Here are all the tips you need to negotiate your salary and get that all-important pay rise that you deserve.
Salary is the main source of income for the vast majority of people, so learning how to negotiate and prove your value can result in a huge increase in your quality of life. This will put you in the driving seat to leverage what you want, whether that’s more money, better projects, more flexible working or other perks, the choice is yours.
Negotiating your salary can be very nerve-wracking, although after being on both sides of the table, I can tell you it’s tough from either side.
It is key to remember that this negotiation should be collaborative, where you are working through a problem together, not adversarial. You both have the same goal which is to ensure you keep providing great value to the company and compensated fairly for that work.
Step 1 – Find the Salary Range for Your Market Value
The first step is to understand the salary range for someone with your skill set in the market. There are a number of ways to do this and ideally using a mixture of as many sources as possible will give you a broad understanding that you can take forward.
One of the easiest ways is to use online resources such as Glassdoor and Salary.com. These are excellent tools to get to understand the market rates for certain job types. You can look at the industry, job type, even down to the company you work for.
You can also ask friends or family, search on Google, ask colleagues within the same industry or you may even have a progression salary matrix at your company. Just try and make the research as specific to your location and skills as possible so you have credible and accurate sources.
With a salary range, you now have a benchmark to set your expectations and gives you a better negotiating position. Many people go into a salary negotiation with a fixed number that they feel is right and when challenged on it, struggle to justify the number. This will now give you a salary range that’s based on facts that you can demonstrate.
Step 2 – Know and Prove Your Value (or where to focus)
Often top performers don’t realise how much value they’re truly worth to the company they work for. Many people get stuck in the cycle of doing their day-to-day routine without stepping back and asking why or how this benefits the company.
Most jobs either directly or indirectly affect one of these 3 core areas:
These all drive increased profitability and efficiency within the organisation, and you need to make sure you understand and can articulate how you’ve contributed to these statistics.
Show You’re Generating More Revenue
Revenue is the lifeblood of any business, and if you’ve helped influence it through driving sales, leads or customer retention, make it known. Many people that work in a sales orientated role have targets, which does make it somewhat easier to track performance and the value you deliver.
However, there are many other roles that have direct client contact that may go under the radar. This is especially true for the renewal of existing customers, which is usually the key form of revenue for any business.
If you’ve helped keep a client happy and they’ve given you brilliant feedback, make sure to record it and link it to client retention within your reviews.
Thinking in this way also opens up new avenues. For example, if you can ascertain whether a client may benefit from an additional product, you can pass this over to the sales team as a lead. If they successfully land the deal you’ve now directly contributed to increasing revenue and more than likely placing you firmly among the top performers within your team.
Highlight Where You’ve Reduced Costs
Businesses are built with processes and systems. These are either performed by people, technology or outsourced to 3rd parties, although all cost money to deliver.
If you’ve helped to reduced costs by identifying areas within the business that weren’t good value for money and took action on it, make sure you record it and ideally quantify it.
Even if you haven’t contributed to cost savings now, by reframing how you think about certain aspects of your job and how much they cost it should help identify opportunities.
Demonstrate Where You’ve Increased Efficiency
Efficiency is something that often gets overlooked because unless it is a major change, there often isn’t any cost savings attached. Although that doesn’t mean it should be ignored or not pursued.
Increasing efficiency is basically doing more with less. So if you have saved time on a process, this now gives them additional time to work on more value add activities, benefitting the company as a whole.
This efficiency can be anything from automating processes, delivering a project early, restructuring a team or identifying areas for improvement. Whatever it is, make sure you capture this benefit as the value you have contributed to the company.
How to Show Your Value at Work
Make sure you keep a record of the value you’ve delivered to the company so you can use it in your next review and even your next job interview.
Thinking in this way will show you are a results-orientated person which will resonate with all levels of management.
Even just looking at it in a selfish manner, if you perform well it makes your boss look good. So when it comes to your salary review, they’re more likely to want to keep you in the team, allowing you to use that as leverage to get your well-deserved salary increase.
As an Accountant by profession, you can imagine how I live and breathe analysis on all 3 of these factors. However, it always surprises me how many people ignore the value they contribute to the company, making it difficult to justify any changes in salary.
Although now you’re armed with the knowledge, that won’t be you!
