Can I negotiate this salary?
January 5, 2010 9:29 PM Subscribe
How do I ask for a substantial raise in these circumstances?
It's review time at my company. In the past this has consisted of a brief discussion of the previous year, and either a predetermined raise, or no raise at all.
I feel that my company has had me cheap since I was hired four years ago. I was inexperienced, and took a position below my skill level for the opportunity. Now, I feel like I've proven myself. I've gotten promotions and raises, but I would like more.
I don't know how raises are determined. They come to me on a sheet of paper needing a signature. There's no discussion.
The review process is an email questionnaire about my growth during the past year, followed by a short discussion. I'm looking for negotiating tips. Do I mention pay in the email? Do I wait until I see their offer, and then try to discuss it? The company is small, with very hands-on owners. I feel these decisions are made long before I hear about them, and I fear that trying to argue or negotiate will put me at risk. But I'm also afraid that I'm being a pushover.
I feel that my company has had me cheap since I was hired four years ago. I was inexperienced, and took a position below my skill level for the opportunity. Now, I feel like I've proven myself. I've gotten promotions and raises, but I would like more.
I don't know how raises are determined. They come to me on a sheet of paper needing a signature. There's no discussion.
The review process is an email questionnaire about my growth during the past year, followed by a short discussion. I'm looking for negotiating tips. Do I mention pay in the email? Do I wait until I see their offer, and then try to discuss it? The company is small, with very hands-on owners. I feel these decisions are made long before I hear about them, and I fear that trying to argue or negotiate will put me at risk. But I'm also afraid that I'm being a pushover.
The easiest way to validate and strengthen your position is to land another job that pays what you think you should be paid. You can then go to your current employer and see if they are willing to match.
Otherwise, you're going to look like a bit of a dork. It sounds like raises are calculated according to cost of living or inflation. Your supervisor or manager operates on a budget, and what you are proposing will blow that budget.
Generally, if you don't create the secret sauce (ie, you have technical ability that is not easily replaced, that is also *integral* to the product the company actual sells), or if you're not selling the secret sauce (you produce revenue) you will be in a weak position.
So it may be time to get another job.
posted by KokuRyu at 11:36 PM on January 5, 2010 [1 favorite]
Otherwise, you're going to look like a bit of a dork. It sounds like raises are calculated according to cost of living or inflation. Your supervisor or manager operates on a budget, and what you are proposing will blow that budget.
Generally, if you don't create the secret sauce (ie, you have technical ability that is not easily replaced, that is also *integral* to the product the company actual sells), or if you're not selling the secret sauce (you produce revenue) you will be in a weak position.
So it may be time to get another job.
posted by KokuRyu at 11:36 PM on January 5, 2010 [1 favorite]
Best answer: The best time to ask for a raise is not when they are considering what you have done, but rather when they are considering what they need you to do.
posted by StickyCarpet at 2:08 AM on January 6, 2010
posted by StickyCarpet at 2:08 AM on January 6, 2010
1) Don't get emotional; don't plead; don't whine. Whatever decision gets made should be a business decision. Accordingly, treat it like any other investment you're asking the business to make.
2) On that basis, prepare as if you want your company to invest. What are the historical results, the opportunity cost, the ROI etc. Advocate. Use your communication and presentational skills to make the case. Impress the decisionmaker.
3) Try and get someone to advocate on your behalf: it makes it a lot easier when your boss is trading favors and doing the negotiating, provided you trust him/her to do so, than doing it yourself. The sell to your boss should be simple: I'm considering my options, I make you look good, I make your life easier: you don't want me to leave.
4) Prepare to walk. If you want to take the line that you have a general market value of $x then unless they know you're prepared to go out to the market then it's hypothetical.
I don't mean make very overt threats of leaving, but from an employer's perspective if an employee will remain in place and motivated at salary $y, then there is little incentive (especially in these times) to pay more.
As a flight risk, you not only get assessed on the cost of you leaving, but also on the cost of hiring your replacement. This focuses the decision on what it should be: an above board, rational, commercial decision.
5) Have a number in mind. You're going to get lowballed first up, so have an ideal number and a minimum number. Ideally, get them to put their numbers first. If not, quote the ideal number and prepare to accept the minimum number. Go high, but not ridiculously high. Your superiors will be well versed in negotiation, most likely, so everyone knows this little dance. Don't look overjoyed with your raise if you get it, even if you are inside.
6) Think about other benefits you might want, or the system. If the salary line in the P&L has been set, there may be limited latitude to adjust it. Could you earn commission from somewhere? Is there another budget you could get a payment out of? Is there another financial benefit like [better] health insurance or gym membership that you'd be prepared to take. Is there a non-financial benefit you want. Your bosses are likely to be thinking of things like this so you should too.
posted by MuffinMan at 5:25 AM on January 6, 2010 [2 favorites]
2) On that basis, prepare as if you want your company to invest. What are the historical results, the opportunity cost, the ROI etc. Advocate. Use your communication and presentational skills to make the case. Impress the decisionmaker.
