When I first entered the world of full-time work, one of the things I had to figure out was how to negotiate my salary. Now this is definitely not something they teach at school and there’s no one in the workplace giving you the rundown on how it all works.
This means you’ve got to figure it out for yourself through trial and error (and if you’re lucky a family member, friend or colleague might share some of their tips).
The sad thing is that by shrouding the entire process in mystery, you can end up with much less than you deserve, which can have a massive impact over your working career.
Companies will rarely approach you with their best offer or a 10% pay rise on a silver platter. They will wait for you to ask for it. If you think about yourself as a service that your employer is purchasing, why would they go ahead and offer to pay 10% more for that service if they don’t need to?
You may think that your employer will see your hard work and achievements and decide you deserve more. Unfortunately, in most cases, working harder isn’t enough to guarantee a raise, so you have to ask for it.
Learn more about the books mentioned in the video: Never Split The Difference, Getting To Yes and Rejection Proof.
Working out your key numbers
First things first – work out what you actually want and why you deserve it.
Salary negotiation experts suggest working out your three key figures, your wish, want and walk numbers.
WISH – This is the crazy number that you don’t think could possibly be accepted by your employer.
WANT – This is the number that you want to be paid and that you think is appropriate compensation for all of the hard work you do.
WALK – Finally, this is the number where you say to yourself, “I’m worth more than this and I can be more fairly compensated elsewhere.”
Understand your audience, industry and organisational pay structure (aka do your research)
Some organisations have transparent pay, some have set structured scales, some base it off other competitors and other organisations pay based on time or experience. Know how your company works and chat with your colleagues about the way they’ve approached it in the past.
Here are a few resources to gain a better understanding of your role’s industry rate:
- Seek: An Aussie favourite, use Seek to do your research and work out what your role is currently worth. Do you have in-demand skills that employers are actively recruiting for? Are there skills you can learn that may increase your value to your employer?
- Glassdoor: A website that offers a sneak peek into what other employees are saying anonymously about the company and the salary they receive.
- PayScale: Use this site to find average salaries at different companies and average salaries for different roles across the industry. This will help formulate your wish, want and walk numbers.
- Ask a friend: Ask others who work in the same industry and are at a similar level to you about their salary. This will give you an idea of the current salaries being offered. Even better if a colleague is willing to shed some light on what your employer is shelling out for their role.
- Google it: Research online for different companies and roles alongside the word “salary”. Maybe try “salaries at XYZ” or “how much do XYZ’s earn”. You’ll be amazed at what information you can find readily available online!
Build a case for a pay rise
Your case should include things like client feedback, product improvements, additional training & responsibilities you’ve taken on during the year.
Your manager won’t recall everything that you’ve done during the year so make it easy for them, especially if they need to advocate for your pay rise higher up, or split a certain amount between multiple employees. Give them reasons and evidence to justify your request.
Just because you know your worth, doesn’t mean that everyone else will.
Practice with a trusted friend or family member
Practice explaining your case and exactly what you want. How will you react if your manager responds by saying “no” directly to you? How will you bring up the topic in the conversation? What’s your plan of attack?
Even if your manager is your best friend, this is a serious discussion, so make sure they see it that way. Take the emotion out of it and approach the conversation as a business meeting.
Be willing to compromise
The company may only be able/willing to increase your salary by X amount, but that doesn’t mean that you can’t combine it with other non-monetary benefits such as extra annual leave, additional training, commissions/bonuses, equity, an afternoon off each month etc. Get creative!
It can certainly be a nerve-wracking experience, but by taking some steps to prepare for the conversation, you’ll improve your chances of successfully navigating the salary negotiation conversation in the direction you want.