Step 3 – Be a Top Performer (or make yourself visible)
Many people work extremely hard at their job, which is absolutely brilliant as that’s the hardest step. What they often overlook is who actually knows about it.
Even if your direct boss or manager knows about all the value you deliver, if the people that make the salary decisions within the organisation aren’t aware, making the case for your pay rise may become difficult.
To combat this, aim to put yourself forward for projects and initiatives that have the most visibility. Usually, the projects that are more visible are because senior management are placing a high level of importance on them due to the value they bring to the organisation.
This gives the dual benefit of increasing your exposure to senior management and also increasing the opportunity you have to deliver more value to the organisation. Both of which stand you in good stead when you negotiate your salary.
Although, I do need to add a note that you also need to deliver!
Step 4 – How to Discuss Salary With Your Boss (the right way!)
You don’t want to march up to your boss and demand a pay rise. This will lead them to become defensive and immediately look for reasons why you shouldn’t have a salary increase.
Instead, you want to ask them for a meeting to discuss your performance, framing it around your desire to deliver more value to the company. This initial contact can be done over email, phone, video or in-person, potentially in a 121 where the subject of you and your performance can naturally arise.
Now you’ve secured a meeting, this is where your research and value come into the mix.
Chances are that your boss already has a broad salary range in their mind for how much value someone in your position is worth. Although when you analyse a job based on value, so how much revenue, cost savings and efficiency are delivered, very few positions, even in the same team are the same.
Now, using your research you can demonstrate in detail exactly what value you’ve delivered to the company and what those skills are worth in the market. Make sure to ask for what you expect, or even more if the salary range from your research permits it. Although don’t be unreasonable and risk the meeting deteriorating into an argument, you need to be collaborative and encourage your boss to help you through the problem together. For more detail on what to say when asking for a pay rise, make sure to read step 6.
However, you don’t stop there. You need to think of this discussion like a collaborative investment, where you work with your boss to overcome the problem together. Remember that if you can get an extra £5,000-£10,000 per year it’s worth spending even a few months to get it. That value over your lifetime can add up to a significant sum and even compound as future pay raises will be based off a higher value.
It is key to remember that people are inherently selfish, so think of the situation from your boss’s perspective. What do they gain from giving you more money? A lot of the time they’ll think, not much, and unless you’re about to leave they don’t want to rock the boat with their boss by pushing for or having to explain your pay rise.
This leads you onto step 5, where you develop a plan to increase your value and performance. This will help both you and your boss, helping them deliver more value from their team so they’ll be a lot more willing to push for your pay rise.
Step 5 – Develop a Plan to Increase Your Value & Performance
A very common thought process when someone wants to get a salary increase is to equate that to their skills and think they immediately need to start learning something new.
Whilst learning something new can be an excellent way to improve your value, there are often easier and faster ways to enhance your value to the company.
Remember that you were hired in the first place because of your skillset, although a lot of people don’t fully leverage their current skills and put themselves forward.
As part of your salary and performance review, you may work on a longer-term plan to increase your value and performance over the next 3 to 6 months. This will ideally be with a set of objectives that will equate to a salary increase if achieved.
Working with your boss in this way will give you a clear set of objectives and goals to focus on that are aligned to the expectations of your manager and will help justify your salary increase.
Collaboratively coming up with these objectives will help you know what your boss truly deems them as valuable to the company. Although it’s definitely a good idea to prepare beforehand so you can suggest areas of focus that align to what you know you can achieve and want to work on.
Just remember to think of these based around how you can increase revenue, save costs and improve efficiency. They also need to be SMART so they can be tracked and you know when you’ve achieved it. SMART stands for Specific, Measurable, Action-Orientated, Time-bound so they can all be tracked. Click here for more information on how to set SMART financial goals & objectives.
This could be anything from reviewing some of the external contracts in the department and saving X thousand or training people in the team to work more efficiently, saving XX hours on a process per month so they can add more value elsewhere.
Really the options are endless, although just make sure they align to what your boss and your organisation deem as valuable, as then they’re more likely to reward you for it.
Now as you go through these objectives, ensure you keep your boss updated on progress. This can be within 121s, or even just periodically through email. What you are aiming to do is make sure it’s no surprise to them at all once the 3-6 months have gone by and you come back asking for your pay rise.
Step 6 – What to Say When Asking for a Pay Rise
Right, so now you’ve done the hard work, it’s now time to ask for that pay rise.
