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November 26, 2020

How to Negotiate for a Higher Salary (for New and Existing Jobs)

How to Negotiate for a Higher Salary (for New and Existing Jobs)

One of the best ways to get out of debt is to generate a higher income or get another income source. And you can do this by either: asking for a raise, looking for another job or getting a side hustle. For this blog post we will discuss how to negotiate for a higher salary. This can be a nerve-wracking experience, especially if you are the type of person who avoids conflict. However, sometimes you don’t have a choice but either to resign (due to various reasons, not just the salary) or ask for a raise if you think the company is not being fair. Either way, you will still end up in the negotiation table - so, we hope the tips below will help you receive the pay that you think is best for you. As they say: “If you DON’T ask then the answer is always a big fat NO”, plus the tips below also apply if you are looking for another job. However, before you go marching to your boss’ office (or going to that interview), there are some things you should prepare first, to ensure you get the best possible result! 

What do I need to prepare before asking for a raise?

1. Consider whether you deserve the raise

This step is the most important, because it can make or break your negotiation. Considering this is akin to pre-empting the answers to your boss’ inevitable questions of: “Why do I need to pay you more than my other employees? What value can I get out of you that I’m not already getting? And are you ready to meet my expectations?”. This is when you should contemplate what you have achieved so far and what you are currently accomplishing in your current role. This also ties into how you have saved your organization’s resources and the value you have brought to the table. This doesn’t always have to be quantifiable, especially if you do not belong in the Sales department (but it definitely does help to quantify it, if possible). Evidence of your contribution can include how you have helped finish a project successfully, picking up the slack from an employee who has recently resigned, any task where you have gone over and above without getting extra credit, or always being the reliable person who puts in the overtime just to make sure everything will get finished on schedule. You can also ask for a raise if you find out that you are being paid lower than your colleagues who do the same type of work. (However, don’t bring this up to your boss when you ask for a raise because it looks seriously unprofessional. Focus instead on no. 2 (below).

2. Jot Down Your Accomplishments

After contemplating on no. 1 above, it’s now time to list down your accomplishments. It’s certainly best not to ask for a raise after 1 day of deciding you want one. Instead - like a warrior going to a battlefield - you need a plan and ammunition in your arsenal! List all of your accomplishments and highlight the particularly important things you have exerted a big effort towards, beyond the call of duty. Also, highlight those tasks and results you have achieved that have been crucial to your team’s success. On the latter, the best time to strike is when the iron is hot – so get ready to ask strategically after a major team success. 

3. Do Job Market Research 

Most job roles have what’s called an “industry standard”; each position has a salary level minimum, average, maximum and median. Take for example, the role of an accountant, which can have the range AU 40,773 to AU 81,865 (depending on area and position). Knowing the industry standard in your area will help you understand how much raise you can realistically ask for, and how your current salary compares to other in the field. 

4. Ask yourself why you wouldn’t get a raise?

As unfortunate as this reality is, your boss or HR manager will most probably fire away points as to why you should not have a raise, or why they should not give you your asking rate. So, prepare for these attacks and to be able to fire back with a smart and respectful counterattack. By anticipating the reasons, you can devise and rehearse a thoughtful response, so that you don’t choke up and can gain the upper hand in the conversation.

5. Is now even a good time to ask?

Here are some questions to ask yourself to ascertain if this is the right time to ask for a raise:

  • Is it time for your performance review?
  • Have you just finished a successful project?
  • Did you not get a raise last performance review (or you just got a small raise)?
  • Were you evaluated unfairly, without a discussion? 
  • Is your company having budget or revenue issues which could be used to justify not giving you a raise?
  • Is your boss, busy, overstressed or otherwise not in the right mental space to have that discussion?

If now is not the right time, continue preparing for your plan so when the right time finally comes, you will be ready.

