How do I negotiate a pay rise/rate increase?

Many companies will offer annual pay reviews or freelance rate reviews (there is, however, no legal requirement to do this).  However you may feel it is justified to approach your boss to ask for a rise at any point.

It’s not a comfortable thing to do, and there is no ‘right’ way to do it.  However, whatever your situation is, you must prepare for a conversation about your pay.

Before you ask:

  • It’s important to recognise the difference between the value of the role that you perform, and your value as an individual. If you continually feel frustrated about your pay levels (despite perhaps asking for a pay rise), it could be that your employer has simply reached the limit of the value that they can place on your role, which is different to your value as an individual.
  • If you are changing jobs, the best time to negotiate your salary/ rate is after receiving a job offer, and before you accept it. Your bargaining power is strongest at this point, and is stronger still if you have (or can say that you have) at least one other job offer or option.
  • The most positive way to ask for a rise or bonus is to ask for extra work and responsibility and link this to a pay rise, if not immediately, then in the future. This is an approach that employers respond to better than simply asking for more pay for doing the same job.
  • If you ask for a raise without asking for extra responsibilities you must do some background work about the normal salary/rate ranges in your type of job and plan your negotiations prior to approaching your boss. You need to really know what you are worth and what you have achieved recently, and why you deserve the pay rise. You will need to explain what skills and benefits you have brought to the company, any expectations you have exceeded, any additional responsibilities you have taken on that stand out and you feel you deserve credit for. You need to be able to explain all of these points in detail.

Ask for a face to face meeting rather than try to present your case in a letter. Simply ask your boss for a review meeting to discuss your responsibilities and remuneration. In the meeting ask what the opportunities are and/or process by which you can improve your salary/rate. Approach it positively and constructively.

Factors which affect your employers response to salary/rate negotiation:

  • how well paid you are at the moment compared to the market norms and your peers
  • the rate of inflation
  • where you live and work and the costs of living associated with the area
  • the available budget your company has for pay/rate rises (which is often none, apart from perhaps annual  review time)
  • the company’s last company-wide salary review, and the range of % increases awarded
  • what precedents would be set for other employees/freelancers by giving you a rise (this is often a significant issue for the company)
  • how valued you are to your boss and company
  • how easy it would be for them to replace you with someone of similar capability and value at the same or less salary/rate
  • how much extra responsibility you are prepared to take on
  • how much extra effort you are prepared to put into the job and how ambitious you are
  • and, very importantly, what you will do if you don’t get a raise (i.e., how much you want to stay with your present company and how confident you are that you could find a better job elsewhere)

Ask yourself why, honestly, you want or need a salary/rate increase. Some ask because they feel under-valued. Some people are genuinely under-paid. Are you being fair and realistic? Employers generally don’t respond positively to requests for a salary/rate rise because of your personal/home circumstances alone. Stepping back and taking a truly objective view is important.

How much to ask for?

It is a good idea to ask for more than you want and that give yourself room to negotiate. Expect your boss to propose a counter offer after you have asked for your pay rise.

What if your boss says NO?

Just because you are asking for a pay/rate rise, you may not necessarily get it, as you have no legal right to request one – but do not be disappointed if they say no. Firstly, there is always next time and from the feedback you get you can work towards the next occasion. You need to understand the reasons why he/she has said no and reflect on them. It is not the end of the world and it is not forever.

It may be due to the fact that you are still in a learning curve at work and still developing new skills, in which case, once you feel fully developed, it could be time to ask again.

It is unlikely that your boss will be able to agree to your request at this meeting. The bigger the company and the further removed your boss is from the top the less likely a quick answer will be.

Do not be afraid to ask for non-financial benefits as well – you could ask for training and development and the company may be more inclined to pay for this, as you will be learning more and bringing more value to the company.

If you really feel you deserve a pay/rate rise and you are not happy working at the company, then you can always search for a new job that would be willing to pay you more. It may be that your current company is not suited to you and this is your sign to take the next step.

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