Many people back down at this crucial hurdle and often undervalue themselves, even with thorough research and being able to fully demonstrate their value. Whether you’re a current internal employee speaking to your boss or in an interview and the question of salary expectations comes up, you need to focus on your research and the value you can deliver to them and the company.
If you’ve followed steps 1 to 5, you should have thoroughly researched the market value for your skills and can articulate what value you have or will deliver for the organisation. You may also have set solid objectives that you’ve completed where you can thoroughly demonstrate how this has helped the organisation.
When asking for a pay rise, present a range based on your research. Highlight that you’ve reviewed the market rates for someone with your skills and X years of experience, which could be, as an example, £45,000 to £60,000.
Now you have to demonstrate why you believe you should be paid on the upper end of that range based on the value you can deliver to the company.
If you’re an internal employee your current pay can be within this range, although ideally it’s at the lower end, giving you scope to move up.
Have an ideal number in your head within that range, but make sure it’s a stretched target, so something that is slightly above what you would expect for someone with your skills, although would still be justifiable. Then when the question, “what are your salary expectations” arises, you can say that’s what you feel is a fair value for your skills and the value you deliver.
Also have a number that you’re willing to settle at so you have some flexibility in the negotiation, but know in advance where you draw the line so you don’t come out of the review feeling that you dropped your value too low.
It is key to focus on collaboration, trying to frame your salary as a hurdle that needs to be worked through together. Often your boss doesn’t have the final decision on your salary and it needs approval from either their boss, and potentiality even HR and Finance depending on the size.
As a result, the more information you can provide on exactly what value you have delivered will help build the case that you are worth more than you are currently being paid.
Then they can see first hand that all you want to be is compensated fairly for the value you deliver for the organisation.
How to Negotiate Your Salary Via Email
Negotiating your salary via email can be difficult as the tone is more than likely going to be read negatively. This is why it’s essential to structure your email in a certain way and avoid common pitfalls.
If you can, try and avoid relying solely on email by introducing other forms of communication, whether that’s a phone call or face to face. Email can be an excellent way to start the process, although collaboratively working through different options and scenarios can be difficult.
Where people run into problems is where they try and put too much information in one communication. Being concise will ensure you get your point across without any ambiguity. Long emails can allow people to avoid answering the main question by isolating one part and you also risk revealing too many details up front.
If to try to imagine this salary negotiation as a game of chess being played over email, you wouldn’t dream of writing your next 5 moves at once, so make sure to treat this the same way.
The key is to make one good move with each communication and remember that the tone in your email is more than likely going to be read negatively, so make sure to always end positively.
How Often Should You Get A Pay Rise
You should expect a salary review each year in line with your performance review. Although this doesn’t necessarily mean it will be an amount you deserve without putting your case forward.
Depending on where you are in your career, this annual review could just be an exercise to ensure your salary (barely) keeps up with inflation with the paltry 1-2%.
If you’re early on in a professional career, you can expect larger increases as your skills and value are still rapidly accelerating. This is especially true if you are taking any professional exams as they’re good milestones and may have even been pre-agreed when you started at the company.
However, as the saying goes, all good things must come to an end, and that’s also true with salary growth once you’re a few years into your profession. Although, this is where many people just accept their current reality of the minuscule annual increases, but not you.
It is key to remember that the world is desperate for skilled labour and companies need talent to move forward. So using the knowledge on this page and your current skill set, you can increase the value you deliver to your company and leverage that for a better salary increase during your next review.
How to Write a Business Case for a Pay Rise
Some employers require a business case to be able to justify giving you a pay rise. This provides solid evidence of your value to the company and what your skills are worth in the market.
Depending on the structure of your organisation, the final decision to grant your pay rise may not be with your line manager. This business case will also serve as a tool to help your manager justify why you deserve a pay rise to their manager.
This document can also be used as an extra hoop to jump through if you want to negotiate your salary, which adds another layer of resistance. Many people just aren’t willing to put in that extra bit of work to sell themselves, don’t let that be you!
Even if you aren’t required to submit a business case at your company, I would seriously recommend writing one for yourself. It will help you note down all of your attributes and how that aligns with delivering value to the company, giving you the information you need to form a strong case in your negotiation.
I’ve had to do one of these personally and below I’ll highlight some quick tips. For structure, it may be best to think of it using steps 1, 2 & 5 that we’ve gone through in detail previously that is properly researched and written down in a logical manner that showcases your value.
