200,000 in revenue for the company, point to that. Using specific figures clearly shows how valuable you are, and your employer will want to keep you happy so you’ll stick around.
Catch your manager at the right time and place
Timing is crucial. If you approach your manager when he or she is stressed out or in the wrong head space, you may get a firm “no.”
Use data in your negotiation
Have the facts on your side. Be able to have an informed conversation with your manager during which you can show what the market compensations are for your position. Break it down by location, years of experience and the size of the company. And use a Fair Pay Report to make it about the facts.
Be honest about whether you have leverage
Here’s a simple rule of thumb: If you were to leave your company tomorrow, would there be any meaningful disruption to the business? If the answer is no, you don’t have any leverage to get a raise.
Take an honest and objective look at your value to the business and negotiate accordingly. The people who are most vital and crucial to the organization often don’t realize it, while other team members overplay their hand.
Don’t box yourself in
When it comes to the actual negotiation, don’t automatically go for a high amount. Keep your expectations vague and let the company to make an offer. You then can counter from there.
Think about it from the employer’s point of view
If you’re more understanding of the company’s needs, you’re going to have a better chance of achieving your goals. You may be underpaid versus the market, but the company may not be in a financial position to pay you your market value.
Instead of trying to negotiate a salary increase immediately, say to your employer: “I know I’m not in a position to get a raise right now because the company doesn’t have money, but if and when the company raises $X more, can we agree to raise my salary to X?”
By being aware of the company’s needs, you may be able to get what you want later.
Don’t make your raise all about compensation
There are going to be times when a company can’t or won’t give you more cash, but that doesn’t mean you can’t get other benefits.
Consider asking for more equity, more vacation time, new responsibilities, a better title or more flexible hours. Be fluid in your negotiations.
Don’t surprise your boss
Employers will generally hold yearly, bi-yearly or quarterly performance reviews. As an employee, set the expectation that you want to talk about compensation at those meetings. In the weeks leading up to that talk, speak with your manager to make sure you’re meeting expectations.
The conversation about your salary should not come across as a surprise or an ambush. Give your boss or manager time to think through and prepare how to handle the raise request.
Negotiate a bonus instead
Employers know that salary information somehow is going to get out. That’s why they’re sometimes reluctant to raise an employee’s salary — they don’t want to create tension in the workplace.
When it comes to bonuses, however, employers tend to have more flexibility.
When joining a company, consider asking for a signing bonus. A company may not be able to pay you the salary you were hoping for, but a $10,000 signing bonus, for instance, may be in the cards.
Avoid being penny wise and pound foolish
One of the biggest mistakes people make is that they look for the opportunity that will pay them the most now instead of the opportunity that will help them earn dramatically more later. When you’re 23 years old, whether you get paid $42,000 or $46,000 isn’t going to make a huge difference over the course of your working life. Most workers typically hit their highest earning potential in their late 30s to early 50s.
Bottom line: Don’t get blindsided in the short term about making a lot of money if it’s taking away from opportunities that can position you for longterm success.