Is there nothing more daunting than getting a raise? However, it is worth it if you are able to secure a significant salary increase. In the end, a raise means more money in your bank account. This can be used for paying down debt, saving for retirement, or simply enjoying a better quality of life.
The thing is, negotiating a raise doesn’t have to be so intimidating. After all, you deserve fair compensation for your work. But, it all starts with preparation. As such, with these tips, you can increase your chances of getting a raise and boost your bank account at the same time.
1. Do your research.
To start, discover what the average starting salary for similar roles is for your position. For a free salary comparison, check out Salary.com and PayScale to find out how your current salary compares to similar positions at other organizations. You can also find great information on this through LinkedIn. In addition to reviewing job postings, LinkedIn also offers average salary ranges on its site.
But, that’s just scratching the surface. Here are some other factors that determine a raise:
- The industry you work in. Growing industries often offer higher salaries not only to attract employees. But also to retain them to help them grow. The majority of companies with greater growth are able to offer their employees higher compensation due to a steady stream of income. Pay raises are less likely in industries with slow growth.
- Geographic location. Depending on the cost of living in the city, some employees in a certain area may receive a raise that’s even higher than the national average, while others in a different area may receive a raise that’s even higher.
- Current job market. Employers may offer you a raise if they recognize your unique occupation in the industry.
- The organization you work for. You are highly likely to receive a raise based on your company’s success and regulations. A raise may not be available to you if you already meet the predetermined range set by your employer for salary increases. A successful company is more likely to give you a raise.
Also, consider asking local recruiters and hiring managers to consider your resume for a realistic salary goal based on your experience and position. It is possible to use this information as leverage when you seek an increase in your compensation if yours is below par.
2. Quantify your value.
You should also know your value to the company and be able to quantify it. To do so, you must articulate the value you contribute. Here are some questions to get you started:
- How have you helped the company save money through your projects?
- Have you brought in any new clients?
- What have you done to improve the bottom line of the company?
FYI, it is best to be as specific as possible. Your boss will gain a deeper understanding of why you deserve a raise and what you’ve done for the company.
3. Decide on a reasonable target.
If you want to be successful at salary negotiations, you need to establish a reasonable target. Overly ambitious requests are unlikely to be granted. However, if you ask for too little, you’ll leave money on the table.
What is a good way to set a reasonable target? Consider your current salary as a starting point. Again, you should also research salaries for positions similar to yours in your industry. You can begin negotiating after you know what the market is like.
4. Develop a strong argument.
You need to prepare a strong argument for your raise once you’ve done your research and quantified your worth. The following should be included in this argument:
- How much you are currently earning.
- What your market value is.
- Contributions and accomplishments you have made to the company.
- Your reasons for deserving a raise.
Don’t forget to tell your boss what’s in it for him or her. Why? You may want to take a vacation or pay off your mortgage, but your boss does not care. Instead, bosses care about their own interests.
As you’ve already stated, you’ve done a lot for the company. However, you should also explain what your future plans are. Give them an overview of your goals and why they are important to the company, as well as how you plan to accomplish them.
5. Practice asking for a raise.
Using role-playing with a family member or friend can help you prepare and calm your nerves. Practice answering questions about:
- Your research on standard salary figures.
- How many hours and amount of money you’ve saved the company?
- What you’ve done to improve productivity.
When you need feedback on your tone, body language, or eye contact, a friend is the perfect person to ask. It is important for you to show your conviction when asking for a raise. Why should your boss believe you deserve it if you don’t think you deserve it?
6. Always have a backup plan.
Although you’ve taken all the right steps, your boss still refuses to give you a raise. Now what? Well, if you’re interested in a raise in the future, do not be afraid to ask.
If your manager is not ready to give you a raise, you should ask what specific actions would be required and then set a date for your review. If budgets are tight, a one-time bonus may be an option, either right away or after some time. You could also compromise and meet your boss halfway.
Also, in order to position yourself for a raise in the future, talk to your boss about your long-term goals. You can also expand your skill set and connect with others to increase your visibility. In the future, you will be able to ask for a raise during a performance review or milestone.
Additionally, you might be able to accept some alternative benefits instead of money. Among the examples that can be considered are:
- A weekly or daily option of working from home
- Schedules with different hours or more flexibility
- Increased paid time off
- Optional shares
7. Choose the right time for your meeting.
In general, you should use common sense when asking for a raise — even if there is never a perfect time. In sensitive situations such as layoffs, poor numbers in your department, or a challenging personal situation for your boss, don’t ask for a raise.
It is also important to consider how your company currently handles pay increases. It is best to approach your boss in November or December if they typically give raises at the beginning of the year. Rather than asking them to change their decision after being informed of your rate increase, you’ll give them an opportunity to consider your request and work with their bosses as a result.
What if there is no standard practice for raising salaries? Your request should be made at a time that is “good”. Examples include when your boss is happy with your work, when the quarter is going well, or when the season isn’t too stressful.
8. Follow up.
Make sure you follow up with your boss after your negotiation. By doing so, you’re demonstrating your commitment to getting a raise.
