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Recently I put out the following query:
What’s your #1 tip for negotiating a higher salary? Looking to hear from HR professionals as well as people who tried something interesting to try to negotiate a higher salary and it worked out.
I was quite surprised by the number of responses I got to that, with well over 100 submissions from all kinds of HR professionals and people who have successfully negotiated a higher salary and had a story to tell. The vast majority of submissions recommended one of these two things:
- DO YOUR RESEARCH AND BE PREPARED. That means going on Glassdoor, LinkedIn and any job sites relevant to your industry, looking up salary ranges, and collecting as much data as possible (see this comment). Also, talk to others as much as possible. Take everything into consideration including any other perks like paid time off. You should know as much as you possibly can about what others in your industry with your credentials are getting paid. In addition to researching salaries, also know as much as possible about the company you work for and how much leeway they should have for increasing your salary. Then, rehearse the conversation you’ll be having with your manager and consider how you’ll respond to any scenario.
- USE NUMBERS AND HARD FACTS TO PROVE YOUR VALUE. See this comment for example. Stating things like “I’m a hard worker, I’m dedicated, I’m reliable” etc. is largely meaningless by itself, and nowhere near as effective as using specific examples of how you achieved measurable results that actually saved or made your company money. This is also the #1 tip we listed on our piece about how to write a resume. And similarly, if you’re indispensable to your company and it’s plainly obvious that they need you, it’s easier to ask for a higher salary (see this comment).
If you have those two things down, you’re most of the way there. It’s hard for a manager to say no to a salary increase when you’ve shown very clearly how you’ve made the company a lot more money than what they’re paying you, and you have plenty of data and knowledge showing that others in your industry are getting paid more than you are.
Here are the other (good) tips people submitted, along with links to their comments:
- Present a salary range rather than just a single figure (link)
- Consider asking for more performance-based compensation over a base salary (link) if you’re confident in yourself and it’s appropriate for your job
- Similarly, present a plan with some goals and benchmarks with your manager, and ask them to increase your salary by $X if you achieve it (link). A manager may be far more likely to agree to something like this as there’s less or no risk to them, compared to giving you a salary increase immediately
- Ask often, every 4 to 6 months (link)
- If your work contract has restrictive covenant like a non-compete, that can be a bargaining chip to ask for a higher salary (link)
- Show that you have other job offers (link, link) (this is a common piece of advice as well)
- Learn the art of silence and don’t ramble (link)
- If equity is included in your compensation, you may be able to ask for 3x the equity and get twice the amount (link)
- Similarly, if your company is refusing to increase your salary, see if they can budge on perks like more paid vacation time (link)
- It’s much better if you can let your company make the first offer (link)
If you want to sell your boss on why you should get a raise, the most important thing you need to do is actually prove to them why you deserve it. And to do this, my number one recommendation is to directly connect your work to the profit you're bringing in for the company.
How to connect your work to company profit with actual data:
First, you need to understand how your work impacts the profit margins for the company. How does your business make money, and what role do you play in making that happen? Once you know this, figure out how much you're actually *costing* the company (salary + benefits cost + SG&A).
Then all you have to do is connect those dots. If you know you're costing the company $65k/year while the work you do is responsible for $150k/year in revenue during that same period—that conversation with your boss is going to be a lot easier. Show them the numbers, ask for what you're worth, and just like that you're no longer relying on I think I... statements with no data-backed research.
--Josh Gallant, Foundation Marketing
When asking for a raise, it’s important to know what range you want to negotiate. Often, people who negotiate their salary lose out because they won’t compromise on the single figure they have in mind. This can not only mean that you miss a decent job opportunity but you may also imply that you’re unaware of the worth of the job.
People who present a range rather than a single figure show that they know what they’re worth and what the ballpark salary for their job title is. This instills confidence in an employer that they’re hiring someone who knows what they’re doing and is self-assured in their skillset.
