Talking about finances can be an uncomfortable conversation, particularly when it’s with an employer.
However, with the average Brit feeling their work deserves a 37% pay rise, sometimes a conversation regarding pay is necessary to ensure your hard work is fairly rewarded.
Here are some great tips, courtesy of expert accountancy firm Howlader & Co, on how to effectively negotiate a pay rise:
Initiate a conversation, but pick the right moment
Finding the right time to speak to your employer is crucial – though the manner in which you approach them is equally important.
Generally, requesting an initial meeting with your manager will look more professional than springing the topic on them in passing conversation.
An annual performance review can also be the perfect opportunity to bring up any pay discussions. If this isn’t a topic of conversation, take initiative and ask your manager when the right time to discuss your progress would be.
If you know the company is going through a difficult patch, or if it is still a relatively new business, it may pay more in the long run to hang fire before you ask for a pay rise.
Proving your worth during turbulent times will put you in a better position for a raise when the company is actually able to offer you one.
Whenever it is you decide to reach out to your employer, ensure you have had enough time beforehand to fully prepare your case for a pay increase.
Do your research and know your worth
Try and gain some insight into your market value by finding out what others in similar roles to you are being paid.
Speaking to colleagues, people in the same industry or external recruiters may help you get a better idea of what you should be asking for.
Ultimately, the more knowledgeable you are of your situation and the better your capability of demonstrating this knowledge to your employer, the more likely they are to seriously consider your request.
Prepare your business case
You need to be able to demonstrate a business case to your employer before they can consider granting you a pay rise.
In order for you to negotiate, be prepared to show how you have gone above and beyond your job requirements and provide examples of where you’ve excelled. If you can provide concrete, statistical examples even better!
Before your meeting, write a list of everything you’ve achieved since your last pay review. Being able to demonstrate how you have helped your business grow, improved its efficiency or reduced costs will provide you with a solid basis when negotiating a higher salary.
It’s also worth checking your employment contract to see if you’re entitled to an annual or bi-annual pay review or increase. If you haven’t yet had one, be sure to mention this during your meeting.
Choose a reasonable, justifiable salary
Once you feel confident on the reasons why you merit a pay rise, you should ensure you have a clear idea of how much you think you deserve.
Make sure to research industry averages thoroughly online, before determining a reasonable ‘best case scenario’ wage and a second more reasonable wage, should your employer want to negotiate.
Any salary you suggest must be justifiable so be prepared to discuss your suggestions with your manager and demonstrate clearly where your figure has come from.
If you’ve been headhunted or have recently applied for a job elsewhere and have been offered a higher salary, you may also consider using this as a negotiation tool with your current employer.
Be prepared to be knocked back
While employers should take your request for a pay review seriously, negotiating may take some time before you can both agree on a figure.
If a counter offer is made, always thank your employer before asking to take some time to think about their offer before you accept.
In a stressful situation it can be easy to make hasty yet ultimately undesirable decisions. By removing yourself from the situation it gives both the employee and employer time to seriously consider the situation and in turn lead to later resolutions both parties are happy with.
If you find there is little room for manoeuvre, respectfully flag up any discrepancies between your salary and that of someone on the same level as you, either within the same company or elsewhere in the industry.
Think about your options
Once you’ve asked the question, the worst your employer can say is no.
Should this occur, you will want to consider your options moving forward.
If you are happy in your company and will remain satisfied for the time being on your current salary, propose the notion to revisit the pay review in six months.
Highlighting alternative perks or methods you can be rewarded for your work may also provide a mutually beneficial compromise.
It’s also worth noting that sometimes company policy won’t allow for an increase even if your employer acknowledges you deserve one. In these cases, it’s worth asking if there are any other perks or benefits they could offer you instead, such as a bonus, company shares or commission.
If nothing changes and you continue to feel disheartened or undervalued, it may be time to consider your employment options elsewhere.
Should this occur, always be sure to assess your finances and speak to your accountant before you take the plunge.