According to independent research, only 39% of people try to negotiate for a higher salary at their place of work. That’s a big problem since, according to the same research, 46% of people consider themselves to be underpaid.
Sound financial planning relies on you maximizing your income and minimizing your outgoings, so making sure you’re getting paid your true worth should be a top priority. That means you’re going to have to learn how to negotiate effectively.
While asking another person for money can be daunting, the truth is that if money makes the world go round, then the act of negotiation is the hand that spins it.
Take a look at these five tips on how to negotiate a higher salary and make sure you’re getting exactly what you’re worth – or more.
Be willing to walk away
Negotiation is made easier when you have options and, on the day of the negotiation, you’ll feel a lot more confident if you already know you have a backup plan. The person with nothing to lose immediately finds themselves in a stronger position, so always be juggling more than one opportunity at any given time.
Normally people ask for a raise only when they receive another job offer, but you can still be willing to walk away even without a new job lined up. If you really think you’re worth what you’re asking for, then maybe you wouldn’t mind quitting this current job to find more fair pay somewhere else.
Few people are willing to walk out on a job since they know how grueling the work-search process can be. But if you can handle it, then it puts you in a stronger position right off the bat.
Make yourself valuable
Here’s an idea – start doing more than you need to. If you’re after a promotion, start doing the extra work anyway, and don’t complain, boast or ask for praise.
Employers notice people who go the extra mile, not least because it’s so rare in the workplace. To an employer, seeing one of their staff picking up responsibility and running with it is like pollen to a bee – they can’t help but notice it.
When you’ve shown that you’re already capable of doing the extra work, and that you’re of such strong character that you don’t even need praise, you will have signalled to all around you that you’re the type of person deserving of a raise – and you won’t even have to ask for it.
Overestimate your abilities (slightly)
As shown in this study by Cornell University, students were asked to score themselves in tests based upon how well they assumed they had done. The researchers then compared each student’s estimation of their own abilities and compared it to how well they had actually done.
The results were discouraging. Those students who rated themselves the highest actually scored the lowest. While those who rated themselves poorly scored the highest.
This has since become known as the Dunning-Kruger effect and it’s something you need to be aware of before you hit the negotiating table.
Ultimately, you may not be the best judge of your own abilities. But if you’ve followed the previous two steps on this list, then you’re already in a strong position and can afford to aim high.
In terms of salary, try adding 25% on to whatever your original estimation was. More often than not you may find out that you’re worth more than you think.
Don’t explain yourself
You have nothing to explain. When you’re at the negotiating table you are making up one half of a business transaction. Don’t apologize for asking for a raise, and don’t attempt to explain yourself either.
If your boss is at all competent they won’t have time for that stuff anyway, they’ll be too focused on securing the contract of the employee they have in front of them.
Remember that you’re not just asking for money, you’re offering your skills in return for fair compensation. This kind of negotiation happens every day at a personal level as well as a business level, so embrace the concept of deal-making and never feel the need to explain away your motives.
Aim for the stars
…So that if you fall, you’ll land on a cloud. Seriously – aim as high as you can, or higher. That way, if you fail to reach your target you might still end up further along than you previously envisaged.
That might mean aiming for a higher salary, but it could also mean aiming for a higher position at your current workplace, or aiming for a better job elsewhere.
In negotiations, it’s expected that each party starts off with higher demands than they’re willing to accept, so play hard, aim high, and get that raise you’ve been looking for.