How to Negotiate a Pay Raise

You work hard, you contribute, and you add some serious value to your team. You’re ready for your compensation to match the same level of commitment and dedication you’ve provided to your company. But, how? Approaching your boss can be intimidating and there’s always the fear that if you screw it up, you could face negative repercussions as a result. Yet, that raise you want is rarely served up on a silver platter. Rather, you need to ask for it, but do so with tact, confidence, and preparedness. As we like to say, the separation is in the preparation. Let’s take a look at how to negotiate a pay raise. 

List your accomplishments

You need proof to justify your request for a raise. You need to show the tangible value that you bring to your team and the specific instances where you went above and beyond what was asked of you to get a job done and completed with excellence. Use as many details as you can, such as how you saved the company money or boosted sales, or how you showed leadership under pressure. The more details, numbers, and facts you bring to the table, the better the chances your boss will say yes. We recommend you create a bulleted list of five to seven of your most recent major contributions.

This could even include added responsibilities you’ve taken on over the past year if your job description has changed at all. You might also consider adding any professional training you’ve completed or new credentials you’ve received that will benefit your employer. You need to convince them that they’re sure to see a return on par with the additional compensation they’ll provide. You should approach this from a win-win perspective.

Know how your salary compares

You need to have a specific figure in mind when it comes to negotiating for a pay raise. Research average salaries for your current position. You can use sites like Glassdoor to get an idea of what other people in comparable roles are paid. If you find you are somewhat underpaid for your role, that can be used as additional ammunition for your argument. Conversely, if you are vying for more responsibility and a title change, it helps to know what that position is worth at other companies so you can use that number as a starting point for negotiations.

Also, don’t be shy to ask coworkers what their pay is like. It’s safe to say there is a lot of taboo around discussing compensation in the workplace, but there’s no reason it has to be that way. If you have strong relationships with some of your coworkers that are built on open communication, trust, and honesty, you should feel safe broaching this topic with them, perhaps in a social setting outside the office. This is certainly a good way to gauge how your compensation compares to your colleagues, however, and what kind of room you might have for negotiating your own pay.

Consider negotiating other benefits or perks

It’s not always possible to negotiate a straight salary raise. Your company may be strapped for cash or the timing might be off. That doesn’t mean you have to walk away from the table with nothing at all, however. You should consider other areas you are willing to negotiate if your boss says “no” to a monetary raise. This could be additional vacation time, more flexible work hours, an additional stock grant, or even the ability to work from home. It’s always good to keep one of these in your back pocket just in case. You’ll likely have a good idea of what your boss might be willing to negotiate considering additional perks or benefits some of your colleagues might have.

Pay attention to the timing

You’re not always going to know when the best time to approach your boss for a raise is, but there are definitely times that are better than others. If your annual review is coming up soon, this is an ideal time to negotiate a pay raise as it fits naturally into the discussion on performance and accomplishments. If your annual review is no time soon, however, a good time to approach your boss would be immediately following a project you’ve done well on or any extra responsibilities you’ve taken on. This is when your boss is most likely to have the good work you’ve done and contributions you’ve made fresh in their mind and aware of the asset you are to the company.

Be professional

This should be a given. Professionalism is to be expected in all aspects of your job, especially in asking for a raise. Nothing will make your boss say “no” to a raise like not being professional. You should approach your meeting with your boss with the goal of finding a compromise between two parties. You should also make sure to bring a list of accomplishments neatly typed along with your requested salary printed at the top. This provides a point of reference for your boss and promotes transparency in the process. Avoid comparing yourself to co-workers when you make your case and you should never be cocky or greedy. Be realistic with what you are asking for. If you’ve only been in an entry-level position for a couple years, don’t walk into your meeting expecting a hefty bonus or massive raise or promotion. Any strong sense of entitlement is sure to only hurt your chances. Be confident, but not arrogant.

What if the answer is “no”?

It’s entirely possible that no matter how well you prepare for your meeting and present your case to your boss that the answer still ends as a “no”. This is ok and not the end of the world. If the only reason it is a “no” is due to monetary issues at the company level, try shifting gears. Ask for more responsibility in preparation for a raise down the road then ask if it’s ok to reopen negotiations in a few months. Also, consider what will be required of you to get a raise by that time then do it! If it’s still a “no” after all that, be vague in your response with something like, “I understand”. This rather ambiguous response will leave your boss wondering what you’ll do next and whether you may leave to find another position. A good boss knows the value of keeping their employees happy and turnover is expensive for a company. If they truly value you and the work that you do, but they know you are not happy with your level of compensation, chances are they are going to find a way to compromise to keep you happy and wanting to give them everything you got. If that still doesn’t work, then perhaps it’s time to start looking for work elsewhere as ultimately, it’s important that you are happy in your role and feel you are fairly compensated for the amount of work you have and responsibility you carry.

For more actionable insights that can help you better your financial life, join our monthly newsletter.

Chad Rixse grew up in Anchorage, Alaska and lived in Seattle, WA for 11 years where he graduated from the University of Washington before moving back to Alaska. He is fluent in Spanish, loves to travel and connect with other cultures. He’s been helping clients plan for their financial futures since 2014 and has an immense passion for helping others and making a positive impact in their lives. Outside of work, he’s a self-professed golf addict, foodie, and master taco maker.