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Annual reviews - negotiating a pay rise

02 May 2017

Why it's ok to feel you deserve more - and what to do about it...

The idea of negotiating salary can often make people feel quite uncomfortable. There are employees, all across the world, who would rather do just about anything than ask their employer to pay them more.

It's a strange cultural phenomenon; when you work for an employer, you're essentially selling them your time. Why would you not negotiate a price for something you sell?

This problem is particularly acute among younger workers, with research suggesting that up to 60% of millennials don't negotiate salary when receiving their first job offers.

This can all have a knock-on effect on future income. Many regular salary raises are percentage-based, so, theoretically, every single time you receive a routine pay rise, you could be getting a slice of a smaller pie. This can add up to huge amounts in lost income throughout your working life.

Of course, negotiation is a complex, intimidating skill. It's not something that comes particularly easy to anyone. The good news is, with the right advice - and plenty of practice - you should be able to negotiate like a pro!

1. Do your research

It's important to go in with clear, realistic expectations of what to ask for. A great starting point is to identify how much others in similar roles earn. IDEX's salary guides are available to download and give you a good idea of industry benchmarks. Elsewhere, you might want to take a look at websites like salaryguide.com, glassdoor.com and payscale.com.

This information gives you something to work from. You should also consider things like:

  • How much demand is there for your job? The more demand, the greater leverage you have.
  • What difficulties would your company face if you left? It sounds callous but this all serves to enhance your value to the business.
  • How is the company performing in terms of profit & loss? The better the company performs, the greater the rewards should be for its staff.
Once you have a rough figure in mind, you should ideally start your negotiations around 10% higher, to leave some room for compromise.


2. Believe in yourself and be prepared to be your own salesperson.

If you don't believe in your value to the organisation, then you can hardly expect anyone else to believe for you. In order to appreciate your own value - and demonstrate it to others - it's a good idea to make a conscious effort to build evidence.
 
Try and keep track of your achievements and accomplishments, ideally associating them with monetary value, either generated or saved for the business. 
 
There's a lot to be said for a work 'journal' in which you can document your achievements on a daily or weekly basis. It's not about being arrogant; it's about demonstrating value that deserves to be rewarded.

 

3. Arrange the meeting in advance and make sure your manager knows what to expect

Managers tend not to like surprises - and, when it comes to pay negotiations, putting him or her on the spot will only make for a stressful, tense situation that is far less likely to result in a positive outcome. 
 
We recommend sending a message by email in advance that requests the meeting and explains in a professional, but friendly, tone, what it is that you'd you'd like to discuss. Something along the lines of:
 
"Hi (Name)

I was wondering if we could arrange a meeting some time over the next few days?

I've been thinking about my role lately and wanted to discuss how some of my additional responsibilities and achievements might be reflected in my pay? 

Look forward to hearing from you!"

4. Sit down with someone you trust and role play the meeting beforehand

Again, salary negotiations can be uncomfortable, and it's perfectly natural to feel nervous beforehand. Nerves affect people in different ways and, unfortunately, they can often impair our ability to express ourselves effectively. 
 
A good way to mitigate this effect is to practice in advance. The more you practice, the more comfortable you'll feel. Grab a friend or family member and ask them to rehearse the meeting with you. Get used to stating your case - and you can rest assured on the day that the preparation has been done in advance, and you're as ready as you can be to do yourself justice.

 

5. Approach the meeting in the right way 

Once you're at this point, you're in a strong position. You've done everything right. But it's so important to nail the meeting, and there are a number of things you should bear in mind to help make this possible.
  • See things from the company's perspective. You need to build a logical argument that demonstrates how it's in everyone's interests to make sure you're fairly compensated for your work. Make sure your manager knows you're fully committed to the business and the challenges ahead. Your manager is not the enemy here, and you need to keep them on your side.
  • Stay relaxed. The last thing you want is to be defensive or confrontational. Stay relaxed, be calm and be gracious. Don't get mad, and certainly don't resort to brinkmanship. Even if your boss won't budge during the negotiations, make sure to ask calmly for feedback to help you better understand what might make you more successful in the future.
  • Appreciate the value of silence. We've already talked about the fact that nerves can get the better of people in this situation. A lot of people respond to nerves by becoming overly talkative - but the real value in these meetings comes from the replies you get back. You have to appreciate the value of silence, and make sure you listen fully to the replies you receive. This is not only crucial to securing a positive outcome in this meeting but also stands you in good stead for future meetings.

6. Go beyond pay.

Try as we might, not every renegotiation is going to be successful. But that's not the end of the world. 
 
If your employer won't budge on pay, you still have an opportunity to negotiate for other benefits, perks and advantages. These include extra holiday days, flexible working, performance bonuses, and many more. Bear these in mind. They are all valuable and could make a real difference to your life at work and beyond. A day working at home, for example, would save you 20% of your travel costs - nothing to be sniffed at.

 

7. Follow up the whole process with an email

Regardless of the outcome, it's important to put what you've agreed in writing. This gives you a paper trail and also makes sure that everybody is held accountable for the next steps in the process. 
 
Even if you're unsuccessful in securing a raise, your boss might tell you that it's something that can be revisited in 3-6 months. 
 
In that case, that's exactly what you'd write in your graciously worded follow-up email - as well as making a clear note in your diary to broach the subject after the suggested time period. 
 
Even if you weren't successful this time, persistence often pays!

 

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