I was recently featured in CNBC sharing my tips about how you can negotiate your salary and so in this post we are going to cover 5 tips for how you can earn more money by asking for more, whether it’s asking for a raise at your current job or by negotiating a salary for your new job.
Table of Contents
Tip #1: Do Your Research
The single most important thing you can do is to be prepared and do your research before you ask for a raise.
Prior to the negotiation, you should thoroughly research what people in similar roles are making. As a starting point, look at websites with salary calculators like Glassdoor, PayScale and LinkedIn. The Bureau of Labor Statistics also publishes data that you should review.
Researching online should just be a starting point. You shouldn’t rely on it as your only source. Besides researching online, one of the best ways to determine what people in similar roles are making is by reaching out to recruiters in your area and asking them.
You should also be talking to friends, acquaintances, colleagues and former colleagues just to gather as much intel as you can. Discussing salaries is an uncomfortable conversation for most, but the more we normalize it, the more progress we can make towards earning what we are actually worth and closing the gender wage gap. The reality is, companies don’t want you to be discussing salaries, because then more people might be incentivized to ask for a raise if they realize that they aren’t being compensated properly, which is why some companies even have policies prohibiting you from discussing your salary. But ultimately, the only party that benefits from a policy like that is the company, not you.
Discussing salaries is an uncomfortable conversation for most, so when you’re trying to get a sense from friends or colleagues about what they are making, I would approach it as you are asking their advice on your situation. This requires you to be transparent. I would say something along the lines of “Hi Jimmy, I was hoping I could get your advice on something – I’m considering asking for a raise at my job. I have this many years of experience and these are my primary roles. I’m currently making $40k but just from some initial research I think asking for about $50k would be in line with my experience level. But since you’re very familiar with this industry, do you have any thoughts on if this is a reasonable salary ask?”
You really want to frame it as you are seeking advice from them on your situation, not that you’re trying to pry for information about their situation. That way they can decide to disclose as little or as much as they want about their situation without the awkwardness of you asking them point-blank ‘how much do you make’? I think you’ll be surprised that when you ask like this, people are pretty receptive to sharing information.
To recap, the most important step is going to be this research phase. The key is to start gathering as much information as possible about salary ranges, so you can get a better sense of your financial worth. You want to be looking online, but also talking to people–like recruiters and people who are in similar roles as you but also people who are a few years ahead of you in their careers.
Tip #2: Prepare a Precise Salary Ask
Now that you’ve done all of this research to figure out the general range that people in similar roles are making, the second step is to decide exactly what you want to ask for.
When you ask for your salary raise, you should present a concrete number or range based on the extensive research that you have done. It’s more effective to have a precise number like $44,000, rather than a rounded number like $40,000 or $50,000. It gives the impression that you understand the true value. So even if you decide through your research that you think somewhere in the range of $40,000 to $45,000 would be fair, I’d actually bump that up to say $41,000 to $46,000.
I also recommend asking for slightly more than you actually want, so that there’s room to negotiate down if necessary. You have to leave some wiggle room for yourself because ultimately a negotiation usually does involve back and forth, and they won’t necessarily agree to your first ask. My default, in almost all of my negotiations, I usually ask for about 30% more than what I actually want. Asking for 30% more works for me because in most cases, I come down a bit, and the other side feels happy because they feel like they’ve gotten me to concede a bit, but ultimately I am still able to walk away with more than I actually wanted. You’ll have to decide what that percentage is for you, but I do recommend asking for slightly more than your target.
Also come prepared with ideas for other forms of compensation you might be willing to accept if the company pushes back on your request for a salary raise, such as bonuses, stock options, flexibility in your work hours, support for continued education or other benefits.
Tip #3: Prepare Supporting Evidence
Tip #3 is to prepare supporting evidence. You want to be able to show your boss exactly why your ask is justified and the supporting evidence you provide should answer that question.
You want to come prepared with measurable examples of how you have provided value to the company. A statement such as, “I have increased __ by __%” is much more powerful than “I have helped the company.” You can fill in the blanks, but maybe it’s “I’ve increased revenue by 10%” or “I’ve increased the number of leads by 15%” or “I’ve increased productivity by 20%” or “I’ve brought in this client which resulted in $X of revenue”. Whatever it is, the more data-backed evidence you can come to the table with, the more likely you will get a raise.
Companies are data-driven and that’s why blanket statements like “I’ve helped the company” or “I’ve tried really hard” or “I’ve been loyal to the company” aren’t going to help you to negotiate your salary.
Start keeping a list of these types of measurable value that you’ve brought to the company, because otherwise it’s easy to forget. Even if you’re not ready to ask for a raise yet, you want to have something like this in your back pocket, so that when you decide to ask for a raise or are looking at new job offers, you’re equipped with a list of reasons why you deserve that raise or that higher salary. Just set a repeat alert in your calendar, once a month, to take a few minutes to review and add things to your list.
