How To Negotiate A Pay Rise

Posted by John Adam on November 24
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We’ve spoken many times in this blog about how being an unquestioningly loyal customer to financial services companies, such as insurance providers, mortgage companies and banks unfortunately doesn’t always mean getting the best deal. The same can be said when it comes to services such as utilities or even gym memberships. The reality is the best deals are often offered to new customers or those that are prepared to shop around and switch or present their existing provider with evidence of better prices available for comparable deals.

But does the same apply when it comes to our salaries at work? Studies suggest it certainly can. Unfortunately, there is evidence to suggest that job hoppers who relatively regularly move between companies can often earn more than loyal employees who stay with the same company for years, if not their whole career.

Moving between companies more regularly can result in a higher income for a few reasons. The first is that it can be easier to secure faster promotions by switching employers. That’s because the employee does not have to wait on the right promotion opportunity opening above them in their own company but spreads the net. Secondly, anyone already in a secure job interviewing for a potential opportunity elsewhere has little to lose by asking for a higher salary and/or bonuses and perks. If the improved conditions asked for are then offered, great. If not, they can sit tight where they are and try again until the right, improved offer does come along.

On the other hand, employees who are happy in their current job and/or company, can sometimes find themselves in a position where they may be earning less than what newer arrivals doing a comparable job have negotiated. Or have slower career progression, and so earning potential, because they patiently wait for suitable promotion opportunities to open up in the same company.

Of course, in the perfect world, a company’s management will recognise the value of loyal, long term employees that are also reliable and good at their jobs. But sometimes cost pressures or simply not giving it enough thought can mean the added value to a company represented by long term employees who know their job and workplace inside out is not rewarded to the extent it should be.

If You Don’t Ask, You Won’t Get

If you do find yourself in the position of believing that your salary undervalues your contribution to your employer, what can you do about it? The only genuine solution is to gather your courage and ask for a raise. But especially for employees who are otherwise happy in their company and/or job, asking for a raise can be uncomfortable.

The main reason for that is probably the fear of being turned down. What happens if you ask for a raise and are told no? Will you then feel obliged to leave even if you don’t really want to, even if you feel you should be earning more? Or will you then be looked on negatively by your employer and possibly miss out on the next promotion opportunity or just generally be marginalised?

That really shouldn’t be the case if you approach your request for a raise in the right way. You most probably are a valued employee and the reality is, if your request is reasonable and you do deserve to earn more, your employer will recognise it is in their interest to keep you onboard and motivated.

Ask For A Raise In The Right Way

If you approach your request for a raise in the right way there should be little danger of an employer reacting negatively. That doesn’t necessarily mean they will immediately just give you what you are asking for. But it should mean there is no negative fall-out to your request.

So what is the approach to asking for a raise that stands the best chance of success? If you follow these simple guidelines, you should have a good chance of securing a raise if you deserve it. And if not, you should at least avoid the request being declined becoming uncomfortable or confrontational.

Prepare Your Case Well

Before asking for a reasonable raise, the first step is to thoroughly prepare the case you will present your employer with. That should also help confirm to yourself that asking for a raise is both reasonable and stands a good chance of being approved.

Why do you deserve a raise? Is it simply because you would like to earn more money? That, on its own, is probably not the best case to put forward. Are others in your company doing a job of comparable responsibility, skill level, scarcity of potential new recruits and financial value to the company earning more than you? If so then that probably is a good case to put forward. Or are salary levels for comparable positions in other companies higher than yours? That’s also a good case to put forward if you can back it up with hard facts. In both scenarios you should have a good chance of your request being approved.

The Lack Of A Raise Might Not Be About You

But there’s always the chance your present employer declines your request for a raise because the company simply can’t afford it at that moment. In which case, the reality is that the power rests with you. If you are convinced the employer genuinely isn’t in the financial position to grant your request, you will have to make a personal decision on if staying with the company or improving your salary is more important to you. You could even consider suggesting a compromise option such as working slightly less hours for the same money, additional holidays or requesting more flexibility in your work hours or the option to work from home some days.

Offer More Value

If your current salary is competitive when compared to your peers at your employer and those at other employers but you want to earn more money and preferably without changing companies, what are your options? The reality is you will have to convince your employer that you are either deserving of consideration for promotion at the first opportunity or you can offer more value from your current position.

In those scenarios, the best approach is probably not to directly ask for a raise but rather to ask your managers how they see your promotion or professional development prospects. Explain in a professional and non-confrontational way that you are ambitious and would like to know where you stand in their eyes when it comes to promotion or other career development prospects.

Ask what you could do to improve or consolidate those prospects such as learning or improving a new hard or soft skill(s) that would make you either better placed for promotion or mean you can offer more value to your employer in your current role.

Even if you approach things in the right way there are no guarantees a salary raise will be handed to you. But it should mean there is a good chance one will be approved and that, if not, there is no negative fall-out. You can then take a decision on your next step in a calm, collected and controlled way.

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Written by John Adam

John has almost 10 years of experience as a writer and editor on consumer finance and investment topics. An entrepreneur, he has one successful exit behind him and currently writes and consults freelance while enthusiastically pursuing hobbies he's not very good at such as football, squash and raising a small child.

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