--Stephanie Lane, SafeSpaceHub
Too many people base their salary negotiation on their last job or their monthly expenses or a random number that sounds good to them. Don't do that! The internet makes researching salaries easier than ever. Research two to three salary websites printing out the information. Bring that to the negotiation table with you. When you can show why you are asking for the dollars you want it is much harder to be turned down.
Some of my favorite websites are LinkedIn Premium, Salary.com and Glassdoor.com. If you belong to a professional association they will often have industry-specific information available as well.
--Krystal Yates, EBR Consulting
We have had several people who have had great success negotiating higher salaries with our company Kennected. One person, in particular, our head of sales, came to us with a proposition. His idea was to reduce his based salary and increase his commission. He said that he believed so much in the product, and his ability to sell our product, that he was willing to sacrifice his guaranteed base salary, for higher income potential.
We were intrigued and talked as a group and decided that Aaron was ambitious enough and had proven himself in sales. So we decided to accept his proposal. Year to date he is earning 38% more than he had at this time last year. I think the biggest lesson to be learned here, is to not be afraid to think side the box. And to be willing to take a risk, and show your employer that you are willing to bet on yourself and your production or performance.
--Stephen Twomey, Kennected
Negotiating a higher salary should be a process, not an event. You first need to evaluate your current role, how you are performing, and where you can not only improve the most personally but also provide true value to the team or company overall.
Next, sit down with your immediate supervisor and map out your plan. Tell them: Hey, this is a plan I have come up with to dramatically improve my performance/the value I bring to the company or team as a whole. I'm going to get started on this and show you how exactly I'm going to crush it. If I succeed in this and hit these benchmarks or goals, would you be willing to sit down with me in six months and renegotiate my compensation?
There are a few reasons this is a powerful approach. Many people think it's strategic to build a pay raise resume, citing all the great things they have done recently to merit a raise. But few people call their own shots, show their boss a road map, and stick with it. It shows a higher level of thinking that is often needed in upper echelons of leadership roles, as your supervisor likely does something similar to her boss every quarter with her own production roadmap for your team. Plus, it's a win-win for a supervisor. Even if you don't hit the goals you are setting out to accomplish, you are committing yourself to proactively increase your performance dramatically.
Further, you are offering value upfront before you even ask for the raise. Retroactively citing reasons you deserve a raise may be based on opinion or interpretation of those past events, but getting on the same page upfront is a powerful way to show your leadership what you are capable of and walking them through the process of you doing a job worthy of the raise.
The above strategy is a way for you to say to your supervisor: Hey, this is what I want to do, this is how I'm going to do it, and this is what I expect when I'm done. Now watch me crush it. Any supervisor would be more than happy to talk about a raise at that point. Just make sure your goals are measurable, attainable, aggressive, and overall beneficial to everyone involved.
Go get that raise you deserve.
--Jaron Miczo, Good Vibe Designs
The #1 thing that has worked for me is to ask often.
When I was still employed, I asked my superiors at least every 6 months for a salary increase. When I was young, I even asked for an increase after about 2 weeks... haha. But that didn't pan out.
Asking every 4-6 months, however, works like a charm. You won't get an increase every single time - I usually got mine every second time.
When you're a good employee - which is key to ask for a salary raise in the first place - your boss will want to keep you. They may be comfortable with rejecting your request once, but the second time they'll hear that little voice in the back of their heads saying You already said 'no' once. Don't do it again, otherwise she'll leave the company.. And there is your salary raise.
Btw.: Since I do hire and mange people myself, I find myself in the same position. If a valuable employee comes to ask for more money, I don't find it difficult to reject once. But I do find it challenging to reject a second time. (But please, don't tell my team.)
A second option, which has worked very well for a friend of mine: Every year she applied to about a dozen new companies. She then took the highest salary offer to her boss, stating he'd better match this, or she might be out the door.
While I don't like the threat part of this approach, for her it worked wonders: She's still with the same company after 8 years. And boy does she earn a living...