6. Do not leave... yet!

If you are looking for a higher paying job, it helps if you don’t resign from your current job yet - and especially if you have bills to pay! You will feel more assertive in your ability to get the pay you want if you have the capacity to walk away when a prospective new employer cannot meet it. However, every situation is different - so be thoughtful in your approach.

Confrontation time! Let’s say you have prepared the per above and now you are ready to have the conversation with your boss or potential new employer…

Tips on How to Negotiate for a Higher Salary

1. Rehearse Your Responses

If you will be talking to your boss, have a dialogue in mind so you don’t lose track of what you’re going to say. For example: “I’ve been involved in this [ project ] in the last [indicate how long you’ve worked on the project]. I’ve also initiated [project] and this has resulted in  [indicate the project’s success]. I’ve also [indicate other tasks you have done] which has greatly helped our company [results]. Based on these accomplishments and industry standard [mention your salary research], I would like to ask if I can have this [raise amount]?”. By focusing on your accomplishments and the value you add to the company, you remind your employer how critical you are to the company’s success, and thus why they should want to ensure that you stay with them. Highlighting your prior achievements is also the best way to gain leverage in new job pay negotiations, too! 

2. Be Professional

As mentioned above, if you are asking for a raise because you discover that you are earning less than your colleagues at the same level, do not mention this at all, because it will call into question how you found out that private information in the first place. Instead, just focus on your accomplishments and skills. Don’t give an ultimatum or threaten to leave, either - you don’t want to risk losing your job or future opportunities (“I need this raise or else…”). You don’t want to come across as someone demanding. Be assertive, but say your points in a nice way, be patient and understanding. Including in being professional is to dress for the raise you are asking. If you are used to simple blouse and pants, up your style by dressing up another notch. It will add to your confidence as well and you will appear more serious. 

3. Ask Personally

Do not ask for a raise through email. It is best to deal with this in person. True it can be nerve-wracking, but if you believe you deserve the raise, you will exude more confidence by asking. However, knowing how busy your manager is, the last thing you want is to be interrupted when you’re having this important conversation. Further, your manager isn’t likely to agree to a pay rise on the spot. Instead of blind siding them, it’s better to let them know that you plan on discussing compensation during the meeting – that way it shows them that you are serious and prepared for the discussion, and it shows that you have the respect and decency to give them that same courtesy, too – and it’s more likely to work in your favour. 

4. Don’t give out too much personal information

This applies to interviews as well. Giving out personal information – such as how desperately you need the money because you have debts to pay - is a big no-no. If you divulge this kind of personal information, you will be perceived upon as somebody who lacks management skills or has poor decision-making abilities (even if you are the exact opposite and you are a star employee). However, this rule is not made of stone. If you were politely asked, you can give a subtle hint on why you need the increase. There are employers who think that people who need the money tend to work better than those who don’t. Still, you don’t need to tell them the whole story – it’s better to keep the conversation focused on the value you add to the organisation. 

5. Extra tips on asking for a raise: 

  1. If management agrees with your demands, be sure that this is put in writing. There are instances where the employee and employer have agreed, and then forgotten like nothing happened. A written document will help all parties to the agreement remember the finer details. 
  2. It’s also a red flag when the manager takes offence on questions related to the benefit package. If they are uncomfortable that you are trying to make a formulated decision by gathering data, then there is something wrong – and the better approach may be to look for jobs elsewhere. 
  3. Hope for the best but be prepared for the worst. If they don’t agree with your demand, don’t be disheartened. There are usually several factors that need to add up before an increase gets approved, especially if you are working for a big company. They might also not have the budget right now or they don’t have enough flexibility. 
  4. Looking for more pay rise advice? Check out this article by Seek.com.

That’s all for our top tips on how to negotiate for a higher salary, either in your current job or with a potential employer. We hope for the best in your negotiations, and if you get your desired rate, don’t forget to increase your debt repayments. Can’t wait for negotiations and need help with debt now? Just call us on 1300 003 328 or send us an email to enquiry@creditconsellors.com.au! 

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