3) Try and get someone to advocate on your behalf: it makes it a lot easier when your boss is trading favors and doing the negotiating, provided you trust him/her to do so, than doing it yourself. The sell to your boss should be simple: I'm considering my options, I make you look good, I make your life easier: you don't want me to leave.
4) Prepare to walk. If you want to take the line that you have a general market value of $x then unless they know you're prepared to go out to the market then it's hypothetical.
I don't mean make very overt threats of leaving, but from an employer's perspective if an employee will remain in place and motivated at salary $y, then there is little incentive (especially in these times) to pay more.
As a flight risk, you not only get assessed on the cost of you leaving, but also on the cost of hiring your replacement. This focuses the decision on what it should be: an above board, rational, commercial decision.
5) Have a number in mind. You're going to get lowballed first up, so have an ideal number and a minimum number. Ideally, get them to put their numbers first. If not, quote the ideal number and prepare to accept the minimum number. Go high, but not ridiculously high. Your superiors will be well versed in negotiation, most likely, so everyone knows this little dance. Don't look overjoyed with your raise if you get it, even if you are inside.
6) Think about other benefits you might want, or the system. If the salary line in the P&L has been set, there may be limited latitude to adjust it. Could you earn commission from somewhere? Is there another budget you could get a payment out of? Is there another financial benefit like [better] health insurance or gym membership that you'd be prepared to take. Is there a non-financial benefit you want. Your bosses are likely to be thinking of things like this so you should too.
posted by MuffinMan at 5:25 AM on January 6, 2010 [2 favorites]
This sort of question always boils down to the fact that nobody pays anybody more than they think they must to get what they want. The only message worth sending is that they stand to lose you if they don't pay you better, and that replacing you will be even more costly than simply paying you more now.
You can be clear and direct, i.e. 'I got a better job offer from another company and if you don't beat it I'm leaving.'
You can also be subtle and indirect, i.e. 'I'm currently paid 76% of the national average for people whose jobs match mine," a sort of assertion that demonstrates that you can leave, and that you know you can leave, and do better elsewhere.
Whatever you do, lose the idea that this has anything to do with fairness or rewards for good behavior. Money is not an adult equivalent to the little foil stars your first grade teacher stuck on your homework. Negotiating is a matter of being very aware of the value of what you're offering, and making sure you don't undersell your wares. It's not necessarily easy to know just what you're worth, but the more you know about that number, the easier it will be to see where you should stand your ground.
posted by jon1270 at 6:28 AM on January 6, 2010
You can be clear and direct, i.e. 'I got a better job offer from another company and if you don't beat it I'm leaving.'
You can also be subtle and indirect, i.e. 'I'm currently paid 76% of the national average for people whose jobs match mine," a sort of assertion that demonstrates that you can leave, and that you know you can leave, and do better elsewhere.
Whatever you do, lose the idea that this has anything to do with fairness or rewards for good behavior. Money is not an adult equivalent to the little foil stars your first grade teacher stuck on your homework. Negotiating is a matter of being very aware of the value of what you're offering, and making sure you don't undersell your wares. It's not necessarily easy to know just what you're worth, but the more you know about that number, the easier it will be to see where you should stand your ground.
posted by jon1270 at 6:28 AM on January 6, 2010
Best answer: Unfortunately, I don't think it'll work out well in the end if you get another job offer and use it as a weapon to get a raise. If your employer decides to match the other company's offer, then there will be tension for the rest of your time there. They may hesitate to keep giving you important / long-term assignments, seeing you as a flight risk. The fact that you are asking for a raise and indicating your concerns should be enough to raise the question in your bosses' minds that you might leave - no need to make it an explicit threat.
That said, there's no harm in discreetly feeling out the market. A lot of people get their biggest pay raises when switching companies. If you get a good offer somewhere else, maybe you should take it!
And of course, you should do what everyone says and do the research ask for a bigger raise. 50% of the work is just in the asking!
posted by monstrouspudding at 6:48 AM on January 6, 2010
That said, there's no harm in discreetly feeling out the market. A lot of people get their biggest pay raises when switching companies. If you get a good offer somewhere else, maybe you should take it!
And of course, you should do what everyone says and do the research ask for a bigger raise. 50% of the work is just in the asking!
posted by monstrouspudding at 6:48 AM on January 6, 2010
Best answer: The easiest way to validate and strengthen your position is to land another job that pays what you think you should be paid. You can then go to your current employer and see if they are willing to match.