--Chris Kaiser, Click A Tree
For some higher level employees and executives, the existence of restrictive covenants (e.g., noncompetes, nonsolicits) could be a bargaining chip. When you receive the papers—the offer letter, employment agreement, employee handbook, and/or or stock option plan—tell your potential employer that you will have your lawyer them. If the documents incorporate stringent restrictive covenants that will limit your future employment options, then you might consider asking for more money, especially if the restrictions would limit you for longer than 1 year in an unspecified geography/industry. Since employment contract laws vary from state to state, consult with a local attorney who will analyze and negotiate employment contracts.
--Lou Russo, Russo Law LLC
One of the best ways to negotiate a salary is to let managers know you have other job offers. By doing this, you give yourself the leverage of having other, high-paying options rather than giving your employer the leverage. Letting managers know you have other job offers that are higher paying lets them know you are a highly sought after talent, and it may make them work harder to keep you on board by paying you more.
Not only that, letting your employers know about other job offers that are willing to pay at a higher rate gives them an idea of the market value of employees in your position. By giving them an idea of what other businesses are paying, you might convince them it's time to give you a raise.
If you're looking at negotiating your salary, try looking around for some other job opportunities to get a sense of the pay rate. By detailing this to your current employer, you can put the pressure on them to increase your salary or risk losing you and your talents.
--Chane Steiner, Crediful
The single most important thing to consider when negotiating a salary is making yourself an indispensable value to the organization you work for. I have a friend who handles financial systems as a single point of failure in his organization, you can bet he is indispensable and can command just about any salary he wishes! Becoming indispensable to your organization means building a foundation upon which you are an integral part of systems and processes. The knowledge and experience you have should speak for itself through practice.
As a business owner, from a practical standpoint, employees will never be paid as much as they are worth, that is because, if they did, the organization itself would make no money. The organization mainly relies on what is called excess labor productivity (revenue that is before wages) to make money. Therefore, if you command a salary that is above the value you provide, you will not like the answer you get. Therefore, the key to raising your salary is by raising the value you provide the organization.
You can do this in many ways; you can become proactive in business ventures and teams to spread the value your provide across multiple systems, you can take some time before the negotiation to really work hard and increase the noticeable impact you have on the organization bottom-line (this will help your negotiations by providing a baseline of value), or you can also develop new strategies and processes for the organization that provide valuable and increase productivity. There are many more ways to do this that are dependent on your organization.
Ultimately, the best thing to do to negotiate not only a HIGHER-salary, but the HIGHEST possible salary, is by providing more self-evident value to the organization before the negotiation comes around.
--Austin Denison, austindenison.com
My #1 tip for those who are in a position to negotiate their salary is to learn the art of silence. Before you walk into your salary discussion, you have hopefully done your research and recited your argument in your head a million times. It is only natural that your inclination is to ramble out every important point that you can possibly think of to validate your reasoning. STOP. Rambling does not exude confidence nor does it give the other party a chance to digest your points or get in a few words of their own.
Instead, format your argument simply:
1. Present concrete facts such as measurable achievements that illuminate your value to the company. Do not use your personal financial goals or struggles as your reasoning. Your dreams of homeownership do not make you a more valuable employee.
2. State what you want and how you came up with that number (tip: use market value information for comparable job functions in your area. )
3. Ask if that is a fair and reasonable valuation of your contribution to the company.
4. Stop talking and allow them to answer. Get comfortable in the silence, sit tall, uncross your arms, and make eye contact. Even if you don't feel it in the moment, body language can go a long way for helping you to appear confident.
--Jessi Greenlee, Good Impact Network
I'm a Career Coach and my biggest tip is that you can usually ask for 3x the amount of equity, and get twice the amount. I recently helped a client negotiate significantly more equity at Facebook by helping her get data from other people and how much equity they get.
From a company's perspective, they don't want to give away equity if people don't appreciate it, so usually the equity part of an offer is fairly low. However, if you push, you can get that negotiated way up, and if you're really aggressive, you can even agree to take a lower salary in exchange for way more equity (only do this if you're feeling very confident about the company's prospects of course).
