I’ve had a stack of people reach out to me and ask how to negotiate a raise or a new salary. The raise/salary negotiation is likely the most foreboding negotiation most people ever have to go through. And it’s something that almost everyone will have to face.
So in this episode of Negotiations Ninja, I’ll be laying out, step-by-step, exactly how to negotiate a raise or new salary. It’s not complicated, but it does require research, effort, and follow through (this last bit is key).
What words do you use? How do you frame your needs? What do you ask for? How do you bounce back if they say no? Listen to learn more.
Outline of This Episode
- [2:47] Step #1: Make the request
- [4:00] Step #2: Do your research
- [5:45] Step #3: Determine what you want
- [7:45] Step #4: Ask for more than you expect to get
- [10:45] Step #5: Have a BATNA
- [11:55] Step #6: Use the right words
- [13:15] Step #7: Position your request as a past/future request
- [14:40] Step #8: Roleplay the negotiation
- [15:43] Step #9: Bounce back from no
Step #1: Make the request
Most people psych themselves out of simply making the request. They don’t follow through because they let their limiting beliefs overwhelm them. You have to face your fear to ask for a raise or higher salary. When you make your request, you’re raising the perceived value in the eyes of the person deciding to give you the raise/salary—even if you don’t get the raise.
Step #2: Do your research
Most people go into these negotiations blind and wing it. That’s a terrible idea. Who wouldn’t want to make $1 million a year? But does your research show that $1 million is the right number? You have to do some legwork to determine what your market value is (and your value to the company).
Study the salary trends for your profession in your geographic area with similar job titles, qualifications, and responsibilities, and make sure you really understand how much you’re worth. If the unemployment rate is low, your value increases in that market because it will be difficult to find someone to replace you.
Research your own performance and ratings. Does your performance warrant a raise? If you’re a mid to low-level performer, don’t ask for a raise. Instead, ask how you can improve and take on more responsibility to earn a raise.
Step #3: Determine what you want
So you want a raise. But how much money do you want? Have an exact number in mind. Secondly, think about what else you’d accept if money isn’t an option. Why not negotiate happiness into your job?
- Will you be happy if you can get more time off?
- What about more flexible medical benefits?
- What about flex days versus sick days so you can legitimately play hooky?
- Would you like a longer maternity leave or parental leave?
There are so many things you can negotiate that would increase your happiness. It’s important to determine what else you could want if they say no to a raise.
Step #4: Ask for more than you expect to get
This is the golden rule of negotiation. Ask for more than you think you’re worth. When you negotiate for a higher salary, you raise your perceived value in the eyes of the person looking to hire you. You’re also getting more money over your entire lifetime. A recent negotiation study I read showed that those who choose to negotiate salary rather than avoid it, increased their starting pay by an average of $5,000. Are you going to say no to an extra $5,000?
A 25-year-old employee who starts their career at $55,000 will make $634,000 more over an entire 40-year career (assuming an annual 5% increase) than an employee who starts at $50,000. Asking for more money is critical because it could be the difference between financial freedom.
Step #5: Have a BATNA
What is your best alternative to a negotiated agreement (BATNA)? What happens if you get a hard no? Do you have a backup plan? You need an alternative. In this case, it might be leaving for another job. Do you have the ability to walk away if you don’t get what you need from the negotiation? If you don’t have an alternative, should you follow through with the negotiation? This gives you the ability to walk away.
Step #6: Use the right words
You can’t approach a salary/raise negotiation meekly. Be confident. If you’re not confident, fake it. Your words and body language are powerful. What you say and how you say it makes a huge impact on whether or not you’re successful. Stay away from phrases like:
- “I would like”
- “It sure would be nice if…”
- “Would it be possible if you could, maybe, please..”
Replace these phrases with “I need” and “I deserve.” Be confident in asking for what you want.
Step #7: Position your request as a past/future request
Think about it from the company’s perspective. The only reason they should pay you more is to reduce the risk of you potentially leaving AND so you’ll deliver more future value to the organization. It’s an investment decision. You have to share the value that you’ve already delivered and then convey to them the value that you will deliver in the future. They will pay you more if there’s an opportunity to get more value from you. Position the request as an investment decision, not an expense for work you’ve already completed.
Step #8: Roleplay the negotiation
This is crucial. Roleplay the negotiation with a loved one or friend, at least a few times. It will help you work the butterflies out. Roleplaying will also help you identify the weak points to adjust those areas before you go into the negotiation. It is an essential aspect of negotiation that most people skip. Winging it is not a recipe for repeatable success. Practice truly makes perfect.
Step #9: Bounce back from no
What do you do if they say no? It deflates confidence and can send you into a tailspin. You may not feel valued. You may worry that you’re on the chopping block. Let me assure you that those things are likely all in your head. Stop thinking about the “what ifs.” No doesn’t mean no, it means “not right now.” You can ask again a few months down the road. It can take a few requests to get to yes. When you get a no, ask how you can get to yes.
Connect With Mark
- Follow Negotiations Ninja on Twitter: @NegotiationPod
- Connect with Mark on LinkedIn
- Follow Negotiations Ninja on LinkedIn
- Connect on Instagram: @NegotiationPod