How To Successfully Negotiate A Pay Rise

How to Successfully Negotiate a Pay Rise

By Mark Wager

The discussion about how much money you earn for the work you do is the most important conversation you will have at work, yet very few people actually prepare for it. Too often, people want or even desperately need more money, but their request fails because they are unaware of the techniques that can make the difference between their boss saying no and saying yes. In this week’s article, I want to explore some practical tips that will help you successfully negotiate a pay rise.

It’s not a fairness issue

One of the biggest mistakes I see people make when asking for a pay rise is framing it as a fairness issue, for example, “I’m not paid as much as someone else in the team; this is not fair.” While this is completely understandable, it’s not the most effective approach for two primary reasons. Firstly, while salary is a fairness issue for the employee, it’s a business issue for the employer. Secondly, you are telling your employer that they are not being fair, and criticising someone is not the best way to influence them. Imagine if you walked into a shop and the sales assistant started by criticising you—how would you feel?

It’s about the value you bring

The argument for a pay rise needs to be framed as a business case: how much is an employer willing to pay for the value that an employee brings? The relationship between an employer and an employee is a business one, even if it doesn’t feel that way. Just because people get on well doesn’t change the fact that this is still a business relationship. The employer requires services from the employee and remunerates the employee in exchange for those services. If you doubt this, ask yourself how long you would continue working if you weren’t getting paid. You are involved in a business arrangement with your employer, and now you want to renegotiate the terms of that arrangement.

It’s a negotiation, not an argument

The first stage of any negotiation is to ensure that both parties are not opposed to each other. Instead of portraying the pay rise as a wrong that needs to be corrected, present it as a problem that you have and require assistance to solve. Imagine instead of saying, “You don’t pay me enough,” you said, “I need your help. I really want to stay with our company, but I’m finding it difficult because other companies are offering more money for the same position. I’m trying to find reasons to stay. Can you help?” The second statement positions both parties on the same side of the negotiating table, making an agreement far more likely, while keeping the ownership of the issue with yourself rather than delegating it to the employer.

Build a business case

The second stage of the negotiation is to present a business case. Like every business case, you have to articulate the return on investment. If your employer spends X amount of money on you, then what will they get as a return? This way, the discussions become an investment decision rather than a reward decision. Investment decisions are always more attractive to businesses because the focus is on moving the company forward. Ask yourself why your employer should pay you more. Are you prepared to perform extra duties or take on more responsibilities? In many cases, the employee is already doing the extra work, which is an issue because if you are doing the extra work, then the employer has already renegotiated your work arrangement, and by doing those extra duties, you have agreed to that new arrangement without extra money. If this is the case, then you need to ask what the starting salary of your replacement would be if they had the same experience as you. If it’s feasible that your replacement would be paid X amount extra, then it’s a sensible business case for you to have X extra money, allowing the employer to avoid the additional loss of time, cost, and risk of recruitment.

Don’t apologise for asking

Here’s another major mistake people make: they ask for a pay rise but are apologetic when they do so, thereby diminishing the impact of their request. Remember, this conversation is not about being happy or unhappy at work; that’s not the issue. The conversation is about value—you and your employer have different perspectives about how much you are valued. I know it’s awkward, but it’s okay to ask for more money as long as your request is based on a logical argument. If the final answer is no, then you’re in the same situation as before, so there’s no reason not to ask.

We are in a tough global economy, and money is tight for everyone, so in some cases, no matter how well you prepare your arguments, there’s a high probability that your employer just can’t afford to pay you more. Consider what else would make you happy—maybe a change in hours, more working from home options, or other perks or benefits. Remember, remuneration is more than just about money; it’s a package. So, prepare to be flexible in your negotiations.

About the Author

A strong believer in taking complex leadership & psychological theories and making them accessible to people regardless of their background, education or industry Mark has helped develop Leaders from some of the Asia-Pacific region’s top organisations such as Amnesty International, NZ Red Cross, Habitat, Heartland Bank, the NZ Rugby League, the Blues, the Catholic Church, Weta workshops and many more.

Are you a manager struggling with poor-performing staff, team motivation, or effective delegation? As an experienced leadership Coach with over 30 thirty years managerial experience Mark Wager specialises in helping managers like you tackle these challenges head-on. Imagine transforming your team’s performance, boosting morale, and mastering delegation, so you’re not shouldering all the work. With tailored strategies and personalised support, Mark will empower you to lead with confidence and ease. 

Work together to unlock your full potential and create a thriving, productive workplace. Reach out today and take the first step towards exceptional leadership. Contact Mark for a free 30 minute strategy session