You can be clear and direct, i.e. 'I got a better job offer from another company and if you don't beat it I'm leaving.'
Yeeahh, I'm going to have to go ahead and sort of... disagree with you there?
Especially in this market, this is the worst way to approach this unless you are 110% sure that you are absolutely irreplaceable. If I'm paying you X, and I could have 100 resumes in a week from qualified people who are willing to work for X-10%, the only incentive for me to not say "congratulations on landing your new job, good luck! When should we schedule your exit interview?" is the business knowledge you might have. Without knowing the exact job / industry this is tough to tell how much this matters, but in most cases, currently the bottom line is more important.
It sounds like they do recognize you - the fact that you've had raises and promotions - both plural - in just 4 years is commendable, and it may be this is the limit of the company's ability to reward you. Have there been any layoffs / cuts? What has the business trend been lately?
If you truly feel you deserve more, then by all means bring it up, but do it without threats or "or else" conditions. Most merit increases nowadays are computed by some magic formula based on a review rating system and possibly some minor manual adjustment by management. If I'm understanding that this signature that is required is your own, before you sign it, talk to your boss:
"Hey boss. Thanks for another good year and the opportunities I've had. I don't know what goes into it, but I'd like to discuss my merit increase quick before I sign... I was wondering, are your hands tied by HR, or might there be some wiggle room in there? I think over the last year I've made great strides in X and helped out with Y, so would it be possible to look at how we might be able to increase this, either now, or maybe in the near future if I can meet some firm goals?"
Having average salaries for your position may be valuable for your own knowledge, but I wouldn't use it as part of your argument. Your HR may only be concerned with internal equity, making sure salaries aren't too divergent within the organization, not caring too much what the national or regional average is. And for heaven's sake don't go quoting national averages. Local and regional averages can be wildly different than the national based on the cost of living in your area... national averages mean nothing in this context.
My first step might be to ask someone in HR if they know / are willing to tell you what your Compa-Ratio is. This would give you an idea of where you stand in general relation to others at your same grade level at that company. But this is mostly an HR figure, your boss may or may not know what you're talking about.
Here is a link that explains it as well as provides some additional tips. Good luck.
posted by SquidLips at 6:56 AM on January 6, 2010
You can be clear and direct, i.e. 'I got a better job offer from another company and if you don't beat it I'm leaving.'
Yeeahh, I'm going to have to go ahead and sort of... disagree with you there?
Especially in this market, this is the worst way to approach this unless you are 110% sure that you are absolutely irreplaceable. If I'm paying you X, and I could have 100 resumes in a week from qualified people who are willing to work for X-10%, the only incentive for me to not say "congratulations on landing your new job, good luck! When should we schedule your exit interview?" is the business knowledge you might have. Without knowing the exact job / industry this is tough to tell how much this matters, but in most cases, currently the bottom line is more important.
It sounds like they do recognize you - the fact that you've had raises and promotions - both plural - in just 4 years is commendable, and it may be this is the limit of the company's ability to reward you. Have there been any layoffs / cuts? What has the business trend been lately?
If you truly feel you deserve more, then by all means bring it up, but do it without threats or "or else" conditions. Most merit increases nowadays are computed by some magic formula based on a review rating system and possibly some minor manual adjustment by management. If I'm understanding that this signature that is required is your own, before you sign it, talk to your boss:
"Hey boss. Thanks for another good year and the opportunities I've had. I don't know what goes into it, but I'd like to discuss my merit increase quick before I sign... I was wondering, are your hands tied by HR, or might there be some wiggle room in there? I think over the last year I've made great strides in X and helped out with Y, so would it be possible to look at how we might be able to increase this, either now, or maybe in the near future if I can meet some firm goals?"
Having average salaries for your position may be valuable for your own knowledge, but I wouldn't use it as part of your argument. Your HR may only be concerned with internal equity, making sure salaries aren't too divergent within the organization, not caring too much what the national or regional average is. And for heaven's sake don't go quoting national averages. Local and regional averages can be wildly different than the national based on the cost of living in your area... national averages mean nothing in this context.
My first step might be to ask someone in HR if they know / are willing to tell you what your Compa-Ratio is. This would give you an idea of where you stand in general relation to others at your same grade level at that company. But this is mostly an HR figure, your boss may or may not know what you're talking about.
Here is a link that explains it as well as provides some additional tips. Good luck.
posted by SquidLips at 6:56 AM on January 6, 2010
You can then go to your current employer and see if they are willing to match.
This is a recipe for disaster, and I've commented in similar threads about the reasons why. My recommendation would be to only do that if you truly feel that you are irreplaceable AND you have enough in disposable savings to live on for a year or so, while you're looking for another job. Your risk tolerance may be lower than mine, though - so YMMV.
posted by deadmessenger at 7:05 AM on January 6, 2010
This is a recipe for disaster, and I've commented in similar threads about the reasons why.