Demonstrate Your Current Value (Step 2)
Here is where you document in detail all of the value you have delivered to the business in your current role, making sure to align it to the core business drivers below.
- Increasing revenue
- Decreasing costs
- Improving efficiency
This helps to build the case and justify why you are already operating at a higher level.
Your Current Salary vs Market Value (Step 1)
Understanding how much your skills and experience are worth in the market helps to frame your request and set your expectations. Ideally focus on finding a range that you can put forward, including evidence. This will include finding similar roles in other companies or industries, although the more specific you can be the better to help avoid any ambiguity or room for it to be challenged.
It will also help you understand the progression and future prospects of the role you are in now. This may also be a very useful exercise to understand your 3, 5 and 10-year plan which is something you could even discuss during this business case.
Develop a Plan to Increase Your Value & Performance (Step 5)
This is a crucial step that most people miss. They highlight what they’ve done in the past and how this warrants a salary increase, however, the key thing to note is that this is in the past, so has already happened.
Whilst what you have done so far is very important, what your boss wants to know is what value you will provide in the future, so what value they will get back from their increased investment in you.
This is why you need to frame it in a way that shows what value you will deliver in the future. You can highlight all the value that you’ve already delivered, which is an excellent benchmark and say that even if you continue at the same rate, this is what you will deliver.
However, now you also go a step further and suggest some key deliverables that you are aiming towards that will solidify your case and make you stand out. So research and document the next areas of value you are going to work on that will result in even more value.
When you frame your business case in this way, you make sure to align your work to how your boss and company will benefit in the future, significantly increasing the chances for you to get a pay rise.
How Long Should You Stay At A Job Without a Promotion or Pay Rise?
Gone are the days of people having a job for life, and often this is for good reason. Company loyalty is very rarely rewarded, where pay rises are often difficult to receive and promotions are frequently given to external candidates to “get a fresh perspective”.
Unfortunately, there isn’t a magic number of years to stay in a job to maximise your salary. The average number of years for someone to stay in a job is just over 4, although you need to do what’s right for you.
Although if you are consistently passed over for promotions and told there’s no money for a pay rise, even when putting forward a solid case using the material in this post, then you need to know when enough is enough and start to explore external options.
Going externally into the market can be an excellent way to boost your career prospects by getting more varied experience and give you the potential to secure a promotion or pay rise.
However, there is a limit to how often you can do this. Employers want the confidence that you’re going to deliver value to them for at least the short to medium term. Hiring people is expensive, with high recruitment fees and the time needed to train people, so if you are constantly rotating jobs this will raise red flags and they won’t feel they’ll get the value they’re looking for.
The number of years you need to work for each company does vary by industry and even age, although it is commonly recommended to say in a job for at least 1 to 2 years.
Although if you do get a job offer, you don’t necessarily need to leave your current company. You can often successfully use this as leverage to negotiate your salary with your current company if you’re a valuable member of the team, just make sure to do it properly to not damage any relationships.
How to Ask Your Employer to Match a Job Offer
This can often be a very successful way to get a pay rise, although it needs to be done in the right way. The overarching message needs to emphasise the you really want to continue working for your current company, but just want to be compensated fairly based on your value.
The hiring manager at the other company often gives you a very short time window to make your decision, which does add another layer of complexity.
With this in mind, you need to act fast. Contact your manager as soon as possible and ask if you can speak to them about something quite urgent and important.
Calling, emailing or direct messaging them is most likely the best way to get their attention, you just need to emphasise the importance.
This method has worked for me in the past, although I would say that if you are going to use this method, you really need to be laying the groundwork early, building a good foundation of trust and value so they see you as an asset to the company.
You can then use that to your advantage and leverage it to get a pay rise.
Before you contact your manager, you need to understand what you are willing to accept so you already know your position. Depending on your job, this could be an exact match, slightly above, or even below if you like working where you are and it involves other perks such as flexible working or more exciting projects.
Also, have an idea of some other perks that you can add into the negotiation if you get a challenge on salary. This can be anything that is valuable to you which isn’t too much of a stretch for your employer, this could be anything but I’ll list a few examples below to give you some ideas.