Tip #4: Practice Negotiating
Unfortunately, it’s rarely the case that a company is going to offer you a raise unprompted. There’s no incentive for them–if you’re getting the work done for them at this salary, why would they voluntarily offer you more? I think a lot of people have this mentality that the hard work will speak for itself, but that’s often just not the case. And like a lot of things in life, if you don’t ask, you don’t get.
Asking for a raise is something that many are uncomfortable doing–which is why many never ask for a raise–one study found that 60% of people said they had never negotiated a raise.
As a corporate lawyer, I do a lot of negotiating. I’ve negotiated these billion dollars deals for companies, and the reality is, even though my profession is largely based on my ability to negotiate, I didn’t become good overnight. Like anything, it takes practice. The more you practice negotiating, the better you will become and it’ll be less uncomfortable each time.
You have to think of a salary negotiation as a performance. I wouldn’t show up to a Broadway audition without hours and hours of practice, because i know the stakes–getting the part on Broadway could mean thousands of dollars. Same thing with negotiating a raise. Linda Babcock, an economics professor, estimates that negotiating your salary could equate to as much as $1.5 million of additional income over the course of your career. That’s a very high stakes performance, just like my Broadway audition example. Negotiating a salary is perhaps one of the most important negotiations you’ll ever participate in, so you don’t want it to be the first time you’ve ever negotiated.
Practice negotiating and getting used to the discomfort of it as often as you can prior to having the compensation conversation with your boss. It can be as simple as calling your credit card company to try to negotiate a lower interest rate on your credit card, or calling up the credit card company to try to negotiate higher limits, or negotiating down a medical bill, or going to a store and negotiating the price of an item. The more situations like this that you put yourself in, the better equipped you’ll be.
You should also practice with a friend. Make a list of all of the questions or objections you anticipate your boss will have, and run through each of your answers with your friend. One of the most common objections is that “we don’t have the budget to give you a raise”, so practice how you will confidently respond to that objection.
Tip #5: Frame Your Negotiation Correctly
Now that you’ve done all of the preparation, we’re ready to talk about tips for the actual negotiation. Attitude is key to a successful salary negotiation. Throughout the conversation, you want to express your gratitude for the job and how excited you are to further help the company.
In many cases, your boss may not actually be the final decision maker–so with that in mind, your conversation should be positive and focus on how you can help your boss look good. That way, if your boss is not the final decision maker, your boss is incentivized to become your advocate for your salary increase. The last thing you want to do is come off as adversarial–remember, you want your boss to be on your side.
A lot of people think of a salary negotiation as the employer sitting on one side of the table and the employee asking for the raise sitting on the other side. But that’s not how you want to think of it. You want to be on the same side of the table as them, and show that you’re a team and that by them giving you a raise, it’s going to help the team collectively move forward and accomplish goals and hit targets.
It should be framed as a win-win scenario so that you’re collaborators not adversaries. A win-lose scenario would leave your boss or company feeling like “Erika just extracted more money out of us.” A win-win scenario, which is what you want to accomplish, will leave your company feeling like, “I just agreed to Erika’s request for a raise because it’s a smart investment considering the return on investment the company will get. It’s a win!!” And that’s all in your control and all about how you frame the conversation – so you want to take the lead on focusing this conversation around why giving you a raise is a win for the company.
It’s also important to leave emotions out of the conversation. While it might be tempting to talk about how a salary raise would help you personally with X, Y or Z, this likely won’t help you in the negotiation. The central focus of your negotiation should be how you can benefit the company and make your boss look great. You want the focus to be about how a salary raise will enable you to help the company more and continue to deliver value to the company, not the other way around – not how the salary raise will help you.
There should be three main components to demonstrating your value to the company. Past, present and future. First, you should describe how you have already provided value to the company, using concrete examples that you created on the list that we talked about earlier. Second, talk about the present – talk about what you’re doing now to help the company. Third should be forward looking – you should describe your ideas for how you’ll continue to provide value to the company going forward.
This is going to go in your preparation phase, but before you come to the negotiating table, you want to understand what your boss’ challenges are, understand what your company’s challenges are, and come to the negotiating table equipped to demonstrate that you not only understand that those challenges exist, but that you also have plans to help your company overcome them. Again, it goes back to convincing your boss that you’re on the same side of the table and want to work as a team to propel the company forward.
You should project confidently, speak in a matter-of-fact way, throw in some comments showing your appreciation and gratitude, and again, keep the conversation focused on how a salary raise will enable you to continue to add value to the company. Remember, you’re worth it and all you’re doing is asking to be compensated according to what you’re worth.