How To Negotiate a Salary Increase – A Complete Guide
Identifying Market Value and Salary Expectations
Before jumping into salary negotiations, let's determine your market value and benchmark your desired salary. If you don't do this properly, you're either going to sell yourself short or ask for too much. Both will leave you with a negative impression following the negotiation. Therefore, it's best to prepare yourself!
Tip 1: Determine your market value
Want to know your market value by just snapping your fingers? It isn't that simple. To do this, you need to invest a bit of your time and do your research.
To determine your market value, you can:
- Use salary tables and comparisons on the internet
- Use salary calculators
- Check job postings
- Ask industry colleagues in your network for an estimate
- Ask colleagues or alumni for advice
In addition, factors such as your education, achievements, work experience, further education and training, expertise, personal skills, awareness, and image of your previous employer and possibly your reputation in the industry should be taken into account.
Tip 2: Identify your desired salary
Now you know the average salary range for your position. What should you focus on now to determine your desired pay?
To make the best decision, consider the industry in which you are applying, which of the desired qualifications you bring to the table, the size, and the current economic situation of the company. Keep in mind that the job market also influences the salary, as does the region in which you are applying.
Tip 3: Determine the salary increase
If you're not negotiating for starting salary, you can use these values as a guide for salary increases:
Negotiating salary in the same position and company: 3-5% increase.
New responsibilities and duties: 5-7% increase.
Promotion to a new position: 10-15% increase.
Headhunted by another company: 15-20% increase.
Tip 4: Money isn't everything
Don't just negotiate for money. You can considering negotiating for special benefits that are available in addition to salary. This is especially important if it becomes clear in the salary negotiation that the company really doesn't have the budget to meet your salary requests.
For example, you can negotiate around:
- a company pension plan
- gas money
- bonus payments
- company cars or other vehicles
- annual bonuses
- personnel discounts
- vacation pay
- additional vacation days
- Christmas bonus
When Is the Right Time for Salary Negotiations?
Timing is everything. You can get far more benefits in salary negotiations by choosing the right time to discuss a pay raise.
Tip 1: When was the last time?
Has nothing changed about your position and responsibilities? That's no reason not to negotiate for a salary increase. Still, in this case, you should keep at least a 12-month gap from the last salary negotiation.
Tip 2: The perfect time
Starting a new job comes with salary negotiations. But there are also situations and circumstances where salary negotiations, apart from the initial job interview, makes a lot of sense.
Use the following events to negotiate a higher salary:
- After the contractually agreed upon probation period
- At your annual performance review
- After a promotion
- After a department transfer
- When your employment contract is changed (e.g., part-time to full-time, freelancer to permanent, etc.)
- In the case of new employment contracts
- Before the completion of successful projects
Promotions, a permanent employment contract, or being taken on after the probationary period show that your manager is satisfied with your work. These occasions are therefore the perfect occasion to negotiate a salary increase for your achievements.
Tip 3: Better wait than never
You might be out of luck in negotiating a pay raise in certain cases. For example, it's best to avoid talking to your manager about a salary increase if budgets have recently been cut, market share has been lost, a project didn't go as planned, or the company has missed out on important clients.
In these instances, it's better to hold off until your manager is in a position to seriously take your salary increase into consideration.
Arguments For Salary Negotiations
Your interview with your supervisor is planned! Now, preparation is mandatory, because if you start negotiations without a strong argument, it will be difficult to get the maximum output from the meeting.
Tip 1: Finding arguments, made simple
Have you ever heard of a performance portfolio? This is a suitable tool to show your supervisor what you have achieved.
For this, you describe your work and what tasks you take on. You will quickly discover that you take on work that is not actually recorded in your job description. And you already have an argument for your salary negotiation talk.
The next step is to create a job description. List what you've accomplished, for example:
- Increases in sales
- Successful projects
- Customer acquisition
- Cost savings
- Training and development
- Increased sales figures
Don't forget to note how many hours you spent on this extra workload.
Finally, record positive feedback from superiors, colleagues, and also customers in writing. This way, you will be well-prepared and can confidently negotiate your salary with.
Tip 2: Look to the future
Companies are happy about past successful years. But it is even more important that the future promises success. Therefore, dare to look into the future.
During the salary negotiation, explain to your manager how you would like to continue working for the company's success in the future.
Why are your experience and skills so essential to the company in upcoming projects and throughout the coming years? Make it indirectly clear that the company would be missing out on future growth and revenue without you.
Tips For The Conversation
The day of your salary negotiation is coming up. Are you well-prepared, but want to get a bit more out of it? Then read on for these targeted interview tips!
Tip 1: Mention an unrealistically high amount
Are you ready for a little humor? Then, in jest, name an unrealistically high amount right at the beginning of the salary negotiation. You can say, for example, that you dreamt last night that you would walk out of the negotiation talk with 150,000 EUR per year.
This will set off the so-called anchor effect and give you a better chance of getting a higher salary. However, the example above might be a bit exaggerated. You should not overdo it either — that can backfire.
Tip 2: State your salary expectations first
In the same vain as the previous tip, be sure to make the opening offer. That way, it's more likely that your salary request will become a reality.
Tip 3: No round numbers
Your desired salary is 50,000 EUR? Don't make the mistake of providing a rounded number. Deliberately choose a specific number, such as 50,730 EUR. This creates the impression in your manager's mind that you have done your research and are serious about the salary request.
Tip 4: Share your research on salary benchmarks
It is easy to throw an amount into the room, but it's better to give your supervisor a comparison based on research. For example, during the market value assessment, you found that professionals in your industry and position earn up to 59,000 EUR on average.
Perhaps you have less experience, which justifies your lower salary request. Nevertheless, this gives your interviewer in the salary negotiation the feeling that he or she is getting a good deal with your lower offer of, let’s say, 57,240 EUR.
Prepare and Negotiate a Higher Salary
Put our tips into action and you'll be fully prepared for your next salary negotiation. Dare to try something new in the interview and stay confident. We wish you success and, of course, a pay raise!
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