#YourCareer : How To Ask For A Raise Amid Soaring Inflation. Despite Historically High Inflation, a Labor Shortage, you Might Still find it Hard to Negotiate Salary. A MUst REad for ALL!
Consumer price increases are hitting near-record, 40-year highs. A labor shortage is escalating. State pay transparency laws are making it easier to learn what jobs are paid. And a reawakened labor movement is forcing employers to be more responsive to workers’ demands.
If ever there was a good time to ask for a raise, it’s almost certainly now.
“People don’t perceive themselves as having as much leverage and power right now as they do,” says Ben Cook, the CEO of Riva, a salary negotiation startup founded with Harvard Business School experts. “Right now is a phenomenal time to go and ask for a raise.”
Yet despite this unprecedented wave of favorable conditions, you might still find it hard to ask your boss for more salary. For many, touting your own accomplishments—not to mention having a frank talk about money—feels awkward. If you’re a woman, you know you have to navigate tricky gender norms about how assertive people expect you to be.
And even as more workers talk openly about pay, negotiations tend to be information asymmetry at its worst, with managers typically having more data about what jobs are paid than you.
Despite historically favorable conditions—high inflation, a labor shortage, more transparency about pay—you might still find it hard to negotiate salary. Here, key steps to ask for more pay, and what to do if the response is no.
Still, there are ways to go into the conversation with confidence—and come out of it with a raise–or at least something else desirable you want. Below, find key steps to remember when you negotiate salary, and what to do if the response is no.
WAIT FOR A WIN
Timing is everything, especially when asking for a raise. Don’t plan it for when your boss is at her busiest or after a slip-up. And pick a time that immediately follows a win you can claim or a big sale you just clinched. “The timing of the ask makes a huge difference,” says Kathleen Downs, a senior recruiting manager for Robert Half.
You also don’t want to go in too late, after payroll budgets have already been set and promotions have already been decided. The discussion will more likely be a process that takes time. “A raise conversation is not one day, one half hour of time,” says Katie Donovan, a pay equity and salary negotiation consultant based in Boston. “It needs to be planned out usually for next fiscal year. Start it six months ahead. … it’s going to take a while.”
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PERFORM YOUR OWN JOB SEARCH
To get started, play the role of job seeker, looking for what not only your company, but others like it, are paying for new hires in similar roles. A small but growing number of localities, like Colorado and, by the start of next year, New York City and Washington state, now require employers to disclose pay ranges for new jobs.
Experts say that’s starting to have an impact on salary information in job ads, with employers publishing ranges elsewhere, too. “Do a theoretical job search—look to see what salaries in those places are offering,” says Linda Babcock, a professor of economics at Carnegie Mellon University and the author of books on negotiation and women’s careers. “That can help you calibrate your request.”
With inflation soaring and companies having a harder time finding workers, employers fear the new laws will reveal inequities to current workers. Executives say a phenomenon called salary compression—when new workers with less experience are being paid similarly to those with more tenure and skills—is happening more now. A recent survey by Robert Half found that 56% of C-suite executives said they’ve seen pay discrepancies between new hires and more tenured staff in the past year.
If your employer isn’t being so conscious—and you see a job ad at your firm that pays more—it should help you. “Calmly and professionally say ‘explain to me what I’m misunderstanding,” Donovan suggests. “This person will be coming in and doing the job I’m doing right now. … Why would I not get paid what that person would get paid?”
ASK OTHERS WHAT THEY THINK YOU SHOULD MAKE
By now you know to do your homework before you negotiate salary. Look at web sites such as Payscale and Glassdoor. Ask professional associations for salary data. Find databases in your field. Look up Bureau of Labor Statistics data.
But such sources can sometimes be out of date or unspecific; in those cases, ask people who work in your field. If you’re uncomfortable asking someone what they make, says Babcock, ask people who might oversee a role like yours for their expertise instead. “Ask, ‘what do you think I should make for this position?’ They can use all the information they know, and you’re going to get a broader range of data.”
Or, if you ask a peer who works at another company, replace the awkward “how much do you make?” with an offering of your own salary and the question “how would that match up within your organization?” advises Downs. “There are ways to find out what other people are making,” she says, without asking the question too bluntly.
