How to Negotiate a Raise: Tactical Advice for a Pay Rise
7 min read

How to Negotiate a Raise: Tactical Advice for a Pay Rise

If you want to increase your salary you need a plan for how you will negotiate your raise. My 11-step strategy will help you get a big pay rise.
How to Negotiate a Raise: Tactical Advice for a Pay Rise

What if you got a $50,000 pay rise?

Imagine what that would mean to your financial future. Think of what you could treat yourself to as a reward. Yes, getting a pay rise can make a big difference to your life.

It’s not just the initial pay bump that matters too. The faster you get your next pay rise and the bigger it is, the more it will compound over time into truly life changing money. The difference to your lifetime career earnings is way higher than just your $50K raise this year.

But over 50% of people don't negotiate for a pay rise.

They either settle for nothing, or just accept what they’re given.

Don’t let fear get in your way. When people do negotiate for a raise the stats show that over 90% of people who negotiated got more than the original offer.

You have the opportunity to take your salary negotiation into your own hands. It just takes some good advice, a sound strategy and an actionable plan. In today’s post I’m going to share tactical advice and my 11-step approach to help you get paid what you’re worth.

1. Understand your worth

Start by learning what the market pays for people in your role and with your level of experience. It’s an important starting point so you can place your current salary against the market pay, and determine how much scope you have to ask for a raise, while still being competitive in the market.

This will also become vital later as a negotiating tactic.

Visit websites like Glassdoor, LinkedIn Salaries and Levels.fyi, or use an industry specific resource. Look up salary estimates for your role at your current company, at your closest competitors and for the industry. Pull some data points and then narrow it down to an estimate of the salary range that aligns to your role and experience.

It’s simple, let’s say your current salary is $100,000 and based on your research the comparison salary range for the market is $125,000 to $175,000 for your role and experience.

2. Determine your request

Next up you’ll need to decide on your target salary range.

This should be the largest reasonable pay bump you think you can make based on your company’s performance, salary bands and standard pay increases.

This will differ dramatically from job to job, between industries and even by country.

A rule of thumb I use for in-demand jobs is 50%, with a 5% margin on either side.

For example, if your current pay is $100,000 and the market band is $125,000 to $175,000 I would be aiming for $150,000 but with a 10% buffer, so $140,000 to $160,000.

This is your starting point.

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3. Flesh out your options

Compensation packages differ more now than even. It is quite typical for total compensation to be made up of all three of the following components:

  1. Base salary
  2. Performance bonus
  3. Equity grants

You need to think about how you want to structure your range. But you don’t want to go in with just one option, make sure you have an alternative ready to offer.

I suggest preparing three options. For example:

  • Plan A: $125,000 base salary, $25,000 performance bonus and $10,000 equity grant
  • Plan B: $110,000 base salary, $25,000 performance bonus and $25,000 equity grant
  • Plan C: $100,000 base salary, $50,000 performance bonus and $10,000 equity grant

Notice all equal the $160,000 upper band.

The options and order will differ based on your personal situation, risk tolerance and preference but should start with your best preference and then hit the target salary using a combination of the other components.

Make sure that you order them from the  most favorable to you, to the most favorable to your company.

4. Find your walk away number

In my example you are targeting a range of $140,000 to $160,000, but you need to prepare for the scenario where the offer you receive falls short of your expectations.

This is where your walk away number comes in.

This is the minimum package you would be willing to accept. If your company will not meet it, you need to be prepared to walk away. This is important, as it is your leverage in the situation, the ability to walk away.

This is a personal decision, as are all the decisions you’ll be making during this process. You’ll need to make it based on what seems fair to you, considering your company’s performance and your personal situation.

Using the example, while you have a target range of $140,000 to $160,000, I think $125,000 is a reasonable walk away number in this situation assuming you are in a high demand role in a good market.

5. Get your timing right

There are two scenarios here:

  • If you are interviewing for a new role, aim for the first interview.
  • If you are negotiating a raise at your current company (as I’ve assumed so far) then make sure you understand your company's planning and budgeting cycle and have the conversation before annual plans are locked down. This is usually 3-6 months before the start of the new financial year.

