If you want to earn more money at work to put towards your financial goals, there are generally two choices – find another job, or have a chat with your boss.
The second option can be confronting, particularly when you consider how many jobs can be outsourced or automated these days.
But if you feel undervalued, here are seven tips on how to negotiate like a pro.
1. Make it official
Before sitting down to talk, do two things. First, make an appointment to see the person who will decide on your salary. It might be your direct manager or the owner of the company.
Second, ensure that when you make the appointment, everyone understands that its purpose is to discuss your salary.
Doing both of these things will put you on the front foot. Your boss will appreciate the direct approach, and nobody gets blindsided.
2. Time your request
This involves understanding your company’s pay policy. It will vary from company to company but, as a rule-of-thumb, larger companies tie salaries to annual performance appraisals.
If so, you need a good reason to ask for an increase outside this period.
On the flip-side, if the industry you’re in is hyper-competitive and you’re an all-star performer, you might be doing yourself a disservice if you don’t ask now, especially if the company is doing well as a result of your work.
3. Understand the market
If you’re not across what your industry peers are getting paid, you need to be.
This is easy to find online and the Australian government has a list of award rates for hundreds of industries listed here.
Additionally payscale.com is a website that tells you what the market currently pays people in your chosen occupation.
As a guide, an all-industry standard annual raise in Australia may be indexed to inflation or cost of living.
Make sure you understand what that means, what your last pay-rise was and have these types of facts and figures committed to memory.
Asking for a 10% increase might be quickly rebuked in a company where pay-rises are capped at 5%.
4. Be able to state your value
Include detailed evidence of why you’re worth more than your current salary.
This part is crucial to your success.
Have you exceeded sales targets? Is the market moving quickly? Are you being underpaid for the level of responsibility you’ve taken on?
Take note of productivity improvements, cost-savings made, or major projects achieved, as and when they happen. That will make it easier to point them out whe it comes time to negotiate.
5. Know why you want it
It’ll keep you goal-oriented to understand what the raise you’re asking for means in real terms.
Receiving an extra 5% on a pre-tax salary of $90,000 might mean an extra $2,745 you could use to pay off your mortgage.
6. Don’t take your employer hostage
Leveraging an offer from a rival company or threatening to quit are both unprofessional.
In the first instance, you might be asked to take up the offer, and in the second, even if you do get the raise, there’s the potential for bad blood.
Remember that your career shouldn’t always be about money, so think strategically.
7. Be prepared for a ‘no’
This can easily happen, and how you react is important. The reality could be that your company’s budget is already stretched and there’s no room for increases right now.
There could be other reasons too, including that your performance isn’t as strong as you thought it was.
Either way, stay cool and if you’re still adamant, book a time to review the decision in six months’ time and ask for specific KPIs to work towards.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.