How To Negotiate Your Way To A Pay Rise: Part 2

This is the second of a three part blog series on negotiating a pay rise, written in conjunction with a talk given to the General Assembly by TalentRocket’s founder Chris Platts, entitled “Negotiate Your Way to a Better Salary”.  Read part one here. Please enjoy responsibly.

Forming Your Argument

Now it’s time to form your argument. When it comes to negotiating a successful pay rise, remember that all negotiation is emotional, not rational. So appealing to their emotionally sensitive ‘right brain’ whilst throwing in a few data points that makes their sensible ‘left brain’ rationalise is the best strategy.

In order to appeal to human emotion you need to craft your salary justification story. Basically, you need to make the other person think that you are massively underpaid and that your UIV (unique, indispensable value) is so important they can’t offer you a pay rise fast enough. Sounds easy, right? Ok, let’s break it down.

  • Start by gathering a support network. Make a list of all of the benefits your clients, colleagues, company derive from your work. Gather testimonials if you think it’s required, basically you want to be able to reference what other people think about your performance as well as giving your own synopsis.
  • Identify if your role has changed since your last pay review. Are your responsibilities increasing, do you predict them to an are you expecting a promotion? All these are reasons for justifying an increase in pay.
  • Identify which of your unique skills aren’t being fully utilised in your role. Can you work at a higher capacity? Suggest ways that you can add more value to the company over the next 12 months.
  • Position yourself accordingly as to who you’re negotiating with. Will you be in a review with your immediate line manager or will it be with HR? If offered a choice I’d suggest that your immediate boss if going to have a better knowledge of your UIV.
  • Finally, note down what you’ve accomplished since your last pay review and what the repeating themes are. Are you consistently solving complex problems, building great teams or exceeding sales targets? If so, identifying these accomplishments as trends indicate that they weren’t just lucky, but something in your UIV that will continue to pay dividends for the company for years to come.

Crafting Your Story

Telling a story is the most effective way to communicate your UIV to your employer and there are a few basic storytelling tips that any 6 year old Jack and the Beanstalk fan knows to be true.

  1. Have a super cool hero of the story – in case you were wondering, that’s you
  2. Have a big scary enemy – this was the seemingly impossible task (or tasks) you faced over the past 12 months
  3. Have a really gruesome battle or struggle – these are the challenges you had to deal with in order to defeat the big scary enemy, which despite all odds you managed to do of course
  4. The wiser hero – this is you today after explaining what you learned and why it’s made even more awesome than before

Follow those simple steps and make your story so memorable that people don’t forget just how great you are.

Take A Walk In Their Shoes

It’s a common adage that you can’t influence people unless you already know what influences them, so it’s time to brush up on the other side of the negotiation table. Prior to your salary conversation it’s worth asking yourself the following questions:

  • Does your negotiation impact anyone else internally?

By asking for a raise do you create a problem or future problem for the business or hiring manager? If so, how can this be resolved. e.g. Is there a salary structure? Do you go above a salary band?

  • How is the business performing overall?

Is the company in a financially stable position to offer you an increase or are times a little dicey? Knowing this ahead of the negotiation is important so you can soften or harden your position accordingly.

  • What are the company’s short & long term aims?

And where specifically does your role, team, office fit into all of this? Are you central to the company’s plans this year? If so then you’ll have more leverage than if you’re on the periphery.

  • Who makes the final decision on your pay rise?

Is this your immediate boss, HR, the finance team or even the CEO? Are you dealing with the decision maker, if not then you need to change strategy a little as your job is then to convince them to go and convince others.

Why are we asking all these questions? Well, it’s to anticipate objections that your boss or HR might have ahead of them arising so you’re better placed to deal with them.

Top tip: Practice by writing out 10 possible objections to the questions above and underneath each one write out your counter argument.

What Pay Rise to Ask For?

It’s my general rule of thumb to ask for the salary you want based on the value you create rather than what you need to live on (or think is fair). Your value is not determined by the size of the bills you have to pay, it’s the value of your services in the hands of your employer. This is the mindset of a successful salary negotiator.

Percentage increases change based on your industry sector and country, but as a rule of thumb you want to ideally suggest a raise of anywhere up to 20%. Typical, un-negotiated raises are around the 3-5% mark, but we’re not interested in those, we’re after a noticeable raise. We’ll get onto this with some examples in a minute.