If your interviewer or manager doesn't bring up the topic of compensation, you should. Plus, you’ll want to know as early as possible if their offer falls far short of your range.

You don't want to waste your time if the ranges aren't close.

6. Try not to make the first move

You have your range and walk away number, but try not to share it.

If a recruiter or manager asks you to share your salary expectations, just play it cool.

In fact, ask for theirs. Here’s how:

  • Start by signaling that you are in it for the right reasons: "I'm open on salary, my priority is ensuring we are aligned and I deliver value."
  • Then pivot to politely asking for the company’s salary range: "But if you have a range you're open to share, I'd be happy to hear it."

In this negotiation it’s always best to go second.

If your recruiter or manager shares their range, you’re in a good spot. You can confirm if it's aligned with your research and expectations and move forward from there.

However, if your recruiter or manager won’t start by sharing a range and insist on hearing your expectations then that’s fine too.

Share your target range from Step 2: "I'm currently being considered for roles in the range of $140,000 to $160,000 but I'm negotiable if this is a great fit."

The negotiation is off and running at this point. Exciting!

7. Let them send you an offer

Next they’ll come back with an offer or counteroffer, depending on how Step 7 went.

When the offer comes in, take a moment to celebrate the win. Receiving an offer is a real achievement and should stop to appreciate your hard work.

Then quickly calculate the difference between the offer you receive and your Plan A. If it’s lower, thank them for the generous offer and say:

"As mentioned, I'm being considered for roles in the range of $140,000 to $160,000, is there any way to make up the difference?"

See what they say.

8. Based on the offer, make your first decision

It’s go/no-go time.

Was the offer good enough? Was it in your range? Did it equal or exceed your Plan A?

  • If so, consider accepting the offer and banking the goodwill for next year.
  • If not, thank them for being flexible and offer up Plan B as an alternative. Start working through the different components of your compensation (salary, bonus and equity) by proposing Plan B. For example: "If we can't budge on base salary to make the difference, would you consider increasing the bonus or equity instead?"

If you’re finished here and achieved Plan A or better, congratulations! If not, a little more work to do.

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9. Renegotiate and make your second decision

It’s go/no-go time again.

If they meet your offer for Plan B, amazing! If not, time for Plan C.

Here’s a sample script: "I understand the constraints around base and bonus. I want to be respectful of your budget, but I'd like to make sure my compensation is aligned with my value and the market."

If you’re finished here and achieved Plan B, congratulations! If not, one more thing to try.

10. Pull out your research

Remember that research all the way back in Step 1? I said it might come in vital later as a negotiating tactic. Well, it’s time.

If you are on to Plan C, it's time to hit them with your research.

Why?

To anchor your salary request to real world data. Try to land this message in three parts:

  • Share the market rates you found in your research.
  • Mention the value you've delivered in previous roles.
  • Show them why the ROI you generate is easily worth it.

It’s finally time to pull out the big guns. Good luck!

11. Finalize the negotiation

Okay, we’re at the end now (of my strategy anyway).

If you have started with Plan A, moved to Plan B and then used your market research to help position Plan C as a reasonable offer, it’s likely that you have exhausted the company’s capacity to make you the offer you want.

It’s up to you now whether you take it or leave it.

Final thoughts

I wish I had this post for my early salary negotiations.

If I had this advice to begin my career then I expect my negotiations would have gone far differently. I am certain that I would have had vastly higher lifetime earnings.

But you have it now, and I hope it helps you as much as it has helped me for my salary negotiations over the last 10-years.

But negotiations are only one part of getting ahead.

To make it in your career you need to be on top of your game. You need all your actions to be as impactful as possible. If you want to find ways to 10x your impact, you should sign up for free and I’ll show you how.

I have interviewed 500+ professionals, surveyed thousands more, and I am always probing for their best tips, tricks and hacks to get ahead. There are five that stand out above the rest and you can get them right now by joining my free email list. You won’t find these ideas anywhere else.