How To Negotiate For A Pay Raise
The thought of having to negotiate for a pay raise has always struck fear in employees. I’m sure you are wondering what can you do to increase your salary and the right negotiation tactics needed to achieve it.
You will first need to understand and research on a couple of things. You need to understand your strengths, accomplishments and what you have brought to your company. This has to be aligned with your company’s objectives and generally it will be like reducing costs, increased profits, or anything beneficial that brings value to the company.
If you are unclear of the objectives and goals, with what you have brought to the company, it will be hard. Do some research, know your contributions and then you can move on to getting ready for your negotiations.
Let’s dive deeper into what is necessary and what should be excluded when preparing your negotiations. Other than your contributions to the company as mentioned above, you are one of many employees and some of your peers might be having the same targets as you.
These websites will help you in researching the average pay among others in the same field as you. They also allow you to look in more detail and compare the same roles in different company sizes. For example, a MNC usually will have a higher average salary compared to a SME. Knowing the difference in pay will give you an upper hand in negotiating what’s right and fair for you and the company.
For the most of us, when we see a $3000 salary drawn, we would expect the person to receive $3000, and the company coming out with the exact same amount to give the employee. But there are many layers to your salary that you need to understand.
Depending where you located, companies provide various benefits for their employee. This includes your 401k (Or EPF in Malaysia), medical benefits, or even retirement plans. It all depends on the regulations on where your employing company operates in and you can come up with ways to negotiate your salary that reflects back on all the extra employer contributions.
Don’t put money as your first priority in your negotiation. I used to think that way before but now as an employer myself, there are some benefits and perks that I really don’t mind giving my employees rather than just a raise in salary.
One example we can look at are allowances on top of your basic salary such as travel, phone, or even entertainment. Certain allowances are tax exempted, and it can vary by countries and companies but in general, if certain allowances have tax exemptions, this can be used as a strong point to increase your salary through allowances as this will help the company save money in terms of contribution and taxes, and works the same for you.
So while it might be different depending on where you are from, keep this in thought. Research on what are exempted from tax, what benefits your company’s offer, and how you can turn that into not just your advantage, but to your employer as well. Because at the end of the day, your negotiations will need to show that you are able to provide for the company and for them to reward you fairly.
You might have already known the details necessary and have completed your research, but when would be the best time to pitch it to your employer?
The first thing you need to understand is to not just jump into it. Its best to wait until you have completed your first year in the company and wait for your annual review before negotiating your salary. During this time you should also know if you have proven yourself and achieving your goals in the company because you won’t want to be asking for a raise if your performance does not meet the expectations to begin with.
Having the right moment will really help you in improving your success rate. For example, if you are a salesperson, the best time time to ask for raise is if you exceeded your expectations, closing a big sale, and bringing in extra profit to the company so it can be used as a strong justification for your request.
Another thing you need to do is to be professional about it no matter the outcome. Schedule a meeting with your boss, and start off by sharing your progress and what you have done for the company before asking for the raise. Things will not always go your way and your boss might say that they are unable to provide a salary increase that you are looking for.
You might think that this is the end of your effort but believe me it’s just the start. Keep the conversation going, and question what does it take for you to get a salary increase, or even taking up higher roles or responsibility to be able to justify the raise. You will be picking up new, and more roles during your time working, and by understanding what your boss is looking for and with you showing interest and determination, it will have a positive return for you even if you failed to get a raise from your boss.
After working towards the goals mentioned above and achieving it, there’s no reason your boss will turn you down for a promotion or a raise. But even if you get rejected, because some bosses can just be hard to get a request like this out off, maintain your professionalism and don’t take the rejection too hard on yourself.
There will always be opportunities around you and getting rejected doesn’t mean you won’t get the pay you deserve down the road.
If you have any thoughts or experience you wish to share please do so in the comment section below.
Check out our other article on the differences between an employee vs employer mindset.
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