Confidently Navigate Your Next Raise: A Guide to Strategic Salary Negotiation

Start With Confidence and Self-Worth

We believe employees should never be afraid to ask for a raise from their employer. It is important to feel valued at your workplace, and your compensation should reflect how important you are to the company.

If you feel like you are underappreciated compared to your coworkers or compared to the industry average, then perhaps it is time to have a difficult conversation with your boss. You may not know if you are undervalued, so the first step is to do your homework.

It is crucial that you know what raise you are trying to target, and analyzing the industry comparisons can be a great starting spot.

You could also consider having conversations with your coworkers who are in a similar position to ensure that pay is comparable through the company. This could lead to an uncomfortable conversation, though, if you or the coworkers prefer privacy. Also, you could consider browsing a few websites to check what amounts are currently being offered to new employees at the competitors.

Understand Your Employer’s Financial Position and Timing

Understanding the financial situation of the company may help you estimate how much of a raise you might be able to receive. Or it might help you identify if the timing is right to ask.

We do not believe you are not likely to receive a raise if the company overall is struggling, and you are more likely to receive one if you know that profits have been outstanding lately.

Also, we feel it might be helpful to gauge the type of mood your supervisor is in when approaching the conversation. If you know they have been stressed more than normal at work or at home, then you may want to wait until they are in a happier state.

The better they feel, the more generous they may potentially be in the negotiations.

Support Your Request With Facts and Results

Lastly, we want to address the fact that you should remain confident in yourself and in your abilities. If you have any data to support your case, then consider bringing it to the conversation.

If you have records showing that your performance has been on the rise or if your contributions are positively affecting the company’s bottom line, they could be more willing to increase your pay. We recommend showing them how valuable you are and bringing enough evidence so they cannot disagree.

Employees likely have the advantage in these conversations since it may cost more to hire a new employee and to pay for the training to get them up to speed.

Keeping existing employees could also increase loyalty and employee morale, which may benefit the company overall. We believe if you have the edge and proof that you are worth the raise, there is nothing to fear in the conversation. 

Strategies to Ask for a Raise- Key Findings

• We believe employees should never be afraid to ask for a raise if they feel their current pay does not reflect their hard work and contributions to the company.
• We feel it is important to come prepared to the conversation with a target amount in mind, especially if this can be supported by competitor offers. 
• We think you should never be afraid to leave a place of employment if it means you can achieve higher potential elsewhere.

Speak With a Trusted Advisor

If you have any questions about your investment portfolio, retirement planning, tax strategies, our 401(k) recommendation service, or other general questions, please give our office a call at (586) 226-2100.

Please feel free to forward this commentary to a friend, family member, or co-worker. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.

We hope you learned something today. If you have any feedback or suggestions, we would love to hear them. 

Best Regards,

Zachary A. Bachner, CFP®

with contributions from Robert Wink, Kenneth Wink, and James Wink. 

After graduating from Central Michigan University in 2017 with specialized degrees in Finance and Personal Financial Planning, Zachary Bachner set himself apart by earning the CFP® designation. Zachary now writes articles aimed at helping everyday people understand complex financial topics. He focuses on explaining financial planning concepts and strategies in clear, simple terms.

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Sources:

• https://www.indeed.com/career-advice/pay-salary/guide-how-to-ask-for-a-raise
• https://www.bestcolleges.com/careers/how-to-ask-for-raise/#:~:text=Prepare%20your%20case%20and%20determine,use%20data%2C%20and%20be%20specific.