Differences in annual salaries across roles, companies, geographic locations and industries can be significant, with many employees receiving a minimal increase year to year despite increased living and business costs.
When gearing up for your annual performance review and potential pay increase, it's common to feel frustrated or undervalued. Perhaps you're in a business that hasn't reviewed your remuneration in years. Either way, knowing when and how to approach the discussion of a pay rise is paramount.
It is important to remember that for most businesses salaries represent a significant financial investment, particularly when factoring in bonuses and commission incentive payments. So it’s up to you to build a strong, relevant case if you’re going to ask for more.
Be informed and do your research
In the world of salary negotiations, knowledge is power. Just as you organised your resume and practiced interview scenarios to secure your job, thorough preparation for the negotiation phase is vital. As with all negotiations, it’s important to decide exactly what you want to gain, and why, before you meet with your boss.
Consider whether a straightforward raise suffices, or if a variable pay option could enhance your negotiation strategy. Explore additional benefits offered by your company, such as bonuses, a company car, private health insurance, or salary sacrifice, and evaluate if they could contribute to a more favourable overall package.
Timing is crucial
Consider the timing of your negotiation. Are you about to take on additional responsibilities or have you recently completed a project beyond your basic job function? Highlight these contributions, emphasising their value to the company's overarching goals. Make it clear that recognition for exceptional work is an expectation.
Avoid emotional appeals
While feeling undervalued can trigger emotions of frustration, it's essential to avoid emotional appeals during negotiations. Expressing sentiments like "I'm worth more" without supporting evidence may not yield positive results. If dissatisfaction with your role persists, you may want to consider exploring new job opportunities.
Statistics show that citing living expenses, comparisons to colleagues' salaries, or leveraging external job offers are often ineffective tactics. These approaches may portray you as self-serving and could lead to dissatisfaction beyond salary concerns.
Whatever the outcome
Even with careful preparation, a positive outcome is not guaranteed. In the event of a 'no,' seek feedback from your boss on how to improve your chances in the future. This not only demonstrates a commitment to growth, but also positions you positively for future discussions.
Remember, negotiating a pay raise is a skill that, when exercised with tact and professionalism, can contribute to your career advancement. Conducting yourself with integrity and showcasing your value to the company can serve as an investment in your future.
Ensure you are talking to the right person
You don't want to waste valuable time and energy in a salary negotiation with someone who isn't a decision maker. Nor do you want your message distorted as it is translated from person to person within the organisation, so make sure you are speaking to the right person from the outset.
Be clear on why you deserve an increase
If you're struggling to articulate the exact reasons why your boss should be paying you more, chances are, you may not deserve an increase. To justify a pay rise, you should have clear, concise examples of when you have directly contributed to business success.
If you have any other tips and tricks that have worked well during a salary negotiation we'd love to hear them. For more career advice, get in touch with one of our recruitment specialists.