Go in for a Performance Review, Come Out with More Money in Your Proverbial Pocket
Which is more daunting: negotiating a higher starting salary at a new job, or approaching your current employer about a pay raise?
If you think the latter, you’re not alone. Results from the Salary.com survey we referenced last week indicate people fear the pink slip more than a rescinded employment offer. A staggering 44% of people never ask for a raise during their performance review, as compared to 12% who always bring it up.
One of the main reasons why people hesitate to ask for a pay bump from their current employer is because they believe that they lack the skills to negotiate properly and effectively. So without further ado, if you’re looking to stay at your present place of employment but with more money in your proverbial pocket:
Know when to request a raise. If you’ve been with the same employer in the same position for a year, you need to negotiate a salary increase – especially if your position has evolved since you accepted the position (through a department change, for example), or if you have taken on more and greater responsibilities in that time (i.e., “scope creep”). One of the best times to talk about a raise is when your efforts on a project have noticeably impacted your organization’s bottom line or generated high, positive visibility (more on that in the next bullet).
The best day of the week to ask for a raise is typically Tuesday or Wednesday. On Mondays, people are catching up on what they missed over the weekend, and on Thursdays and Fridays, busy wrapping up work before the weekend – so administrative tasks such as meeting with you about a pay raise may get pushed back.
Also, research your company’s finances. Avoid asking for a raise when your company has just experienced a dramatic loss in revenue or is pondering layoffs. You just might be the one to lose your job if you ask your company to add costs when they’re looking to cut them!
Prepare a list of your specific accomplishments and contributions. While your personal finances may be the impetus for this discussion, it shouldn’t be a talking point as it brings into question your lifestyle choices. Rather, your argument should be data-driven; emphasize your value and potential! It shows that you’re confident in what you bring to the table.
So instead of “I deserve a raise,” try “I’ve earned a raise” – it’s a subtle way to frame your request respectfully (“This is what I add to the company. I should be compensated for the work I’ve done.”), rather than demanding or accusing (“You’re not paying me what you should be.”). Also, never use what a comparable colleague earns as the basis for your raise request, as the variation in salary can be due to many factors such as differences in job market strength at the time of hire, negotiation ability, and individual skill sets.
Determine a range you’re willing to accept. People respect those who know what they’re worth, and ask for it. Talk with a local IT recruiter like those at Chase Technology Consultants (CTC) to obtain accurate market rate information, as salary is affected by many factors such as experience, job responsibilities, and location. Also keep in mind that the standard COLA (cost of living adjustment) is 3% annually, and that a typical annual performance raise is between 5 to 10 percent. Ask for anything more than that – especially without the research and figures to back it up – and you risk coming across as greedy or clueless.
Anticipate potential objections, and be prepared to offer creative solutions (e.g., more PTO, flex work options) if you’re told there are financial constraints such as not enough money in the budget.
Negotiate in person. It personalizes your request and gives you the opportunity to read your employer’s body language. Although you have more time to think through what you’d like to say via email communications, you run a higher risk of something you say being misinterpreted.
Meeting in person also allows you to better control the conversation; through email, it’s too easy for either you or your employer to bring up other points of business. You want to focus the conversation on your job satisfaction and needs, so when you approach your boss simply state that you wish to schedule a time to discuss your performance and re-evaluate your salary and benefits accordingly.
Be honest and respectful. Letting your boss know about offers from other companies can be risky. If not done correctly, your employer’s takeaway may be “If we don’t offer more money, he/she may leave. And even if we do, he/she will probably jump ship at the next higher offer.” (Besides, if your current employer does decide to match an offer extended to you by another company and you take it, you may find yourself training your replacement in the near future. Read more about counteroffers and why you shouldn’t accept them here.)
It’s best to just say that you were motivated to look into the competitiveness of the job market and based on your research, professionals of your skills and experience earn between X and Y. Then, describe your value and contributions before saying that you feel that a fair compensation would fall in the middle to upper-end of that range. Avoid naming a specific number so that you have more negotiating power!
Never give ultimatums. Don’t threaten to leave the company if you don’t get a raise. It’s already implied that if they don’t give you what you’re looking for, they risk losing you – so no need to spell it out. Plus, if you don’t get the raise and then don’t follow through on your threat of quitting, you may not be taken seriously the next time you try to negotiate. You’re more likely to be successful at getting a bigger paycheck or better benefits if you emphasize your loyalty and contributions to the company.
Keep an eye out. If compensation is the only thing holding you back from loving your current job and your employer doesn’t seem interested in addressing the issue or revisiting it at a later (set) date, it may be time for you to start finding a new job. An experienced IT staffing firm like CTC can help match you with opportunities that best suit your needs and financial requirements.