Jul 17, 2023
How to Negotiate a Raise
Negotiating a raise can feel daunting, but it’s a crucial step toward maintaining your financial well-being. From aligning your salary with your market value to ensuring your compensation keeps pace with inflation, regular pay increases could be vital to maximizing your earning potential, both now and in the long run.
If you’re worried about how to talk to your boss about a salary increase, you’re not alone, especially if you’re early in your career. But by doing your homework and preparing for a conversation with your employer, you can learn how to negotiate a raise with confidence.
Why you should negotiate a raise
As you progress through your career, your market value tends to increase. Your skills and experience continue to grow, and you want your compensation to reflect that progress. And without regular raises, inflation can slowly chip away at your purchasing power over time. Plus, there are real dangers to wage stagnation, as many employers calculate salary increases based on your existing rate of pay; if you look for a new job, some companies may base your salary on what you made at your old one.
Advocating for fair compensation can also help foster equality in your workplace. Many people feel reluctant to start a conversation about salary with their employer, and this can be especially difficult for marginalized groups like women, people of color, and LGBTQ+ individuals who have historically faced pay inequities. According to the U.S. Department of Labor, women are paid an average of 87.3% of what men in the same roles earn, and the disparity is even greater for Black and Hispanic women. And LGBTQ+ workers make about 90 cents for every dollar earned by their heterosexual and cisgendered counterparts, with LGBTQ+ people of color seeing an even bigger wage gap, according to Human Rights Campaign. By taking the initiative to start an open conversation about salary at your workplace, you may have an opportunity to support a more inclusive and equitable work environment.
At the end of the day, you can’t necessarily rely on your employer to proactively raise your pay. It’s up to you to advocate for yourself to ensure your salary stays in line with your market value and keeps pace with inflation.
To help you prepare to have that conversation with your manager, keep these salary negotiation tips in mind:
Research your market value and inflation
Before starting a salary negotiation, research the market value for your role, including your experience level and geographical location. By gathering relevant data to support your argument, you can focus the conversation on your objective worth as an employee. A few places to begin your research are Payscale.com, Salary.com, Glassdoor.com, and the U.S. Bureau of Labor Statistics.
Another data point that can be useful for your salary negotiation is the inflation rate. While some companies give annual cost-of-living raises across the board, that’s not the case at every employer. And cost-of-living raises don’t always reflect the actual inflation rate. You can find detailed information about inflation from the U.S. Bureau of Labor Statistics, including the Consumer Price Index and a handy inflation calculator that shows how your purchasing power has changed over time.
The goal of your research is to determine a reasonable raise to ask for by identifying the minimum and maximum compensation range based on your role, location, and qualifications. The average annual raise percentage varies across locations and industries, so be sure to factor in the specifics of your personal scenario to land on the salary increase you want to request. You might also learn through your research that negotiating your job title could significantly increase your market value. Consider adding a title change to your salary negotiation if it makes sense for your job responsibilities and qualifications.
Use the briefcase technique for salary negotiation
The briefcase technique, popularized by personal finance writer Ramit Sethi, can be a helpful strategy for approaching salary negotiations. Here’s how it works: prepare a concise document that summarizes your market and inflation research, along with your skills, experience, and notable accomplishments. Present this document during the conversation with your employer to prove the value of your work with relevant data and reinforce your raise request. This shows your employer that you’ve done your homework and allows you to make a compelling case for a salary increase.
For an extra dose of credibility, consider creating a second document listing your accomplishments and testimonials from coworkers and superiors, specifically highlighting achievements that go above and beyond your job description. If you can demonstrate how your efforts have increased productivity or revenue, your accomplishments will speak for themselves, boosting your chances of a raise.
View the salary negotiation as a conversation
With your research in hand and your document prepared, it’s time to ask your boss for a meeting to discuss your salary. Remember that you want to have a genuine conversation; if your boss initially says no, you don’t have to stop the negotiation. Instead, engage in a collegial dialogue to understand their perspective and help them see yours. Here are a few techniques you can use to keep the conversation alive:
- Actively listen to your boss’s response and any concerns they raise.
- Show empathy by acknowledging their concerns and demonstrating that you see their point of view.
- Reinforce your value by highlighting the accomplishments, market value research, and inflation data you’ve collected.
- Emphasize how your efforts have positively impacted the company, specifically with the data that matters most to your employer.
- Continuously repeat this cycle of proving your value, listening, empathizing, and reinforcing your contributions.
By maintaining a friendly and open conversation, you increase the chances of reaching a favorable outcome in your salary negotiation. Remember that what you say when asking for a raise should be based on your research and accomplishments, not how you feel. Presenting the facts gives your employer data they can use to justify the raise you’re asking for.
Practice your conversation ahead of time
As with a job interview or an important presentation, mastering the negotiation process requires practice. Rehearsing your talking points, responses, and body language before your meeting with your employer will help prepare you for what might be a nerve-wracking moment. Consider recording yourself or role-playing with a friend to identify any areas for improvement such as slouched posture or a robotic voice. Anticipate potential scenarios and prepare confident responses, refining your delivery.
By practicing ahead of time, you’ll be better equipped to handle the salary negotiation with composure and achieve your desired outcome. If you’ve never thought through how to negotiate a raise before, this is your opportunity to find out how it feels, work through your nerves, and address any unexpected barriers that arise.
Don’t let hesitation hold you back
Understanding how to negotiate a raise has implications both now and in the future. In the immediate term, even a small increase in salary can represent a significant benefit to your budget, especially in the early stages of your career. And negotiating a raise will also help maintain your purchasing power as inflation grows over time. Once you know how to negotiate a raise and do it successfully, you’ll feel much more prepared to keep it up as you progress through your career.
With adequate research, preparation, and engaging in an open conversation, you can approach the salary negotiation process with confidence. And if you still feel hesitant, remember that advocating for fair compensation not only benefits you, but also may contribute to a more equitable workplace for all. Start preparing today and take control of your earning potential for tomorrow.
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