- Negotiating a salary can be a daunting prospect for many individuals, but it’s an important part of maximizing earning potential and career growth.
- The article provides a template and tips for negotiating a salary effectively.
- The template includes several key elements, such as opening with a positive statement, highlighting relevant skills and experience, and providing specific salary expectations.
- The article also provides several tips for negotiating effectively, such as:
- Do research on industry and job-specific salary ranges to have a realistic understanding of what to expect.
- Consider other aspects of the compensation package, such as benefits, vacation time, and opportunities for professional development.
- Practice active listening and be open to compromise to reach a mutually beneficial agreement.
- Follow up after the negotiation to express gratitude and solidify the agreement.
- The article emphasizes the importance of confidence and preparation when negotiating a salary, and provides guidance on how to navigate difficult or unexpected situations.
Negotiating your salary when you haven’t got any leverage can be incredibly uncomfortable but it doesn’t have to be.
If you’re in the majority of people who look at what their preferred life costs are to understand whether they can (or can’t) justify taking a job; you need to listen up.
Your company doesn’t care what your lifestyle costs, what inflation is, or what your financial goals are. What do they care about? The bottom line; keeping their shareholders happy and serving their customers. If they’re a great employer, they recognize that keeping you happy too is vital to them but at the end of the day, their goal is to make the most profitable use of the labor they employ one way or the other. You are responsible for yourself.
What this article will show you is exactly how to get that raise that you’ve earned (but haven’t been offered yet). We’ll also give you a template of how to phrase it and close the deal. Let’s go.
How to be sure you’re not mistaken about the value of your labor (because we don’t want to ask for a raise that we think we’ve earned but be mistaken)
Step 1. You’ve benchmarked yourself.
Without understanding what the market is willing to pay for anything, it’s hard to know what price is appropriate. If people aren’t willing to pay $X for something, then the price will fall to what they are willing to pay. This is called supply and demand and the same principles apply to the value of our labor.
To understand the value of our labor, we must understand what the market is offering today for the skills we’ve proven to have. How do we do this?
- Glassdoor for the wages of similar roles at close competitors to the company that employs us. Are the wages higher, lower, or similar to what you’re paid? If they’re higher and you believe your labor is worth the same as the higher wages, move forward.
- Payscale.com -> “Price a Job”. Payscale is software that employers use to verify how much a prospective candidate’s labor is worth. This occasionally can give you a behind-the-scenes look at what employers see when they consider what they should offer you.
- If you’re a software engineer, check out Levels.fyi to verify if your pay is in line with your skills and this can give you more up-to-date data on pay.
- Lastly, if you’re serious about doing an analysis (enough so where you’re willing to pay for perfect data), shrm.com provides a thorough, real-time analysis that costs $220 and in exchange, it prices your labor for the job you’re applying for as accurately as we’ve seen.
- Not sure how to do this analysis? At Progress Wealth Management, we do an annual compensation analysis for all of our clients to ensure they’re getting paid what they’re worth. If you’d like help, schedule a complimentary consultation today.
2. Verify that you’ve Added Value to the Company
The unfortunate truth is, that not everyone is deserving of a raise. If you employed someone who had a lot of experience, education, and related designations so on paper, they were worth more… but in reality, they were lazy; would you offer them a raise? I wouldn’t. I’d say “Oh you want a raise? I’d love to give you one but you need to work for it. You were offered the salary you want at my close competitor? Great. Go be lazy for them for a higher salary. That’s a win for me.”
A great idea is, to ask your manager if they’re open to a 1v1. In that 1v1, preface it by saying that you’re trying to strategize how to get a promotion or a raise and you’d love their help. Ask if they’re open to it. Assuming they say yes, ask them if they could be honest with you and tell you on a scale of 1-10, how they’d grade your labor. Depending on their answer, ask them what you can do to improve it to a 10. Don’t get offended if they don’t give you a high rating.
If their answer is anything below a 6, you probably aren’t worth a raise. Better get back to work.