Make sure you thank your boss for their time and reiterate your request for a raise in your follow-up. Also, you might want to send a copy of your research or achievements.
9. Have the courage to walk away.
Don’t be afraid to walk away from your negotiations if you don’t like the outcome. This does not mean you have to leave your job. However, it does mean you’re willing to leave if you’re not being paid as much as you should be.
Your boss will see that you are serious about getting a raise if you are prepared to walk away. Additionally, it gives you more negotiating power.
What to do after a salary negotiation.
When negotiating salaries, the goal is to get a raise or other benefits that you’re satisfied with. This money can then be wisely used by:
- Pay off your debts. Your raise can be used to pay down high-interest debt, such as student loans or credit card debt. In the long run, you’ll save money and have more income available for other expenditures.
- Build your emergency fund. In the event of an unexpected expense, such as car repairs, medical bills, or job loss, an emergency fund can be used. Make sure your emergency fund is large enough to cover 3-6 months of living expenses.
- Contribute to your retirement savings. A 401(k) or IRA is a great way to start saving for retirement if you don’t already have one. Over time, even if all you can afford is a small contribution each month, it will add up.
- Automate your savings. You can make sure you’re saving money by automating your savings. Each month, a set amount is automatically transferred from your checking account to your savings account. There is no way you will miss it!
- Invest in yourself. By taking classes, getting certified, or networking with other professionals, you can use your raise to advance your career.
What if your raise wasn’t approved? Consider giving your employer some time and revisiting the subject later if they seemed open to it but couldn’t accommodate your request right away. It might be time to look for a new job if you feel totally ignored or not given what you deserve.
How to Negotiate a Raise
What is the best time to ask for a raise?
Asking for a raise is most effective after a successful performance review or after achieving a major goal. Also, you should be prepared to negotiate, which means knowing the average salary for your position and level of experience is a good idea.
How much should I ask for?
It is common for pay raises to be 3%. Generally, a good pay raise ranges from 4.5% to 5%, and anything above that is considered extraordinary.
Your request for a raise could range from 10% to 20% depending on the reasons you cite and how long it has been since your last raise. Your reasons should, however, be stronger the higher the percentage you request. Asking for 20% isn’t unreasonable if you have significantly changed your duties since you accepted the position.
You should, however, start with a more reasonable percentage if it’s been more than a year since your last salary increase and you’ve been performing well in your regular duties. It is still important for you to get a raise, but you should balance your request with the reality of your performance.
What are some negotiating tips?
Here are a few tips for negotiating a raise:
- Preparation is key. Learn what the average salary is for your position and experience level by doing your research.
- Have confidence in yourself. Don’t let fear stop you from negotiating a raise. Be confident in your abilities.
- Don’t be vague. Provide a clear statement of your salary goals and be ready to justify them.
- Walk away if you need to. It is okay to walk away from a negotiation if you are unhappy with the offer.
How to Boost Your Bank Accounts
What can I do to make and stick to a budget?
Boosting your bank account begins with creating a budget. It will be easier for you to identify where your money is going if you track your income and expenses. Also, by setting up a budget, you can begin to make changes to your spending habits and save more.
What is the fastest way to pay off my debt?
It is best to pay off your debts as soon as possible — especially your high-interest debt. In order to pay off debt, you can use a few different strategies, such as:
- The debt snowball method. By using this method, you pay off your debts from smallest to largest, regardless of their interest rates. When you see your debts starting to disappear, you will gain momentum and motivation.
- The debt avalanche method. Using this method, you pay off your debts based on their interest rates. You may save more money in the long run, but if you have large debts with high-interest rates, it might be harder to stay motivated.
Where can I invest my money wisely?
The best way to increase your wealth is to invest your money. To make an informed decision, you should do your research and invest in assets that are suitable for your needs.
There are, however, a few popular options, including:
- High-yield savings accounts. Compared to traditional savings accounts, these accounts offer higher interest rates.
- Certificates of deposit (CDs). With a CD, you know how much you’ll earn based on a fixed interest rate.
- Money market funds. A money market fund is a mutual fund that invests in short-term debt securities. Cash is more liquid than savings accounts, but they don’t offer the same interest rate.
- Government bonds. Because government bonds are guaranteed to be repaid by the government, they are considered safe investments.
- Corporate bonds. Compared to government bonds, corporate bonds are more risky since they are issued by corporations. They can, however, offer higher returns as well.
- Mutual funds. Investing in mutual funds allows you to take advantage of a wide range of stocks or bonds at one time. As a result, you can reduce your risk and diversify your portfolio.
- Exchange-traded funds (ETFs). A mutual fund is similar to an ETF, but it trades on the stock exchange like individual stocks. Because of this, they may have higher fees than mutual funds, but they are more liquid.
- Real estate. If you do your research and understand the risks, real estate can be a good investment.
How can I live below my means?
You can boost your bank account by living below your means. In other words, you should spend less than you earn. In order to do this, you can take a few different approaches, but being mindful of your spending habits is the most important.
Featured Image Credit: Photo by Sora Shimazaki; Pexels; Thank you!
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