The current world-wide recession means that most company's finances are under extreme pressure. Businesses are finding that they are under pressure to cut costs but at the same time they must increase productivity, efficiency and sales. As a result, over the past five years, we have seen more and more companies bring in across the board pay freezes. However, even in this environment of pay austerity, many employees are managing to secure healthy pay rises. So, how exactly are they doing this? We present several tips to help you negotiate and secure a well deserved pay rise.
Know your worth
Before entering any salary negotiation with your employer, you should ensure that you are fully informed of the market value of the job you do. You can establish the market value of your role, by performing market research. Most of the main jobs boards on the web offer salary assessing applications which enable you to see the average salary for your particular job. This will give you a good idea of the average salary for your role. If you find that you are being paid below market rate, you will be able to make a case to your manager that you are under-paid and are deserving of a pay rise.
Know what your competitors pay
While knowing the average salary for your role is a useful in salary negotiations, you can build a stronger case if you know what your company's competitors pay its employee's performing your role. Your employer will be very concerned at the prospect of losing their most talented staff to the competition who pay higher wages. Therefore, if you demonstrate to your employer that their competitors pay more for the same jobs, you will have a very persuasive argument for being awarded a pay rise to bring your salary up to that of the competition.
You can research this information by looking at jobs boards or looking at the vacancies pages on your competitor company's website.
Build a Business Case before Speaking to Your Employer
If you find that you are being paid less than the market average for your role and/or less than the competition pays its staff, you have a strong case that you are under-paid. This is the first half of your business case.
The second half of your case involves demonstrating to your boss, the exact value that you bring to the business and the role. If you are one of the leading sales people, one of the most productive staff, or one of the best customer service agents, then you should explain this to your employer as part of your business case. You should illustrate your value to the business and ensure that your boss knows what the business would be losing if you were to move to the competition.
Try and think what kind of objections that your employer may make to your business case and prepare a response. For example, the employer may argue that there is not enough budget to give a pay rise. If this is the case, you could consider agreeing to increase your sales targets or productivity targets goals in return for a salary rise.
One on One meeting
The way in which you approach you manager about a pay rise is important. You should arrange a one-on-one meeting with your manager. It is best not to tell to your boss in advance that you are asking for a pay rise as this will give them an advantage and give them time to prepare objections to your request. Just write to them with a short and polite message, requesting a meeting to discuss certain aspects of your role. An example letter is shown below.
I would like to have a meeting with you to discuss my responsibilities, role and salary.
I am committed to my role and really enjoy working for the company.
I would like to talk about how I can increase the value I bring to the business as well as the reward I receive for my contribution.
I would appreciate a few moments of your time to discuss this further.
The best way to negotiate a pay rise is to build a strong business case for a pay rise, using objective market data, which shows you are under-paid. Arrange a meeting with your boss or the appropriate decision maker and then present your case. Ensure to anticipate any objections in advance so you can offer immediate counter-arguments.