3. You’ve Taken on New Responsibilities Since Your Last Raise
If you’re among the many of us who, given the lack of qualified employees, have been asked to learn new skills and be cross-functional for your employers… your labor now has more worth to them. You’re becoming a jack of all trades and one step at a time, your resume is becoming more and more valuable. It’s worth considering the additional value you create for your employer as a jack of all trades and the fact that they aren’t just at risk of losing you to competitors but also to you going out on your own. Fiverr, Upwork and Toptal are surprisingly easy lead sources for tech professionals. They’re expensive but definitely can give you a consistent stream of business.
4. Your Skillset Is in Demand
Are you a coal miner? Probably not a hugely in-demand skillset and lack much negotiation power. Are you a talented UX Designer with a decade of experience and an MS in Computer Science? You probably have an incredibly marketable resume and should probably reconsider your pay, equity package, benefits, work-from-home potential, work-life balance, and job satisfaction, and ensure you enjoy working with your coworkers.
5. Your Performance and Pay Haven’t Been Reviewed in a Long Time
Work hard every day and your manager hasn’t talked with you about a raise or reassessing your pay in over a year? Inflation happens and if you’re not getting a raise, you’re getting a pay cut because your dollars won’t go as far as the cost of living goes up. Groceries, gas, utilities, taxes, insurance and all get more expensive as time goes on. Your salary needs to increase with them.
HOW TO START THE CONVERSATION
One of the most important concepts to understand as you’re building your career plan is to figure out how to make your boss’s boss happy. If you can strategize more effectively on how to make your boss look good to their boss; you become more valuable to yours.
Start with the positive things.
You probably bring a unique combination of skills to the table. Even if you’re an entry-level employee and the most impressive part of your resume is that you were an SEO intern for a failed startup, you still should be making sure you’re both getting excellent training and paid well enough to afford to live. As a result, there are a few best practices for negotiation we should all remember.
Like all strategies for persuasion, the first concept to remember is to know your audience. If your manager is someone who’s more “old school” and traditional, it’s important to show reverence and appreciation above all else. Some great signs of this might be, an appreciation for order and doing what you’re told over trusting yourself to figure things out on your own. If this is the case, make sure you’re genuine as you explain the following things:
- What you’ve learned so far.
- Who you’ve learned from.
- What this company brings to the table for you.
- How grateful you are to work for this company.
…and now you’ve set the stage for an appropriate ask.
And now you’ve set an appropriate table for an earned ask.
What you should AVOID saying
This shouldn’t be a conversation all about you, your financial needs, or goals at all. Remember, all persuasion is focused on giving the person you’re trying to persuade what they want AND that you’re the right person to give it to them. What do employers want? Do they hope someday to help you afford all the riches in the world? Not.
What they want and why the heck they’d be willing to consider giving you this raise is:
- Someone they can trust will be loyal, and obedient because they love the company and love what they do.
- Someone who’s consistently putting effort into meeting the growing needs of the organization.
The best way to prove that is to, explain emphatically and genuinely the items listed in the prior section.
If, instead, you tell them about travel goals, the cost of living, the cost of your kids, credit card debt (etc.), you will fail. Don’t fail.
HOW TO SPEAK TO YOUR VALUE
This isn’t talking about your skill in things like cooking (unless you’re a chef) or skiing (unless you’re a ski instructor). We’re talking about skills that align with the current and future needs of the organization that will make your boss (and boss’s boss) jobs easier today or down the road.
If you’re negotiating an original offer
Remember, most employers will typically want data if you’re challenging the pay they offer you if you’re trying to prove that they’re wrong.
SHRM provides very good data for this kind of negotiation. A sample of their analysis is included here.
You might want to prepare by asking yourself questions like:
- What are the requirements of the job you’re being asked to do?
- What is the expected reasonable salary range for jobs that require the same things that your job does?
- Are the benefits, work-life balance or any aspects of your job make your job more pleasant that cost the company money? Would you be willing to sacrifice those for more of something else?
- What about your resume and background make you particularly qualified for jobs like this?
Get your references and performance reports prepared. These might be prior managers, people you trained, and coworkers you’ve added along the way. Why? Managers want to hire and retain people they can count on, that get their job done and are reliable. Your job in negotiating is to explain to them what you’ve done, how reliable you are, and how valuable you are for the company to bring on board.
By providing the analysis, references, performance reports… you can prove with certainty how much your labor is worth in the market, how the value of your labor has grown, and as a result, what you think would be fairer than the current arrangement.
place a bet on someone they’ve witnessed themselves instead of a brand new candidate.