It's a recipe for disaster only if you're wrong about what you're worth, over the long haul, to the company. To the extent that you're pretty much being paid what you're worth but your sudden leaving would be damaging, then yes, leveraging the threat of some short-term trauma to get a raise would surely set you up to be fired before long. But if one is truly providing their services at below market rate, so that hiring someone else to do the same work for less money would be difficult or impossible, then a subsequent firing would be equivalent to the company cutting off its nose to spite its face.
The current economy certainly is relevant, though. It's easy to be wrong about what you're worth. It has little to do with what you were worth last year or next. If you're in Indianapolis, it has little to do with what you'd be worth in Seattle. Knowing how you stack up against your competitors (other people ready to apply for your job) is critical, and you shouldn't mention that you've got another offer unless you're prepared to take that other offer.
posted by jon1270 at 7:45 AM on January 6, 2010
It's a recipe for disaster only if you're wrong about what you're worth, over the long haul, to the company. To the extent that you're pretty much being paid what you're worth but your sudden leaving would be damaging, then yes, leveraging the threat of some short-term trauma to get a raise would surely set you up to be fired before long. But if one is truly providing their services at below market rate, so that hiring someone else to do the same work for less money would be difficult or impossible, then a subsequent firing would be equivalent to the company cutting off its nose to spite its face.
The current economy certainly is relevant, though. It's easy to be wrong about what you're worth. It has little to do with what you were worth last year or next. If you're in Indianapolis, it has little to do with what you'd be worth in Seattle. Knowing how you stack up against your competitors (other people ready to apply for your job) is critical, and you shouldn't mention that you've got another offer unless you're prepared to take that other offer.
posted by jon1270 at 7:45 AM on January 6, 2010
On further thought, the if you don't beat it I'm leaving part of what I wrote was over the line. While I have seen many circumstances when people actually accept other job offers, only to be 'hired back' with a renegotiated salary before they even leave, I don't believe there was any threatening involved. The point I was trying to make was that you should expect the company to do what it sees as being in its own interest. If you know that it would be in the company's best interest to pay you more than they do now rather than lose you, then you're in a good position to negotiate. If you can't demonstrate that that is true, then asking for more is probably a bad idea altogether.
posted by jon1270 at 8:04 AM on January 6, 2010
posted by jon1270 at 8:04 AM on January 6, 2010
Best answer: Argue based on economic terms. How has your productivity improved in the last year? Can you give a percentage increase based on your performance? Have you worked on increasingly more valuable accounts? It's hard to say without knowing what you do but try to think what you have done for the company based on the value of what they have received.
posted by JJ86 at 9:46 AM on January 6, 2010
posted by JJ86 at 9:46 AM on January 6, 2010
You can then go to your current employer and see if they are willing to match.
>>This is a recipe for disaster, and I've commented in similar threads about the reasons why.
Actually, what I suggested would give the OP an exit strategy. He secures a new job with a better pay package, and then asks his current employer if they are willing to match.
Not sure why this is a disaster.
posted by KokuRyu at 10:46 AM on January 6, 2010
>>This is a recipe for disaster, and I've commented in similar threads about the reasons why.
Actually, what I suggested would give the OP an exit strategy. He secures a new job with a better pay package, and then asks his current employer if they are willing to match.
Not sure why this is a disaster.
posted by KokuRyu at 10:46 AM on January 6, 2010
Response by poster: Thanks guys, there's a ton of good advice in here. In the end, I'll probably do something like what SquidLips suggests. This company is huge on loyalty, so I don't want to be adversarial until I'm really ready to leave.
posted by mad bomber what bombs at midnight at 5:22 PM on January 6, 2010
posted by mad bomber what bombs at midnight at 5:22 PM on January 6, 2010
This thread is closed to new comments.
Some things to strengthen your position:
- Get one of those free salary reports from indeed.com or salary.com to show what the market rate is for your position.
- Call up some recruiters and ask them what they think the market rate is for your experience level. It's easy to get recruiters to do things for you if you promise to tell your friends about their open positions.
- Get an offer from another firm. Drastic, and maybe you aren't thinking of leaving, but if they don't know the value of what you do for them, you should consider it.
- Try to quantify your value. This is not always easy to do, but it often makes a huge difference. Business people need to feel like they're making a sound business decision, and having a graph in their hand that goes up and to the right goes a long way, even when the exact figures are slightly fudged.
- Have children; being the breadwinner makes them feel guilty for not giving you raises, cutting your pay or laying you off
posted by AlsoMike at 10:02 PM on January 5, 2010