How to Negotiate a Raise: Tips for Successful Salary Negotiation

• 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.
• It is important to come prepared to the conversation with a target amount in mind, especially if this can be supported by competitor offers. 
• Never be afraid to leave a place of employment if it means you can achieve higher potential elsewhere. 

Importance of Asking for a Raise and Knowing Your Worth

We believe employees should never be afraid to ask for a raise from their employer. Feeling valued at your workplace is important, and your compensation should reflect how important you are to the company. If you feel underappreciated compared to your co-workers or the industry average, then perhaps it is time to have a difficult conversation with your boss.

To start, it’s important to determine if you’re being paid what you’re worth. This means doing your homework and analyzing industry comparisons to establish a target raise. Talking to colleagues in similar positions is another way to ensure fair pay across the company, but be mindful of their privacy. Another option is to browse competitor websites and see what they offer new employees. By gathering this information, you’ll be better prepared to negotiate a raise that reflects your value and contributions.

Timing and Preparation: Assessing the Financial Situation

To maximize your chances of success in negotiating a raise, it’s helpful to understand your company’s financial situation and determine if the timing is right to ask. For example, 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.

It also might be helpful to approach your supervisor when they are in a positive state of mind. If they have been stressed or overwhelmed recently, it may be best to wait until they are feeling more relaxed and open to negotiations. Remember, the more receptive your supervisor is, the more likely they will be to consider your request.

Present Evidence of Your Contributions for a Pay Increase

Lastly, we want to address the fact that you should remain confident in yourself and your abilities. If you have data or records that support your case, bring them to the table. Demonstrating how your performance has improved or how your contributions have positively impacted the company’s bottom line can help persuade your employer to increase your pay.

It’s worth noting that employees have the advantage in these conversations since it usually costs more to hire a new employee and to pay for the training to get them up to speed. Furthermore, keeping current employees fosters loyalty and improves morale, which benefits the company as a whole. Therefore, if you have evidence you deserve a raise, there’s no need to be afraid of the conversation. Remember you hold the advantage, and if you can prove your worth, there’s a good chance that you’ll receive the raise you’re seeking.

Speak With a Trusted Advisor

If you have any questions about asking for a raise, your investment portfolio, taxes, our 401(k)-recommendation service, or anything else in general, please call our office 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 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.

If you found this article helpful, consider reading:

• Qualified vs. Non-Qualified Dividends
• Recommended Books on Personal Finance
• Different Types of Debt
• Understanding Behavioral Finance

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.