--Joyce West, LinkedIn profile
The best tip I can offer when trying to negotiate a higher salary is to focus on perks in addition to just straight salary. The company may not be willing to increase their offer, but they may consider offering more paid vacation, a company-funded vehicle, computer, cell phone or other perks. If you're close to what you want on salary and they won't budge, try to find another way to make up the difference that they may be more willing to negotiate on.
--Michael Greig, Ninja Budgeter
My #1 piece of advice for negotiating a higher salary is to let the company make the first offer.
You want to feel good about where you're working and feel valued. One way of measuring that is by salary. Many times the employer will ask the candidate what salary they're looking for - and that's normal to ask. However that sets the framework for what an employer will likely offer - and more times than not it'll be lower than what you requested. That's not unusual and is a way for the company to try and save money.
Instead, by letting the employer make the first offer, you can come back and explain why that figure is too low. You'd love to work there and really want it be a good fit, but the economics have to make sense and here's the number I need to make that happen. That way, you're not coming across as greedy, but rather you're stating you position that you want to be a team member, but the numbers have to jive.
Most times in my experience by doing it that way, the employer will come back with a slightly better offer. It's probably not going to be what you want, but it will be higher than their original offer and a way to come to an equitable agreement that everyone can feel good about.
--Adam Gordon, PTO Genius
I have followed the multiple offer rule for salary negotiation, which exponentially increased my salary. This strategy is especially useful when you know that a company is trying to pay you a lower base salary than the current market value. Let me explain how it works.
When a company decides to give you a job offer, the chances are you may have also interviewed with multiple other companies and got other job offers. This is a golden situation to be in as you can make the companies fight for you.
You can tell one company that you are getting a better offer and perks, and ask them to match that offer. Sometimes this may be true, but other times even if you do not have other job offers, you tell them that you have another job offer and use that in your salary negotiation process. They cannot legally ask you which company you got a job offer from, and you are under no obligation to reveal it. Despite that, if they ask you, say another tech company and stop. You don't have to explain yourself. This is not cheating as you are just trying to get the right base salary amount you are worth based on the current market value.
Imagine a real-life situation - Say you want to buy a car - You go to multiple car dealers and get a quote for the vehicle you want. Once you pick a dealership you want to buy the car from, you go there and ask them, what can they do to match the offer of another dealer? Sometimes this may be true where another dealership is offering you a better price but have lousy customer experience. But, other times, you say you have multiple offers (even if you don't) and make the dealerships fight with each other to get your business.
This is the same logic following the multiple offer rule for salary negotiation.
Now, you may wonder if the company would rescind your job offer because of asking this question?
First of all, understand that the company has already invested so much time, effort, and money on you. It starts from coming up with a job description, letting the public know about it, hiring a recruiting agency to help them out, and interviewing many candidates. This also means the employees have to spend time on interviews, which means they are not spending time on actual work. The company is still paying them when they are not doing the real job they were hired to do. So, the company is paying a steep price for it.
Giving you the job offer is the final stage of a cumbersome and painstaking process. So, they are not going to take back your job offer. This has never happened in my life or anyone I have ever known in the IT industry for the past 15 years. I also do tech career coaching for a living and have helped numerous people negotiate their salaries, and they haven't faced any problems following this strategy.
Secondly, most people are afraid to ask for more money, thinking it is a terrible thing to do. Remember, if you do not negotiate your salary and get what you are worth, the extra amount you could have gotten through negotiation will be claimed by another person. So, literally, you let another person take your money.
That said, the way you approach this situation matters. You don't have to raise your voice and be fearful when you ask them to match the offer of another company. They understand that this is a typical situation and, on most occasions, try to see what they can do about it. Remember they want you, and that is why they gave you the job offer in the first place.
So, be bold, be brave and follow the multiple offer rule.
--Raj Subrameyer, rajsubra.com