The do’s and don’ts of negotiating a raise

These are turbulent times. More than 40 million people left their jobs last year. And they did not sail off into the sunset and disappear from the workforce. They got better jobs. Nowhere is this truer than in technology, where keeping a tech team staffed has become a serious challenge. Unemployment in technology is at 1.3%, one third the already low levels of other industries. Recruiting and retention are not only on your mind, but they are also on your boss’s mind. So, if you like your job but would like to feel more appreciated, this is a good time to speak up.

In fact, if you haven’t asked for a raise, it’s costing more than you know. “Two thirds of American workers fail to negotiate their pay,” says Ben Cook, CEO of job-negotiation platform Riva. “That costs the average worker a million dollars over the course of their career. For a CIO or anyone on the path to the C-suite, that number is much higher. You might think you are leaving a couple thousand dollars on the table. But the money you leave there today costs you this year and next year and in the inflation-adjusted raise of the year after. Raises compound upon raises.”

The thing is, though, you need to do more than ask. You have to negotiate. “Sixty-six percent of American workers fail to negotiate pay,” says Cook, “but 100% of employers lowball on the first offer.”  

This is a conversation you want to prep for. Don’t go in there, deliver an ultimatum, complain about your mounting bills, or whine about unfair compensation. Those are rookie moves. Negotiating is an art and a skill, and it requires significant preparation. But it’s well worth it.

“Negotiation should be the best paid hour of your life,” says Cook. “It feels like pulling teeth. It can be intimidating. It sounds unpleasant. But even a single hour spent at that bargaining table can put $25,000 in your pocket.”

I asked negotiating experts for advice on how to prep for this conversation and to handle the inevitable pushback. Here’s what they say you should do — and not do.

Do: Lots of research

The first step in this battle of the wills is to arm yourself with knowledge. “Find out what the industry is paying for your role,” says Deb LaMere, chief human resources officer at Datasite. “Get some anecdotal information from your peers, if possible, but also go online and do some research. You can even get a good sense of what jobs are paying on job listing sites.”

But Margaret Buj, senior talent partner for EMEA, US, and LATAM at Mixmax, suggests digging deeper than a Google search when it comes to figuring out what you’re worth. “For people trying to figure out what their tech salary should be,” she says, “the information you get is wildly inaccurate. Glassdoor is amazing for checking out a company, for example, but I find the tech salaries there to be inaccurate.”

Several people suggested simply asking the HR department for the salary range for your position. But Buj suggests you also talk to third-party recruiters. “They talk to a lot of people at your level and might also have salary surveys.”

This is basically arming up for battle. The person you will ask for this raise already has all this information. “HR departments have paid access to a massive database with all the market data,” says Cook. “The candidate doesn’t have any of that.” His firm levels the field by providing that information, but, he says, this research is not a magic bullet. You will not discover a number, ask for it, and win at this.

You need to arm yourself with this information but “it is more about leverage than just the research,” says Cook. “We try to work with clients to understand what is their walk-away and what is their employers walk-away.”

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In the current workforce, tech people have a lot of leverage. But knowing the market is only step one.

Don’t: Think of negotiating as a fight

Although negotiations can be tense or seem like something won or lost, it’s important to stop thinking of this conversation as a battle. “Negotiating is a lifelong skill,” says Cook. “Particularly for someone who wants to get into the C-suite. You’re not going to get there if you don’t learn to advocate for yourself. And you’re certainly not going to succeed there if you can’t negotiate.”

If you hesitate to negotiate because it feels like an adversarial way to behave with someone you plan to work with, readjust your view of negotiating. It’s not a battle. It’s problem-solving.

“Everyone thinks that negotiation is about arguing,” says Cook. “They think of negotiation as two people sitting on opposite sides of the table, making steely eye contact until one side caves. This could not be further from the truth.”

In fact, going into that conversation hostile is a bad negotiation move.

“Don’t be overly aggressive,” says Buj. “If you lead with attitude, they might decide not to make you an offer at all. I have seen that happen. We once withdrew an offer because the person was so angry. Be gracious and reasonable.”

“Negotiation is about two people sitting on the same side of the table,” says Cook, “working through issues that are preventing them from reaching a deal. The huge myth is that negotiation harms relationships. Negotiating is not about arguing. Negotiation is about meeting your interests in the most mutually beneficial way you possibly can.”

You are solving a problem for yourself and for your employer. And along the way, you are impressing them with your ability to negotiate reasonably and effectively.

Do: Be flexible

“Always keep the big picture in mind,” advises Jill Hauwiller, executive coach and founder and principal consultant at Leadership Refinery. “There are lots of elements to negotiate on. Don’t get fixated on one item like salary. Be flexible and keep thinking about the big picture.”

