6 tips for negotiating your next raise

In a recovering economy and a tight IT talent market, you have more leverage when angling for a raise. And the beginning of a new calendar year is a great time to ask for more money, as budgets are new and organizations begin to execute on their strategy and goals for the upcoming year.

After the 2008 financial crash and during the ensuing recession, many people were happy to have a job at all — any job, at any salary, says Lydia Frank, vice president of content strategy at PayScale.com. As the economy’s improving, businesses have much more flexibility in their budgets and are starting to loosen the purse strings, she says.

“Many people were afraid to ask for more money, and they didn’t have negotiating power. But what we’ve seen more recently is that a significant portion of people who take that risk and ask for a salary increase do get something,” Frank says.

Get over it

Salary’s not the most important aspect of a job, by any means, but it can make a difference in your overall satisfaction, your willingness to stay with your employer and your level of engagement. And disengaged employees end up costing their employers money.

The key to managing this tricky, nerve-wracking process is to focus on your accomplishments, achievements and your overall value to the company, and quantify those.

Tracking accomplishments

The first step is to track your accomplishments and achievements on a regular basis. This can be an informal achievements journal where you note the major projects and successes you’ve been involved in, or a more formal itemized spreadsheet or calendar that you’re updating on a regular basis, says Elaine Varelas, managing partner, Keystone Partners.

“At the beginning or end of each week, review the meetings, appointments and projects you were involved in, and summarize them in two or three concise, resume-style bullets. Name the document ‘Accomplishments’ with the month and year. These documents will serve you well at review time, as you review your annual goals, and will also help you make sure you are moving your agenda forward,” Varelas says. And be specific, it can be difficult come years’ end to remember what the “development project” was all about.

Over time, these documents add up to tangible evidence of your business value, and can help quantify your value to the company based on the metrics and impact that are most important for your organization, she says.

“Every role can be quantified by some calculation; number of customers served, money saved, revenue generated, mishaps avoided, speed increased, satisfaction survey ratings increased. Be very confident about what you bring to the job and the financial impact you have in the company. Challenging yourself to do this will help you identify your value to the company and ensure you are compensated accordingly,” Varelas says.

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Use your advantage

Negotiating a raise at your current company gives you a built-in advantage, as your boss should already be well aware of your contributions, achievements and your strengths, says Michelle Joseph, CEO of PeopleFoundry. If they aren’t, now is the time to show them, she says; this is when tracking accomplishments and being able to demonstrate how they impacted the company’s success becomes critical.

“Tangible examples of previous projects are good, but quantifiable examples are better. Ideally, prove how much money you’ve saved the company, how much money you’ve made the company, or how many man-hours you saved. Also, do your research — make sure the current and proposed salary for your role, in your specific region, with your qualifications, are in line with what others get paid by using sites like Salary.com or Glassdoor.com,” Joseph says.

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What’s it worth?

Objective research is another major factor in successfully negotiating a raise, Joseph says. Know how your current geographic location, the cost of living in your area and the specifics of your role affect your current and proposed salary.

“An advertising job in New York City will pay very differently than the same role in, say, Des Moines. If you have a salary in mind that you think is fair based on your value and your research, put your target salary number a bit higher than that — but nothing completely over-the-top – and, hopefully, the final number agreed on will wind up being your initial target,” she says.

Salary is based on value and contribution to the company, combined with the “going rate” for your particular skills and experience in your geographic region, as well as the specific perks and benefits you receive at your job — for example, you may be willing to accept a lower salary if you’re able to work from home, or if you have flexible schedules.

Sites like PayScale.com, Salary.com and Glassdoor.com are great places to start doing in-depth research about what type of salary range you should expect.

“Make sure you understand the going market rate for the position you want within a range, and take into account the external factors that can affect that range. Where’s the position located? How many years of experience do you have? What’s the size of the company? What’s their financial state? What industry do you work in? Taking into account these factors gives you a pretty realistic read of salary range, and then you can walk in with confidence and facts to back up your assertions,” Frank says.

Glassdoor.com’s recently released a tool called Know Your Worth, which promises to give you an accurate read on how your pay stacks up against others in the same industry, role and with the same levels of experience — but it’s not gospel. Make sure you’re doing your own research and understand that there may be company-specific factors that can influence pay rates.

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Bonus round

If you aren’t successful at negotiating a monetary raise, Varelas says, perhaps there are other options you can ask for; stock, executive benefits, financial counseling, flex time, increased vacation time, even bonuses, for example.

“Bonus incentives can be great for both parties because it allows for a system of checks and balances — the harder you work and the more you accomplish, the higher your year-end bonus, while the company benefits from your increased efforts,” she says.

Stay positive

Don’t get discouraged if your negotiations fail, either, says Frank. Depending on your situation, it could still be worth it to stay with your company rather than looking elsewhere for a bigger paycheck, especially if your benefits package is solid, or if there’s a growth opportunity that will further your career, Frank says.

“Where do you want to be a few years down the road? Don’t discount a company that can’t afford to give you a raise, but that will give you the best path to growth,” Frank says.

“Knowing the impact you can have on an organization from what you have done in the past and the concrete measurements you have, will help you set and get the compensation you want. Every organization has average salaries. Show that you aren’t an average contributor and lead the way to the best package for the highest contributions,” Varelas says.