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We all want to be paid what we’re worth (if not more). But companies always want to keep their overhead as low as possible. This means they are, to a certain extent, incentivized to underpay. This is why salaries are negotiated – and often several times over the course of an employee’s tenure with a company.
Negotiation is a skill. And negotiating your salary comes with a few pitfalls that are specific to this challenge. There is the best time to ask for a raise and there are also common salary negotiation mistakes to avoid.
Do’s and Don’ts of Salary Raise Negotiation
In this short article, we’ll take a look at a few salary negotiation do’s and don’ts that will help you to prepare for your next salary raise negotiation challenge.
Do Prepare
When you enter into a salary negotiation, you need to have specific numbers regarding the following:
- What other companies are paying to fill a similar position to yours
- You should spend time perusing job boards to get an up-to-date idea of the job market
- How much your company has budgeted to fill the position
- This information can be provided by HR, but it will likely take some research and/or calling in a favor to obtain this information. But a budgeted salary range for the position you hold does exist.
- What kind of raise or salary have people in your company been offered to fill other positions?
- This information can give you some kind of idea as to how your company prioritizes your position and/or how competitive your company is in terms of salaries on the whole
Do Have an Accurate Assessment of Your Value
Let’s face it, when we’re negotiating our own salary, it is quite possible that we have an inflated idea of our value – or, in some instances, an underestimated value. Try to see the position you fill, the role you play in the company from your employer’s point of view.
- What would the company do without you?
- How did the company perform before you were with them?
- How important is the position you fill?
Sometimes, a very talented person can fill a position that isn’t a top priority for the company. The salary doesn’t necessarily indicate how qualified or talented a person is. Sometimes, the very nature of the position has more to do with the salary than the person filling the role.
Do Take the Initiative
Initiative can only come after thorough preparation. But once you are armed with the information you need, you should be the one to propose a salary negotiation or a raise negotiation. If you wait for your employer to take the lead, you will be starting off the negotiation at a disadvantage. You will risk starting the negotiation off from a place of weakness or timidity.
Do Take Your Employer’s Needs Into Consideration
Reaching the right salary, one both you and your employer are happy with, should be a team effort. You will want your employer to leave the negotiation with the feeling that their needs have been addressed, if not met.
The reason they are offering you a salary in the first place is that they have needs they think you can meet. You are far more likely to get what you feel you deserve if you are able to frame the negotiation as ‘what they should pay to meet their needs’ and not the inverse.
Do Consider Other Forms of Compensation Than Just Money
When negotiating a salary, this is the time to cover all aspects of the job. The salary, to a certain extent, sets performance expectations. The higher you can raise the expectations of your performance, the higher the compensation you should be able to ask for.
Compensation, of course, consists of a regular paycheck. But your company can and should offer more than that.
- Bonuses and commissions
- Taking advantage of the company’s buying power for event tickets, tech purchases, holiday packages, etc.
- Continual training
- Office space (or the possibility to work remotely)
- Perks such as phones, computers, use of a company car, etc.
Don’t Set an Ultimatum
Setting an ultimatum – an either-or scenario – will pretty much guarantee that you will strain the employer-employee relationship and will have problems down the line. Ultimatums are never a good idea for any kind of long-term collaboration. Avoid this kind of short-sighted thinking.
Instead, you should be flexible and hold to the idea that, if you let it be known, this will not be the last time your salary is updated. This is especially important if you plan to obtain further training and experience. By not setting an ultimatum and keeping your options open, this means that the door will be open down the line for another salary negotiation. And when that day comes, you will have gained further experience and further training. This will only increase your value.
Don’t Accept an Offer Too Quickly
It is perfectly OK to graciously thank your employer for their offer and say you will get back to them with a response shortly. This is even expected.
Even if the offer they make is so spectacular you are sure you will accept it, still tell your employer that you will get back to them with a response shortly. Remember, how you handle this salary negotiation will set a precedent for future salary negotiations down the line. And you don’t want to give your employer the impression that they have given in too quickly to your demands. This will affect what they offer you later when you ask for a raise.
Don’t Frame the Negotiation Around Your Needs
A salary, from the employer’s perspective, is the amount of money they need to pay in order for their specific needs to be met. This is why there is a salary and this is how the salary range for your position was budgeted.
Your salary is based on a number of factors – your value, experience, the current labor market, etc. Your salary is not based on your needs.
The Bottom Line
When it comes to negotiating a salary raise, there is little to no substitute for preparation. You need to have a clear idea of your value to the company, the current trends in the labor market as they pertain to your field or your position, and the financial situation and priorities of your company.
Leave the door open for future negotiations. You might not get everything you want, but if you leave the door open to revisit your salary down the line, there is a greater chance you will eventually be satisfied than if you set an ultimatum and burn a bridge in the process.
