5 ways to negotiate a pay raise, according to business leaders
Getting a pay raise is easier said than done. Few of us have the confidence to walk into the boss's office and ask for a salary increase, and few managers will welcome that kind of demand coming out of the blue. So, what's the best way to negotiate a pay raise? Five business leaders give us their top tips.
1. Increase your sphere of influence
Nigel Richardson, SVP & CIO Europe at PepsiCo, says the best way to negotiate a pay raise is straightforward: Just do a fantastic job. "Someone gave this advice to me early in my career, which I've always thought was great: Whatever job you're doing, just be the absolute best you can be at that job. Because if you do, people notice."
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Richardson says that successful negotiators concentrate on increasing their sphere of influence. "If you are growing the scope of your role because you're having a bigger impact, then it's much easier for someone to have a look and say, 'That is now a bigger job. It comes with a bigger salary.' If you're just saying, 'Hey, look I want a pay increase,' it doesn't necessarily work well."
Richardson says a good way to increase your sphere of influence is to take on a new role in a fresh area of the business.
"Find a way to expand your scope. I've always thought that, rather than trying to just get a pay rise in your current job, you're better off trying to find a bigger and different job within the same company," he says. "Of course, you can progress completely vertically in one narrow track, but I think it's healthier if you can find a way to move around. At PepsiCo, we have lots of different career paths that people can take."
2. Make your pay raise a palatable proposition
Bev White, CEO at recruiter Harvey Nash, says anyone looking to get a pay raise should think about providing an answer to several important questions: "What extra things are you doing? What more can you bring? What additional value can you generate?"
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White says that people who only focus on getting a pay raise could return empty-handed. "If you're not looking for a promotion, but you're just looking for more money, the question I would ask is, 'Why is that justified?'"
She advises professionals to provide evidence that will help their manager see how a pay raise is a palatable proposition.
"Do your homework and find your data. Prove that other people in your industry, in this geography, and that do a similar job to you, are getting paid in this pay range," says White. "Say to your boss, 'I love this company. I am absolutely committed. This is not me telling you that I don't want to be here. But I thought you'd want to know my research has made me wonder whether I'm getting paid what I should be being paid.'"
3. Demonstrate your personal contribution
Ben Elms, chief revenue officer at Expereo, says the best way to negotiate a pay raise is to show the benefits you bring to the business.
"Demonstrate your unique contribution," he says. "Show how you've led people. Demonstrate how the value drivers of the business have been clearly impacted by the personal contribution you've made."
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Elms says that the individual impact you highlight should be backed up with quantitative facts.
"I've focused on always making my team reflect -- and when we show investors top-line revenue growth, new customers, and how we're transforming the business from a technology perspective, it shows we've become very valuable assets as individuals."
While demonstrating your personal value is critical to successful salary negotiations, Elms also gives a warning to professionals who are looking for an increase.
"Never ever blackmail someone into saying that you need a pay rise, where you say, 'I'm going to leave,'" he says. "When people try that trick, I say, 'Good luck, I really wish you well,' and they're surprised. Trust me, it's not the way to play the game."
4. Understand your boss's motivations
Caroline Carruthers, CEO at consultant Carruthers and Jackson, says one way to negotiate a pay raise is to put yourself in your manager's shoes.
"Try to understand what your boss is interested in," she says. "What's their motivation? What interests and excites them?"
Carruthers says it's important to match an understanding of your boss's priorities with your personal ambitions. Don't be shy in coming forward.
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"If you've got targets, try and put in stretch targets with an initial agreement," she says. "Suggest that if you hit a target -- which you would describe as being feasible, but hard -- then you could have a conversation about a pay rise."
Like other business leaders, Carruthers says it's crucial to justify your potential salary increase.
"There has to be a reason for a pay rise," she says. "Maybe your job has changed, or your effort has changed, or your output has changed? Saying the cost of living has gone up and you need to be paid more is unlikely to cut it because, in business, your bosses are dealing with cost-of-living issues across the whole piece."
5. Find a balance between two extremes
Craig Donald, CIO at The Football Association, says it's vital to demonstrate your value -- and, like other business leaders, he says there's a right way to negotiate a pay raise and a wrong way.
"One way is to go and get another job and to come back in with the written offer and present that and see if that bumps up your internal salary," he says. "That's not the best way to do it. If somebody does that to me, my default response is negative because I don't particularly like being held to ransom."
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Donald suggests an alternative approach to salary negotiations focused on value that should lead to broader recognition across the business.
"I think the best way to do it is to constantly demonstrate value throughout your time with the organization. Of course, that is challenging because you don't want to be continually sitting there saying, 'Aren't I great and look at what I've done,'" he says.
"Success is about finding ways to show your value with sensitivity and empathy, and to find a balance between flying under the radar as you get your job done and making sure you're popping up every so often to say, 'Didn't I do a great job?' You need to find the right balance between those two extremes."