FOR WOMEN, MAKE A COMMUNAL PITCH—AND AIM HIGHER
The actual words you use really matter, particularly for women. Society views women as being “others-focused,” so when they ask for something for themselves, “there’s inherently friction there,” says Kathryn Valentine, the founder of Worthmore Strategies, a negotiation training and consulting firm for executive women.
Therefore, for women, it’s important to keep the conversation collaborative, communal and holistic, says Valentine, making your request in terms of how it can help your boss or the company. A sample pitch might say something like this, she suggests: “Last year I was able to bring in $500,000 in sales. I believe we’re on track to deliver 20% more this year. In order to deliver on that goal, I’d like to bring my compensation in line with market value, which is X. What do you think?”
A simple formula, she says, is to highlight past performance, combine it with future potential and follow up with a direct request. Then stop talking. “To make others feel comfortable, women will continue to talk and in doing that they [hurt their negotiating position],” she says.
Women, suggests Donovan, should ask for at least 75% of the job’s market value. Research has shown that women are more likely than men to be paid in a tight range around the median, and as a result, are less likely to be paid at the top end of the range. “Median pay for everyone is always lower than the median pay of the white guys,” Donovan says.
USE A SPECIFIC NUMBER—AND GO FIRST
Much negotiation advice suggests you should wait for the other person to make the first offer. But unless you have no idea what the pay range should be, says Valentine, research shows it pays to go first. Doing so means you “anchor” the conversation with your number, she says. “If you know the bargaining zone, you always put out the first number.”
She also suggests—again, particularly for women—starting with a specific number, rather than a range. At least in her experience with clients, “when you give a range, what they hear is the lowest end of the range,” she says.
Jennifer Trzepacz, the chief people officer for SymphonyAI, agrees. Without a specific number, it’s hard for managers or human resources professionals to know how you’re valuing yourself or what will close the deal. “When they say ‘I’d like a raise’ and they don’t say specifically what [the number] is,” she says of people who request a raise, “there are times when you go back and get them the raise and they’re like ‘that’s not what I wanted.’” As a result, they’ve advocated on your behalf for nothing.
WITH COUNTER-OFFERS, KNOW THE CULTURE
Be careful about using outside salary offers to get a raise unless you know how they’re typically received. “Different companies have different cultures about this,” says Babcock. “At some companies, if you come with an outside offer they say ‘let me help you pack.’ In other companies you don’t get a [raise] unless you have an outside offer, and it will help your supervisor advocate for you. But you really have to know what the organization’s culture is like.” If you’re not sure, ask peers you can trust about their experiences with presenting outside salary offers and how counter offers are viewed.
Negotiation experts suggest using the salary offer you’ve received to inform your market rate, or cast it as a surprise that’s come to an employee who’s committed to the organization. “You can say ‘I have not been looking, but this came my way and I was really surprised to see that they were compensating at 20% more. Can you help me close that gap so I can continue contributing here?’” Valentine suggests.
If you still don’t get the raise you want, pay experts say, ask what you need to do to get one—and then don’t let the conversation stop without concrete specifics. “You say, what needs to change so that you can say yes?” says Donovan. If they’re changes you can actually make, do them, and then come back. But if “they keep moving the finish line, then you know you’re never going to succeed there. Go look for another job.”
Or, think about what else you might want. If your boss says they can’t boost your base pay, consider negotiating for additional time off, eliminating responsibilities that won’t position you for a raise later or even more equity if it’s a startup. “We really encourage our clients to be as flexible as they can in terms of the currency in which they get paid,” says Riva’s Cook.
KEEP ASKING QUESTIONS
In the end, says Donovan, one of the best strategies for negotiations is just to try and keep asking questions. “You as the employee do not have to have the answers. You’re not teaching them anything they don’t know,” says Donovan. “The more questions you have for each no they give you, the more likely it will be that you get it. The winner of every negotiation is the person who can keep the conversation going. Once I shut you up, I win.”
Forbes.com | April 25, 2022 | Jena McGregor
