As the cost of living crisis bites, many of us are looking for ways to expand our income.
Average pay rose by 6.4% between September and November compared with the same period in 2021. However, when adjusted for inflation, average pay declined in real terms by 2.6%.
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Thousands of workers are voting with their feet and taking industrial action in a bid to get a better pay deal.
But for many others, there is still the possibility of negotiating individually to land a pay rise.
To boost your chances of success, you’ll need to do your homework and prepare for the meeting where you can present your case of why you deserve a pay rise. Simply asking for more money is unlikely to be successful.
Here are 10 top tips on negotiating for a pay rise.
1. Do your research
Start off by finding out what most people in your job are being paid. There are plenty of online salary checkers that tell you the average pay for your job title. You could also discreetly ask colleagues doing a similar job what they earn (and reveal your salary in return).
2. Build your case
Alongside this, be ready to show why you deserve more money. “Your fundamental objective is to prove you’re an asset to the business, so structure your case around this idea,” says Geoff Fawcett, director of recruitment firm Hays. Make a note of what you have achieved and how you have contributed to your team. Back up your argument with financial facts. How have you helped bring more money into the business, or made savings?
Gina Buckney, founder and director at Your People Power, a workplace performance and wellbeing organisation, tells MoneyWeek that as well as financial value, you can also highlight behavioural examples, such as “you might adopt a 'can do attitude' and always take on more work or cover for others' absences”.
She adds: “The more examples you can gather, the better, as not only will it prove your case to your leader, but it will also give you the confidence to ask.”
3. Ask for a meeting
Scheduling a talk in advance will allow you and your boss time to prepare. It also means you're more likely to have a productive conversation. If your boss asks what the meeting is about, be upfront and say it’s about your performance and pay.
Consider the best time for the meeting. Maybe your manager has a particular day that is quiet, with no stressful deadlines. Also, think about the overall business: asking for a pay rise when the company is doing well, rather than going through a difficult patch, should boost your chances of bagging some extra money.
4. Prepare for the meeting
Confidence is key when asking for a pay rise. “If you go into the session not feeling confident in what you are asking for, you might have difficulty convincing your boss,” notes Buckney.
“The more time you spend on [steps 1 and 2] the better, as this will give you the fire in your belly that you deserve it. Practice what you will say and visualise how you would like the meeting to go, because playing the scenario out in your mind first will help you spot any flaws in your pitch. Think of questions or pushback you might receive and prepare answers ahead of time.”
5. Have a figure in mind
It’s worth having a figure in mind before discussing a potential pay rise. This means you won’t be caught off-guard if your manager asks what sort of salary you’d be happy with (although you can try and push back and ask for your company to suggest a figure first). It also means if your company does agree to a pay rise, you can consider whether the amount that is being proposed is an acceptable figure to you.
If your company has pay scales, and you sit at the lower end of a scale, Buckney says it can be fairly easy to justify moving up. “However, if you sit at the top of the bracket, you may wish to consider asking for a promotion rather than a pay rise. I have used this method several times as I reached the glass ceiling in my roles.”
6. Focus on the facts
Michelle Flynn, a health coach who previously worked in recruitment for 20 years, recommends focusing on the facts during the meeting.
“I use the nonviolent communication method where you state a fact, how you feel, why you feel that way, then make a suggestion,” she explains.
So, a worker could say: “I have been working for the business for 18 months and during that time I have achieved xxx / been promoted and have not had a pay rise [stating a fact]. I feel frustrated / disappointed [stating your feeling] because I love working in the business and really see myself working here for a long time [why this is an important chat] so I would ask that we can review my salary with the aim of me receiving a pay rise in line with my achievements [the suggestion].”
Flynn says: “I have had lots of clients ask for raises using the NVC model; by stating facts people cannot argue with them, and it avoids it becoming emotional.”
7. Don’t be derailed by a one-off bonus
Your employer may offer a bonus rather than a pay rise. They may argue that current inflation rates are temporary, so you only need a one-time bump in your income. But there are two problems with this.
One is that bonuses are normally not pensionable (so your employer gets away without making an additional contribution to your retirement), but also no one knows when inflation will subside. Even if the official rate falls, the price rises that it created will persist.
8. Be prepared for a “no” or “not now”
Your manager may not be able to award you a pay rise immediately or even consider one, so be prepared for a “no” or a “not yet”.
“If this is the response, being prepared for it will mean you maintain professionalism in the meeting and won't get flustered,” says Buckney.
Be gracious, while also putting some practical next steps in place. You could ask when a good time would be for a follow-up review, and for advice on what you need to do to secure a pay rise.
Flynn comments: “Tell your boss you would like to discuss how you can work towards getting a pay rise in the new future, setting SMART goals [specific, measurable, achievable, relevant, and time-bound] so you know what you have to do to get the rise.”
9. Boost your income in other ways
If you can’t agree a pay rise, see if there are ways you can boost your income by reducing how much tax you pay. Does your company offer any salary sacrifice schemes you could use? This could be a season ticket loan, a company car or health insurance.
The most common way to use salary sacrifice is to give up some of your salary in return for your employer making a contribution to your pension plan. It’s not right for everyone though - to find out how it works, read our salary sacrifice article.
10. Consider looking for a new job
If your boss says there will never be a rise - or offers only a measly raise or small bonus - you need to decide whether to stay or search for another job.
Looking for a new role can feel just as daunting as asking for a pay rise, but with plenty of vacancies and a shortage of workers, it’s definitely worth considering right now.
Ruth is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times.
A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service.
Outside of work, she is a mum to two young children, a magistrate and an NHS volunteer.
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