If you’re negotiating a raise
The main difference when you’re negotiating for a raise as opposed to an original offer is that you’ve built a brand within the company. This can help you or hurt you depending on how you’ve done it. This is why it should be your goal to always be genuine, professional, reliable, and trustworthy within the workplace. If you’re not, not only does it hurt your negotiating ability but it also damages your promotability.
Assuming you manage your brand within the workplace effectively, your next step is to know how to prepare for the negotiation.
Make sure you don’t surprise your manager with this. Make sure you calmly and formally bring up in a 1v1 that you’re unhappy with your compensation or some other aspect of your job without requesting a change at least once. Make sure they understand that this is serious and it’s not something they should just be able to brush off and assume you’ll get over.
Within 2 weeks following this conversation, schedule another 1v1 and have the same data listed in the prior section available. This would include:
- An analysis of the market value of your skills in the marketplace
- Job performance reports
- How your skills have grown and changed since you were hired
- How your pay has grown compared to the cost of living
AN EMAIL TEMPLATE FOR YOUR SALARY NEGOTIATION
The primary reason any negotiation is successful is that the information provided is logical and requires no emotional pleading. It’s purely requesting an adjustment due to the mispricing of your labor and then you let your work speak for itself.
The best and most influential position is to have a confident, objective, and logical conversation with your employer. Why? Your manager doesn’t want to lose you as an employee because if they did, their department would perform worse and this would reflect poorly on them. It’s part of their job to retain you and they don’t want to fail. Asking for a raise to someone’s face with all the evidence necessary to prove you’re right is hard to deny.
But in certain cases where you’d like to lay out your argument via email, here’s an exact template and example for you to follow:
Hi <EMPLOYER’S NAME> –
Hope you had a great week.
(Add something personal here). Example: “I know you mentioned you and your family were going to the beach this weekend. It sounds like it’s going to be a great time!”
So, over the last few weeks, I’ve taken some time to revisit the work I am doing at <COMPANY NAME HERE>.
Over the last few weeks, I’ve taken some time to revisit the work I am doing at <COMPANY NAME HERE>.
I have to say that I’m incredibly grateful for the opportunity to learn from you and your team, the culture here is incredible, and I’m proud to say I work at <COMPANY NAME HERE>. It’s an opportunity not many people get and I recognize that even more now than I did the day I started.
That being said, I’d like to have a conversation with you about my current pay structure.
While I am a team player and am happy to help those around me, the original job description stated the following as requirements:
- Providing financial planning, insurance, and investment services
- Ensuring client records are maintained and kept current
- Cultivating and maintaining ongoing relationships
- Acting as a liaison between the client and other financial professionals
- Guiding clients through personal financial analysis, including goal setting
- Assisting clients with estate management, tax returns, budgets, or other financial tasks
According to feedback from both you, my prior managers, and my peers, I am doing all of these tasks very well. In addition to the listed job duties, I’ve helped the organization improve its efficiency in onboarding new accounts and improved the profitability of the organization by X%.
Because of my contributions to the company and my team, the company has grown and improved the way serves its clients dramatically.
The market rate for someone with my experience, education, and workload I am now carrying in the Denver area is $120k a year.
For those reasons, I am asking you to consider increasing my salary from $90k to $120k.
(Schedule a follow-up.)
Needless to say, this isn’t a small increase and I can appreciate the fact the organization would like time to consider the fact I’ve presented to ensure I didn’t miss anything. I’d appreciate the opportunity to discuss this in person with you. Please let me know when works best for you.
Elton John, CFP
That’s it. By following this process, if you’re worth a raise, you’ll get it.
I know this can feel stressful for many people but remember, you’re not trying to get anything you don’t deserve already. If you’re not getting what you’re worth, ask for it. If you don’t and you’re unhappy; you’ll leave and your employer doesn’t want that, either.
If you’re in a goal-crushing mood; we at Progress Wealth Management don’t want to stop you in your tracks now that you’ve gotten your raise. With all your extra money, contact a financial planner at Progress Wealth Management and we’ll help you to figure out how best to manage it in the most tax-efficient way we can create for you so you stay on track for the future you hope for.