Talking about, and negotiating, a pay rise in a professional work environment can often be a dreary, daunting task for many.
We’ve all been through this before – you’ve been busy at work all year, feeling like you’ve achieved many milestones at work, checking things off your never-ending list. Another year has gone by, and before you know it, performance review time comes around again. Your guts tells you a pay rise could – and should – be in the horizon; but how do you make it happen?
According to a recent study quoted by Business Insider Australia, a whopping 49% of workers surveyed do not negotiate the value of their first job offers; at times this is due to lack of market awareness and negotiating experience, which may subsequently develop into more uncertainty when initiating a salary discussion further down the track.
Discussions about money matters don’t have to be scary. Here are some quick tips you could consider to help you make your first steps towards a successful salary negotiation.
Before we can question whether a wage increase is likely, firstly we need to ask ourselves – “does my role even warrant a pay rise at this stage?”
Contrary to popular belief, a yearly increase in remuneration is not always granted based on an employee’s length of service. Make sure our initial expectations don’t revolve around employment longevity; instead, research the current market value of our role is by looking up similar available roles in the industry, on an equivalent skill level, with a comparable set of tasks and duties.
Plus, it is important to understand the contribution our role brings to the development and growth of the company. Think of our job as a product or service, our employer as the client, and our wage as the price they pay in return for our service; how much value should we generate for our client to ensure they’ll get their money’s worth, and therefore be willing to spend more to on our improvement?
By putting in ourselves in our employer’s shoes and understanding the true value of our skillset, we will be able to quantify and suggest the appropriate level of increase we deserve, which in turn will increase our chances of achieving our intended pay rise.
- Know when, and why, to ask
When asking for a salary increase, be wary of the many deadlines, urgencies, timeframes, and other influencing factors that might also be at play around you. Never assume that a pre-set timeframe, such as the end of a financial year or a company-wide performance review period, will be the perfect time to ask for a raise.
For instance, if the company is going through a drastic change such as a merger, acquisition, redundancy, or the like, it might not be feasible to even talk to management about wage discussions due to a shift in focus.
Conversely, if the firm’s bottom line is looking bleak, sales figures are dismal, or revenue is on a downward trend, asking for a pay rise immediately might even be frowned upon due to perceived insensitivity, inappropriate timing, or lack of awareness.
When contemplating or asking for a discussion around remuneration, we need to be fully conscious of the company’s direction and be informed of its priorities. When things aren’t looking great in the big scheme of things or the higher-ups are otherwise occupied with other urgent matters beyond our scope, sometimes the wiser thing to do is sit tight, exercise patience, and wait our turn.
- Focus on future performance and returns, not past achievements
It has been long-believed a successful performance review – which may lead to a wage increase – should rest on a full, thorough recount of gleaming past achievements, fulfilment of KPIs, and other priorities during a certain qualifying period. While this may be true for a handful of highly-structured, technical, or skilled roles attached to industry-set quantifiable variables, it might not ring true for the rest of us.
Indeed, it may be smarter to celebrate our wins and then look ahead to the future, in order to determine what else we could to bring to the table – in turn allowing more space for our scope to continue expanding. By doing so, we could then propose that with more responsibilities and higher level goals, it will only be fair that our salary level also gets reviewed for the year ahead.
Instead of stopping at “I’ve done well in the past year and here are my achievements”, go one step ahead, and think, “Now that I’ve done well, what else is there for me to achieve, and how will I need to be rewarded in order to go there?”
By setting up a new-and-improved set of goals, or “deliverables”, for ourselves to achieve in the coming period, we will be able to subsequently challenge ourselves and strive to justify the salary hike, providing us with motivation to deliver an even more stellar level of performance in our role at work.
Now go out there, take your next step, and walk into that discussion with confidence. Best of luck!