If the big picture is, in your case, a bigger role and a step up the ladder, don’t fixate on salary to the exclusion of your goals.

“Be flexible in the currency that you get paid in to maximize your overall offer,” says Cook. “If you’re working for a startup,” he says, by way of example, “depending on where they are in their fundraising cycle, it may be that equity is cheap and cash is super tight. Or maybe they don’t want to part with equity but are flush with cash. The more flexible you can be, the better your odds of increasing your overall package.”

But don’t play weird games and hold back the thing you need or want as some sort of bargaining strategy. That will likely annoy everyone.

“If salary is something you want to negotiate, do it first,” says Hauwiller. “Prioritize that and get that out of the way.” No one wants to spend hours talking about PTO, flexible work, and education perks only to discover you need a salary they can’t deliver.

Don’t: Take no for an answer

Asking for a raise might go well and quickly or you might find yourself in a long game. If you are met with a no, don’t crawl away to lick your wounds. Consider it an opening gambit for a more complex negotiation toward your goal.

“Let’s say you’re unhappy with your current pay,” explains Cook. “You ask for a raise, and they say, ‘Based on your level, we can’t go any higher.’ Now you start to negotiate for a promotion. Maybe you have to get the title first and the better money that comes with it.”

Even if that’s not quite your scenario, there are lots of other things you can negotiate for, in the short term and in the long term. “You can negotiate for nice perks like vacation days, remote work, and things like that,” says Cook. “You can negotiate for better reporting lines, a monthly conversation with your boss’s boss, or to work on specific projects.”

One smart thing to ask for, he says, if you are thinking of this promotion as a step on your way to the C-suite or up the ladder you are on, is to ask for a faster review cycle.

“You can say, ‘I understand that we can’t get there today. But can we revisit this in six months with a clear plan for the things that I would need to do to show you that I’m ready for the next step,’” he says.

Do: Ask Questions

“Ask as many questions as you can about how your organization approaches compensation,” says Christy Pruitt-Haynes, HR consultant at NeuroLeadership Institute. “Do they focus on internal equity? Or are they more concerned about external equity? Understand what the focus is for your organization, and act accordingly.”

Often, because of the competitive hiring market in technology, tech companies are focused on external equity. This simply means that the company sets their pay scale based on what other companies are paying for a similar role.

“If your company is externally focused,” says Pruitt-Haynes, “pay attention to what other positions like yours are paying in the market. Really do your research. That gives you some data. Because anytime you can go with data, when asking for additional compensation, it’s going to be much more impactful.”

Another way that asking questions can help you negotiate, according to Cook, is when you are getting a “No way!” or “This is our absolute final number!” response to your salary or other compensation ask. “This might just be a bargaining tactic,” says Cook. He suggests digging a little deeper to find their why.

“Probe deeper so you can understand their constraints,” he says, suggesting a chain of questions. “‘Help me understand that? What’s driving that? Why is there a cap? Is this tied to location? Is it tied to years of experience?’ You can often uncover their underlying interests and design a package that meets your interests and theirs.”

Don’t: Be too humble

“Do a little PR for yourself,” says LaMere. “What have you done to deserve this raise?” Don’t be afraid to present this as data points, to remind everyone of money you saved or accomplishments that started with you or projects you headed up. “It’s hard to do that, but when you lay out the facts, it can become a great conversation with your manager, and they will also have the facts they need to take to their boss,” she says.

Pruitt-Hayes agrees. “Understand how you have performed against your job description and against the priorities that were set for your role,” she says. “Pay particular attention to areas where you have over indexed, outperformed, or done some extra. Maybe you’ve helped out on additional projects or led an internal team or perhaps you have even done something like lead an employee resource group. Even things that are not directly related to your job but provide some additional lift are helpful.”

It helps to keep track of these things, as they happen, so you don’t forget your own wins. And it’s a good idea to be as precise as possible when it comes to money saved, the size of the project, or the gain for the company.

Do: Consider your timing

Sometimes something as simple as the time of year you choose to present your case can have an unforeseen — to you — effect on the outcome. Take timing into consideration when you are doing your research.

“Know the timeline for your organization’s salary review process,” says Pruit-Haynes. “Ask HR some questions so you can understand when departments set budgets. That way you can make your ask ahead of that, so they can factor it in.”

This can remove a big obstacle from your negotiation and perhaps turn what might have been a long game into a shorter one.

“Once budgets are set,” she explains. “It’s harder to find that additional money for compensation. But it is so easy to find this out by talking with people about what the budget process looks like. They will probably take it as you being interested in understanding how the company works. But this research can provide you with great information on how to best time your request.”

More on advancing your career:

Careers, Salaries

Source: cio.com