Salary negotiation (asking for a salary increase, a pay rise, or simply more money) affects everyone from time to time. Salary negotiation can be difficult, and many people handle it poorly, causing frustration and ill-feeling. There are constructive ways to approach salary negotiation, and techniques to achieve good outcomes.
If you are a manager, you will need to handle salary negotiation positively. If you encourage people to adopt a constructive approach to salary negotiation, you will help to minimise upset and to achieve a positive outcome. As a manager dealing with salary negotiation or a pay increase request, it’s important to encourage a grown-up, objective, emotionally mature approach. These ideas and techniques will help achieve this whether you are giving or receiving the salary increase request.
There is no ‘proper’ or standard way to ask for a raise or salary increase. It’s not something that people are trained to do, and little is written about it. People use various approaches: they can write; discuss informally; discuss with colleagues and hope the boss gets to hear; they drop hints to test the water; they ask the boss politely; demand firmly; go over the boss’s head, or maybe even threaten to resign, secure another job offer, or simply resign.
Largely people do not look before they leap; they are often under pressure, and they feel uncomfortable and stressed asking, so they fail to plan and control the situation, which makes achieving anything difficult. Simple planning and keeping control makes a big difference.
While these tips and techniques are ostensibly for employees, they also serve as a helpful guide to managers who are recruiting staff, and want to ensure that people joining are doing so happily and on a sustainable basis. People who join happy that they’ve been given a fair deal are more likely to stay, and less likely to harbour grudges or feelings of being ‘bought’ for less than they deserve.
Employers who recruit people at less than their market worth might think they’ve done a good deal, whereas in fact such employees are likely to become frustrated and feel ‘cheated’. Again, see the earnings survey example report below. Help employees to make good, right, and fair decisions about their careers, and they will respect you and your organisation for doing so.
That said, from the employee’s viewpoint, changing jobs is a very good opportunity to increase your salary level. Critically, to take advantage of this opportunity you must negotiate before you accept the new job offer, whether the job is an internal or external move. Any manager who fails to give this opportunity to a new recruit is likely to be putting a problem into store for the future. The most important thing from the employee’s perspective is to secure the job offer first. There is no point in negotiating until then.
The employer’s initial offer will be based on their own budget and internal pay-scale reference points, and what level of reward they feel is necessary to secure you (or a suitable alternative candidate), and this salary/package level is nearly always negotiable. The stronger you convince the interviewer and employer that you are the best person for the job – in all respects that need to appeal to them – then the more likely you are to do well when it comes to negotiating the package.
If the employer asks you before or during the interview to confirm your salary/package expectations, give them a broad indication at the top of the range that has already been indicated or discussed for the role (plus 10-20 per cent for good measure if you wish), and say that ultimately your decision will be based on comparing your options (think and behave as if you expect to have more than one).
In terms of negotiating salary and package, your best position is always to secure two job offers from two different employers, which gives you the huge advantage of choice. If you can’t or don’t, (which is normal), then behave as if you have other options, which of course you do, if not right now.
Do not allow the interviewer/negotiator to set, suggest or argue for a salary level based on your previous one (assuming it’s lower) – be very firm about this. It’s not relevant. What you earned before and why you worked for that wage is not their business and has no bearing on your value to them and the market now (make that point politely not aggressively of course). What’s relevant is your value in the market, and how much the employer wants you compared to other candidates and their respective salary expectations.
It’s important to give them the feeling that you are entirely confident in being able to go elsewhere if the deal’s not right. Bear in mind also that you can always buy some time to ‘think about it’ whatever they offer you. Time will generally work in your favour if they want you. They will worry that they’ll lose you, perhaps even to a competitor, and so will be more likely to increase their offer, and to justify some extra budget if required.
You do not need to give them a rushed answer whether to accept their offer just because they’d like one. Of course they’d like one quickly because they know they’ll get a better deal that way, and they’d like to finalise the recruitment ASAP. Generally a good manager and employer will respect you more, and feel you are more valuable, if they get the impression that you are in demand elsewhere.
During the negotiation be sure to maintain a positive and committed view towards the prospective new company and the job (assuming of course you feel that way about them). This will prevent the risk of their coming to the view that you are wasting their time or stringing them along. It’s important to be fair and right with people, even while negotiating.