How to Negotiate a Raise and Boost Your Bank Accounts

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 and 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.

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.

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.

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, you can use an emergency fund. 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.

This article was written by Deanna Ritchie from Due and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.