Crack the salary negotiation code

Apr 01, 2019
Learn how to negotiate a salary increase in just three months.

Corporate environments often tend to be paradoxical – structured, yet malleable to the demands of prevalent workflows; expectations of sales growth despite budget cuts; increases in responsibilities, but a flat wage month- to-month. Sound familiar? On the bright side, you are not alone. We all want to be paid in alignment with the value we bring to the organisation. But most of us do not act because of a lack of knowledge of how to go about the pay raise negotiations, or simply a fear of rejection from the management team.

I might be stating the obvious here, but it is certainly an uphill task to enter wage negotiations and come out on top. The odds are intended to be stacked against you. With fiscal obligations to grow shareholder returns every year, the management team is not naturally inclined to the idea of giving out raises. Yet, it is in that mind-set where the opportunity resides. If you can articulate the value you bring to the company and communicate it appropriately to senior leadership, then you have placed yourself in a perfect position to ask for – and get – the raise you deserve.

So why is negotiating our salaries so rare?

Every employee is looking for a raise, but the knowledge of how to get one curiously remains a closely guarded secret. A recent survey conducted by Lincoln revealed that out of every 100 employees who felt they deserved a pay raise, only 39 of them eventually had the conversation with their manager. Of those 39, only 25 ended up getting the raise they asked for. The data clearly indicates two trends: that people are happy to be reactive rather than proactive when asking for raises (i.e. waiting for the raise to come to them rather than trying to get it by themselves); and structuring your argument in an agreeable and amicable way is an art in itself.

You don’t need tired hacks. You don’t need feel-good motivational speeches. You just need the exact systems, mind-sets and negotiation frameworks that are proven to make your organisation loosen the purse strings. However, as in any contest – be it in the realm of politics, sport or even war – you need a bulletproof strategy and that starts long before you step into the meeting room. In fact, the meeting room should simply be the culmination of your strategy because the preparatory work should be completed beforehand. While the battle is half won by deciding to initiate the conversation, we outline below how to conquer the other half.

The main thing to note is that we have split the timeline into four distinct segments: three months before the raise, two months before, one month before and two weeks before. Once again, the emphasis here is on the time spent before the eventual meeting.

Three months before you ask for a raise

T – 90 days: As you embark on this journey, the overarching thought that should always remain front and centre is that your business value needs to be justified in the context of organisational needs – not personal needs. The minute an employee asks for a raise to advance his or her own financial well-being, the conversation steers away from being a collectively beneficial topic to one with selfish interests. While a raise will ultimately enhance your financial health, the trick lies in framing this request in a way that encourages your employer to want to give you the raise on account of your outstanding value to the organisation.

At the three-month mark, you must therefore start taking inventory of your accomplishments and monitoring the results that your projects generate. While the processes are important, it is especially vital that the outcomes they provide are captured as well, as humans have a strong tendency to gravitate towards tangible (numerical) achievements. As an example, suppose you were part of a team that generated €1 million of incremental sales this quarter compared to the same time last year. Of this €1 million, how much did you bring in? That is the number you need to articulate. Of course, not all jobs are as clear-cut. If you work in an environment where performance is not defined by numbers, KPIs or milestones, then work with senior colleagues to formulate an idea of your role within your team and the broader organisation.

Another best practice to consider is sitting down with your manager for periodic performance updates on a monthly, if not bi-weekly, basis. This serves two purposes: it allows your manager to see that you are eager to succeed and grow on a professional level; and it enables you to understand the expectations set by your manager and benchmark your progress as time passes to ensure that you are positioning yourself best for ‘The Ask’.

Two months before you ask for a raise 

T – 60 days: At this point, you should be hitting your stride in terms of setting new goals as per your manager’s expectations, and then cruising past them. What better way to justify your value to an organisation than by highlighting those results? Book a meeting with your manager and run him or her through all you have done over the past month to add value to the organisation. Once again, focus on the results (i.e. show the time saving, cost efficiencies, revenue growth, etc.). A caveat here: ensure that you are not overstating your role in the organisation or giving off a boastful vibe. Subtlety is critical.

At the two-month stage, you should also have an idea of your target salary. The key factors to consider here are how it benchmarks to the industry and how well your company has been doing lately. Several approaches can help you with the former – recruitment agencies annually publish benchmark reports by job title and region, and websites such as Glassdoor or PayScale can provide further guidance. Use these resources to get a handle on what range is feasible given your company’s financial circumstances.

One month before you ask for a raise

T – 30 days: This is when you truly show that you are a team player, a problem solver and a firefighter all in one. Book a meeting with your manager and ask him or her about their most pressing issues. What keeps them up at night? Identify this problem and start working on creating a report or presentation on your solution for the problem. It is also a good idea to mention to him or her at this point that you are looking to have a discussion on compensation. This will prime him or her for your next meeting.

Two weeks before you ask for a raise

T – 15 days: Practice what you will say. You are committed, you have put in the work – all you have to do is reap the rewards. Remember that you are still likely to face resistance in the form of excuses like “budgetary constraints” or “cost-cutting pressure from above”. It is important to have a pre-defined script in place to answer these questions, many of which you can find online. These are generally boiler-plate responses that provide some wiggle room. It is up to you to remain resilient when faced with these obstacles.

Thinking beyond salary

The day has arrived. You walk in with your portfolio of work, your report and present it, communicating to your manager that you are competent, driven and highly effective. You can bring up the compensation aspect afterwards. By this point, you should your target number so you can lead the discussion and lay down an anchor point from which to base subsequent negotiations.

As any great sportsperson will tell you, always have a Plan B. If your manager cannot meet your salary expectations, negotiate stock options or other benefits that can get you closer to that goal. Alternatively, you can also bring up non-financial options such as the ability to work from home or receive extra holiday days. Identify your priorities and build a strategy around them.

Most people run from the idea of confrontation and negotiation for a multitude of reasons, ranging from fear to a belief that the organisation they work for would always have their best interests in mind anyway. While this may be the case, managers sometimes lose visibility of each individual’s true value to the organisation. Don’t be one of the many people who are overlooked. 

Orla Doyle is Group Marketing Manager at Lincoln Recruitment.