After we looked at how to negotiate your starting salary, let’s talk about raises now. There’s much more to negotiating a raise than you’d think. Take a guess: it’s again all about preparation, but of a slightly different kind.
Self-Marketing Lays the Groundwork
If you plan to negotiate for a raise, you need to do some pre-work. Apart from the obvious prerequisite of you achieving or better exceeding your goals over a longer period of time, you need to know that there are other important factors that will influence whether you can successfully negotiate a raise or not.
Amongst the top 5 things to promote your career, self-marketing is the most important one for getting a raise. And be assured, self-marketing isn’t talking about how great you are all the time. There are other aspects to it too.
You need to know that the business world is not all about performance and results. It’s also majorly about how you present yourself and your results. You might achieve perfect results but if no one knows that you exist or that you achieved them, it’s not going to help you get a promotion.
You and more importantly your work needs to be seen. An easy way to do this is to keep your manager informed about the progress you’re making and about the milestones you’re achieving. Another aspect is active participation in meetings, asking questions, sharing your point of view, showing interest and, of course, providing value.
Basically, make sure that your boss knows who you are – not only your name but which kind of person you are. Your boss needs to know that you are someone who accomplishes things before you even start negotiating. It shouldn’t come as a surprise at the negotiating table.
Increase Your Value
If you know or feel like the value you provide isn’t enough to deserve a raise but you really want or need one, you’ll have to take active measures to increase it.
Sometimes that means increasing your productivity or competence level, for instance by furthering your education level. Sometimes it means increasing your standing in the eyes of your employer by making sure they actually know who you are and what your achievements are. These steps will give you vastly better cards when it’s time for negotiation.
If you ask for a raise, it will most likely need to be approved by your boss’s boss. If this person doesn’t even know who you are, that might be an issue. You’ll have to rely exclusively on your boss promoting you and your achievements in a way that will convince the higher management to approve the raise.
Not every manager will fight your case, especially if they are heavily challenged by their managers. If those managers know you however and know how you perform, it’ll make the job so much easier for your boss to justify your pay raise. So make sure you get exposure to the right people.
Getting a Raise Is Not About You
The fact that you’re having a baby or want to buy a house is no selling point for a raise. While your boss will understand that these are situations in which you need more money, this is not an argument to justify the raise to higher management. Your private life doesn’t really matter to the company – as hard as this may sound. The company is not getting any benefit from that.
The same goes for the argument that your colleague makes more than you. Many companies will use raises as incentives. So if you perform well, you get a raise.
Maybe your colleague performed better than you in the past and that’s why they got the raise. Maybe they simply market themselves better and that’s why the management perceives them as high performers. Whatever the truth might be, don’t use that as an argument. That just makes you look jealous.
Getting a raise is all about the value you created for the company in the past and will create in the future. The management must recognize your value and how they will benefit from you getting a raise.
Preparation is everything in salary negotiations, no matter if you’re just joining a company or already working there for a while. Prepare concrete arguments for why you deserve this salary.
You need concrete examples of the work you did in the last year or even better, in the last few years. Value creation is not a one-time activity but a long term process. Hitting your target once isn’t enough to get a raise. It’s what the company expects from you and why they hired you. Only if you generate value consistently over a certain period of time, you can bring up the topic of a raise.
Ideally, come up with concrete numbers that clearly show how you created value for the company, e.g. you increased productivity by x%, you made x amount of sales last year, you brought in x new customers, you finished a project before the due date, you’re exceeding your career goals every month, etc.
This will clearly show your boss which value you have for the company. You can also go one step further and make a proposal for how you’ll help the company to compensate for the raise they give you.
The Cost of Hiring Someone New
It’s also important to know that it is usually quite expensive for the company to find a replacement for you. Just think about the cost of advertising the position online or in newspapers, the amount of time which HR and hiring managers spend reviewing applications, leading interviews, the time it takes to train a new candidate, the reduced productivity of a newbie compared to an experienced employee…
All these are things to keep in mind. You can also bring them up in your negotiation. However, I only recommend you do that if you’re actually prepared to give your notice in case you don’t get the raise. It might come across as a threat and that is usually not a clever move in a negotiation. You might maneuver yourself into a corner where it’s hard to get out again.
Now it’s time for you to take action and take your future salary in your own hands. Get going with your prep work, so that you can confidently address your request with your boss or new employer.