- More flexible working, such as flexitime or working from home
- Training support to enhance your skills and value
- Bonus, based on company performance or company performance
- More frequent 121s or performance reviews
- Stock options
- More holidays
- Company car
- Better severance package
As mentioned above, you need to emphasise that you want to continue working at the company. Although as a word of warning, please only use this tactic if you are genuinely considering leaving as there’s always the risk they call your bluff and it will damage your credibility.
If you already know you won’t leave your current job, make sure to frame the conversation this way from the start. This takes a lot of the urgency out of the situation, although also decreases your leverage, but you can still use this to open up the negotiation and schedule a performance/salary review.
Also remember that you will only be able to use this tactic a few times maximum, most likely only once as it has the potential to damage trust and relationships, so make it count!
How to Discuss Salary in an Interview
By reading this post I’m sure you’ll be well equipped to discuss salary in an interview. Although just to reiterate, doing your research is the key step. You don’t want to start at a company and find out that you’re below everyone else just because you didn’t take the time to fully understand the market value for your skills and increase your expectations.
When in the interview, give the salary range for someone with your skills from your research and where you fall in that range. Then explain that your aspiration is to be in the upper end of the range, whilst highlighting your success in previous roles, ideally with examples and how you’re going to bring that to this role.
If you are challenged on the numbers you have put forward if they are above what other candidates are requesting then align it to return on investment. Demonstrate how your skills and knowledge will add additional value to the business which will more than offset the difference.
If they won’t go higher on salary remember that they may be constrained by budgets within this financial year or be given a cap that they cannot exceed for the role. This can often be used as an excuse but sometimes does hold some merit, so if you get this challenge, try and ask for a salary review again in 6 months once you have demonstrated your value.
You can also negotiate more than just salary, such as stock options, bonuses, training or flexible working. This can be anything that you find valuable that may not be too demanding for the employer as it’s often these hidden perks that can provide a lot of value from a job.
Do Employers Expect You to Negotiate Salary?
In short, yes, Salary.com conducted a study which shows 84% of employers expect you to negotiate your salary during the interview stage and zero employers reported demoting or firing an employee for asking for a raise.
If you think about it from your hiring manager’s or boss’s perspective, they may even welcome the negotiation, especially if you can demonstrate how you are going to add more value to the business. This will also help to separate yourself from other candidates or other members of the team as you’re efforts will be more aligned to value, which if you can deliver will make them look good.
There’s also the notion of “if you don’t ask, you don’t get” which is especially true for salary increases. In fact, a report from PayScale reported that 57% of people have never negotiated their salary, so don’t let that be you. Your boss is tasked with delivering as much value to the business as possible with the resources they are given.
By following the steps outlined in this post, you will have understood how your role generates value for the business (step 2) and developed a plan to help increase your value even further (step 5). Now you just have to make sure to use it to your advantage and negotiate your salary the right way!
Be Careful Not to Significantly Oversell Yourself
I am fully behind negotiating your true value, or even slightly above your value. If you’re a top candidate and know you should be paid on the upper end of the market range, then push for it.
Although if you’re not, make sure you don’t set yourself up for failure and promise the world. Have a look at Step 5, which shows how to develop a plan to increase your performance.
If you’re worried about overselling your capability then try and ask for more training or exposure to more demanding work to help build up your skills. This also works really well when developing a 6 to 12-month plan linked to a salary review, so make sure you highlight your intentions, even by just saying you want to increase your value to the company.
Also remember that imposter syndrome is a real thing and people often feel that they aren’t ready for that next step when they are. Don’t let that inner voice win and stretch to your potential.
Be Careful Not to Damage Relationships
Damaging relationships can also harm your long term prospects. If you really pushed and were adversarial, you could potentially get an extra few hundred, or even a few thousand over the perceived maximum when discussing salary.
Although this could do more harm than good if you are then seen as being stubborn or money-hungry trying to milk the position for everything it’s worth.
Doing this will show you in a negative light and potentially harm any future progression and career prospects. When future promotions come up they may not want to put you forward for recommendation if they think you’ll be adversarial and show them in a negative light.
Remember, to think of each negotiation from both sides and try to view salary negotiations as a collaborative problem solving exercise. When you do this, you’ll be surprised how people will happily work with you to help overcome the situation, especially when there’s also value for them too.
Hi, I’m John. I’ve always had a keen interest in Finance, so much so that I’ve made a career out of it! This site is a place where I can share everything I’ve learned as well as give me the excuse to research certain topics.
Check out my about page for more info.