Negotiation Points

It’s not just a pay rise that you’re after, it’s a better package overall. And depending on the type of benefits you have access too, here is a list of the typical things that are all up for negotiation when it comes to your pay review.

-Guaranteed bonuses – ‘golden handshakes’ for taking a new job and losing bonus or as a way to avoid salary caps can be a way round tricky policies

-A built-in salary review or commitment of future pay rises – this is a really good one if your company push back and say they can’t offer any pay increases

-Extra holidays

-More work flexibility

-Remote or home working

-Operating costs – such as mobile phone bills, wifi subscriptions etc

-Travel costs – can they pay for your commuting costs if they can’t increase your salary?

-Shares/equity options

-Training and Development

Once you’ve created your list of what you’d like to ask for then it’s time to prioritise your objectives and monetise their worth.

For example, on a current salary of £30,000 1 extra week’s holiday is worth £625. But if your target salary is £36,000 (20% increase) then this now equates to £750.

Putting a tangible financial figure on each negotiation point is helpful when deciding your target package, but it is subjective. For example working from home 1 or 2 days a week could be worth £1,000 in saved travel costs but wearing your jim-jams till noon could be invaluable to you, in which case you may want to prioritise this request and concede on other points.

Co-operative Not Competitive

There are a million techniques to successful negotiation and I don’t want to get into them all here. So in short, my best tip is this: be reasonable. As mentioned before, your goal is to make your boss feel like they got a good deal not the other way around so wherever possible listen, understand and empathise with their position.

Setting Expectations

Before the meeting, it’s important that you set expectations. Send your boss an email explaining that you’re looking forward to your performance review (or meeting if it’s just a get together) and wanted to confirm that your salary will be discussed in the meeting.

Other important points

  • Ensure that the room is distraction free; there’s nothing worse than feeling conscious of being heard through a glass meeting room wall
  • Gauge the format. It’s probably not worthwhile doing a 20-slide powerpoint on how awesome you are if they’re not expecting it, it will just make you look silly
  • Demonstrate keenness to learn from review process not just in getting a pay rise
  • Never, ever, ever lie. If you’re in a position where this is an external job interview then don’t lie about your current salary. If your current salary is much lower than the role you’re going for then try and steer the conversation to what your target salary is and why you think you deserve it. Do bear in mind that any offer made will be subject to references so you’ll get caught out pretty quickly if you bend the truth.

Setting An Anchor Salary

So this one is a little controversial. There’s lots of studies that aim to prove and disprove this theory, and studies are great and all, but I’m just going to tell you what’s worked best in my experience and that’s you should always state a specific target salary. It’s not the real target salary (it’s a little bit over) but it’s near enough so that if you have to concede a little the company feel like they got a good deal too.

So for example say you are on a current basic of £30,000 and your real target salary is £34,000 (a 13% pay rise) then I’d advise setting an anchor salary of £36,000 (20%).

Giving the company a specific figure removes ambiguity. The alternative is to set a range but in my experience when a range is given then both sides hear a different figure. e.g. the company here the lowest figure and you expect the highest. This leads to resentment and in your case significantly weakens your position.

Research shows that the first number given will serve as a reference point for the entire negotiation. So you want to get in there with your demands before they give their figure.

On The Spot Tips

Negotiating salary can seem weird, and at times just plain uncomfortable, so here are a few handy tips to get through it without wilting like an over-watered posie.

  •      Make some small talk. As well as settling your nerves this will activate that nice, emotional right hand side of their brain. Connecting in a light-hearted way will help your story stick more when you tell it.
  •      Silence is your friend. So take the time to think before responding to questions and remember that it’s perfectly acceptable to ask for a few hours, days or weeks before giving a response. Don’t feel the need to fill any awkward silences with a response. Asking for a pay rise can be a hard pill for people to swallow, keep in mind that you’re worth the ask so let them chew on it for a while and don’t concede at the first sign of resistance.
  •      Get past an awkward “no” by asking questions. So what if you’ve done all your homework, crafted an A grade story and you still get hit by a big fat “No”? Well, firstly don’t panic, nobody said it was easy. So take a breath, ask some questions and get curious.

 

That’s it from part 2 folks. What did you think? Agree with every word? Think it’s all a load of tripe? Leave a comment below and  let us know.

Don’t forget to check out parts One and Three