Negotiating is a necessary part of business and, well, life in general! You can argue that all things are a negotiation of sorts. Purchases, services, deals, communications: all things can benefit from proper negotiations.
Throughout my coaching experiences, the single most prominent and common request I receive is to help people make more money. This can, obviously, be done in many ways, however, more often than not, the motivators for this kind of request occur due to a need for more immediate income. Negotiating a salary is one of the quickest ways to increase your immediate income.
Negotiating your salary can be frightening, though. And understandably so! It’s nerve-wracking to consider the idea that you will willingly have your performance and worth evaluated through the eyes of somebody else. However, with these tips, you will surely find confidence and success in your negotiations for better pay.
Here is a quick overview of the three best tips for negotiating a raise:
1. Provide more value to your organization.
2. Frame the proposition in the light of company interests.
3. Know the rate you want and do your research.
I have found through personal experience and through my coaching experience that these three tips create the most effective results.
Let’s dive into each one of these points and examine the benefits that they have to offer, as well as how to make the most of your preparation and ensure a “yes” to your salary proposal!
Keep in mind that these points are in order of importance, that is, point #1 will more likely grant your success than point #2 or #3. We will discuss why this is later in the post! Let’s dive in and help you get that raise!
Provide More Value to the Organization
Your organization is a business, and as such, you must recognize the nature of a business to make salary decisions based on the worth of the position or individual. Put simply, a business will never hire or tolerate a person who brings in less income than they require in pay.
It’s a simple example, but If my salary is $60,000 annually, and I don’t bring that much value to the organization over the course of a year, I m likely to be fired. This is merely because there is a surplus between the value I provide and the amount I am paid. A business will always try to be on the benefitting end of this surplus.
As a business owner, from a practical standpoint, employees will never be paid as much as they are worth, that is because, if they did, the organization itself would make no money.
The organization mainly relies on what I call excess labor productivity (revenue that is before wages) to make money. Therefore, if you command a salary that is above the value you provide, you will not like the answer you get. Therefore, the key to raising your salary is by raising the value you provide the organization.
The good news? This is entirely doable and often more simple than you might think! The single most important thing to consider when negotiating a salary is making yourself an indispensable value to the organization you work for.
I have a friend who handles financial systems as a single point of failure (the only person who knows how to do the job) in his organization, you can bet he is indispensable and can command just about any salary he wishes!
Becoming indispensable to your organization means building a foundation upon which you are an integral part of systems and processes. The knowledge and experience you have should speak for itself through practice.
You can become a more integrated and valuable part of your organization in a few ways, I’ll list some here.
The single easiest thing you can do to provide more value is to complete work more quickly. The reason this is easy is because we are often dragged into various time-wasters in or around the office which delay our productivity and provide little to no value.
For example, many people who spend their time on social media during work hours see little in return. Taking measures against these time-wasters allows you to better focus and provide more work in less time.
Often, during my productivity coaching sessions, I have clients take note of, and categorize, the things they spend the most time on. You’d be amazed at how much time floats away when you don’t keep track of it!
Focus on Quality
The other added benefit of having surplus time is that it allows you to focus on creating work that is higher in quality. Quality adds much more value than quantity does in terms of business. I’d rather have and use one piece of relevant information as opposed to ten pieces of irrelevant information.
You can choose to delegate your newly-found time (from getting rid of time-wasters) on crafting a balance between quick work and quality work. Usually, a combination of “quick” and “quality” is perceived as valuable, and that’s exactly what you want yourself to be when you negotiate your salary!
If free-time is not bountiful, and, therefore, it is difficult to work faster or with more quality, try making your work more convenient. Usually, convenience is amazingly effective at increasing the perceived value of something, just consider any fast-food restaurant as opposed to home-cooking after a difficult workday!
It often doesn’t take much to be a little more convenient in a business environment. Instead of waiting for the boss to ask, send them your report early. Consider their perspective and tailor it for them. Format your reports or anything else in an easy to read manner.
These simple little actions can go a long way. It increases the trust between you and your superior, and may make you their go-to person! This is because you are often seen as autonomous and without the need for constant supervision.
Frame the Proposal In the Light of Company Interests
WIIFM. This short acronym makes waves throughout the negotiations of business, politics, and the world in general. It stands for “what’s in it for me?”
As a change management consultant, there are many aspects to organizational behavior to keep in mind. Ultimately, the most important thing to consider when attempting to rally a desire for change is how to communicate the benefits employees will receive by changing in the desired way.
Therefore, thinking in terms of the other person’s interests is extremely valuable in effective negotiations. As you consider crafting a proposal for a higher salary, also consider how your company benefits from this proposal. Communicating these benefits in a convincing and logical way will only help the strength of your negotiations.
Ask yourself, how will this proposal benefits the company in a way that you don’t already. Often times, during my coaching sessions, people will recognize that they can use the time they stole back from the time-wasters to take on more tasks, provide more value, and therefore, offer more work to be completed for higher compensation.
Obviously, you should add more value before the negotiation takes place to leverage the perceptions of your worth, but also consider offering more value during the negotiations to provide a concrete reason why your increase in pay benefits the company as well.
At this point in the process, you will be seen as a valuable, quality-centric, quick worker who is offering more to be done for a respectively higher wage. It is already likely that you will get it!
Know the Rate You Want and do Your Research
It’ unfortunate but realistic to consider the idea that the nature of your position as an employee will mean there is a cap on the wage you can receive. What I mean is this, despite how much value I provide, and how hard I work, as a cashier, I will likely never make as much as an executive would.
The principle here is a difference in the nature of the work we do. This is why it is critical to go into a negotiation knowing exactly what you want, what you don’t want, and the research behind the realism of what you ask.
Despite your efforts, occasionally you may be told no simply because the nature of your work is perceived as dispensable. It is an entirely frustrating situation to be in, I know.
This is where it is useful to do your research. Look into statistics like the median wages across similar job roles, as well as the wages of roles similar to those of your superiors, often, this will give you an idea of the wage cap you can receive in most circumstances.
The benefit of knowing exactly the amount you want is also realized during the actual negotiation process. Without knowing what you want, how do you plan on resisting their offers for a slight (but perhaps not satisfying enough) raise? By being prepared, you are ensuring that you don’t accept less than you are worth.
Be realistic in your proposal, don’t expect an amazing raise unless the specific circumstances require you to put in that much more work or even promote, which is another thing to consider!
During your negotiations, you may find that they give you a slight raise but offer you a promoted position, that position may be good leverage for you to make more money in the future. Ultimately, consider the cost and benefit of each to make your decision.
All in all, these are the top 3 tips for negotiating better salaries in a way that makes you valuable and successful! The key to more pay is preparation, perception, and hard work.
Here are the summarize tips once again:
#1 Add Value: Only when you add more to the bottom line can you logically defend your proposition for higher compensation.
#2 Frame Your Proposal in the Companies Interests: Describing how the raise benefits YOU won’t do much to convince them. Describing how the raise benefits THEM is far more convincing.
#3: Do Your Research: Ask for a realistic amount that more than satisfies you. Do the research so you don’t accept less than you are worth.
With this preparation, you can be much more confident in your worth as an addition to the organization. That confidence is the key to motivating you to negotiate in the first place! and with these tips, you can be wildly successful!
Thanks for reading!
Work With Austin!
-Austin Denison is a change management consultant from Southern California and founder/CEO of Denison Success Systems LLC. He is the author of The Essential Change Management Guidebook: Master The Art of Organizational Change as well as The Potential Dichotomy: The Philosophy of a Fulfilling Life.