5 Steps to help you negotiate a pay rise
Seeing other businesses offer their employees pay rises to help them cope with rising costs will have many of us thinking how they should approach their employers for a pay rise.
How much you’re paid is certainly one of the highest motivating factors for every employee. What benefits and the environment they work in are also increasingly important. After staying several years at the same company, you’ll definitely start to consider negotiating for a pay raise, not just as part of your career growth but also to cope with inflation.
Getting the best outcome needs both courage and, of course, skills in salary negotiation. We share with you how you should approach your next salary negotiation.
How often should you ask for a pay rise?
Many experts say you shouldn’t ask for a pay rise more than once a year. However, there are some exceptions. For example if your boss specifically said that they’ll discuss your salary again in the next four or five months, then asking after this period is ok.
Another exception may be if an employee lands a very important account, which can potentially bring in a significant amount of money to the company. For example, a sales manager who closes a multi-million-pound deal, has a good reason to negotiate a raise.
What factors will your employer consider before giving you a pay rise?
Before you talk to your manager about a rise, it is important to consider the factors that most employers look at in order to decide whether to give an employee a rise. They will look at:
Pay Rise Formula
Proficiency largely focuses on your set of skills. Your boss will look at how you have improved through the years of doing your job at the company.
#2 Length of service at the company
Another factor they’ll consider is how long you have been worked at the company. A company wants their valuable employees to continue to work for them because they’re familiar with the company’s culture and the things that need to get done. The company doesn’t have to spend money training a new employee to do the same job, or recruiting new employees.
Every employee is expected to do the job they are being paid for, however, if someone is working over and beyond what is expected to help the company achieve its goals, then a company is more likely to consider a salary negotiation more positively.
5 Steps to take to negotiate your pay rise
#1 Choose the right time
Employers have a lot of things to think about. Don’t ask for a pay raise at a bad time when your employer is really busy, or trying to meet an important deadline. The best time is during the regular pay review time, which for most companies is during performance reviews or at the end of the year.
Some contractual workers usually negotiate when they sign a new contract or at the end of the financial year.
#2 What is your market value?
Research what other people are being paid in similar positions in other companies in the industry. You can usually find local salary surveys that will give you a good idea about whether your salary is competitive. The key is to know how much the industry is paying people who have the same job.
#3 Have a strong business case
To negotiate a pay raise you’ll need to build your business case. Prepare information about what specific contribution you’ve made to the company and what skills you bring to the company and team which have helped the company achieve its business goals.
#4 Don’t just go for a pay rise, what other benefits could you ask for?
Although money is your ultimate aim, there are other things that you can negotiate for, such as a company car or a flexible work environment.
#5 Take your time to consider any pay rise being offered
If you’ve been made an offer, analyse it carefully, especially if it is not what you expected. You must consider whether it’s close enough to what you wanted or if the offer is reasonable enough. If you have been made an initial offer, don’t be afraid to ask for a bit more. As in all negotiations the first offer, isn’t usually the final offer. Remember your boss can only say no.
Negotiating a pay rise shouldn’t be a stressful matter as long as both you and your boss are open and have a mutual desire to keep the relationship going. It is just a case of knowing when and how to do it.