How do you negotiate a raise? Let’s review the different factors that determine the probability of a possible raise.
How much is $2 of your hourly rate?
- If you’re earning $20/hour, that’s 10%.
- But, if you’re charging $10/hour, that’s 20%.
- If you’re charging $4/hour… Well, you get the point.
The average reported annual raise percentages are 4.5% to 5%. It’s possible to get a 10% raise in certain cases while it’s not as common for most positions.
Specific roles – along with entry-level jobs or junior positions that started with lower salaries – can potentially yield a higher raise – but it’s a complex arrangement and depends on the organization or the market.
When was your last promotion?
- If you’ve received a raise within the past 6 months, it would be challenging to ask for another raise right away.
- If you’ve started as an intern or a junior expert who excels at their work, you may give it a shot.
Also, consider your job responsibilities. If recently, you have been assigned a number of different activities at work, this may be a good reason to ask for a raise.
You can’t really assess your own performance, but it’s likely that you can report some extended efficiency in terms of your work arrangements within the past 6 months.
The more productive you are, the more likely it is to get an approval for a raise.
Creative jobs that require analytical thinking and reward based on performance are likely to adjust salaries accordingly. If you’re able to deliver twice what you used to do 9–12 months ago, a 10% – 15% raise is not unheard of.
Type of Organization
How do you negotiate when you work for a large enterprise vs a small organization?
Larger enterprise corporations usually have a salary matrix for different roles across the board. They work with a specific salary range for each position and juggling around that is quite challenging.
You can still negotiate a higher salary but HR and management may refuse. If they really want to retain you, they may think of a different role associated with a higher range.
Smaller organizations are generally more flexible. Their budgets are lower, but efficiency is crucial. So it solely depends on your results, commitment, accomplishments.
Have your day-to-day responsibilities evolved or shifted over the past 6–9 months?
Salary jumps are usually tied to promotions – being assigned to a different role that requires additional commitment. If that’s ahead of you, consider a conversation while discussing those new responsibilities.
Otherwise, compile a list of the additional tasks you’re assigned to on a weekly basis and the success stories that were dependent on you. This would help to negotiate a raise accordingly.
That’s certainly a crucial aspect of your possible salary jump.
Is your salary high, low, or about average as compared to job opportunities in other companies in the area?
Technically speaking, the question is whether you can get the $2 raise (or more) in another organization.
If that’s the case, you can comfortably ask for the raise. After all, a declined offer may result in a resignation later and joining another organization.
Depending on how close you are with your direct managers or the HR, you can discuss that problem with them. Let them know that you have other offers that would cover the $2 jump while you don’t want to leave the company. It’s still a gamble, but if you’re undervalued based on the market cap, you’re in a position to negotiate.
Return on Investment
All of those combined revolve around ROI (Return on Investment).
Consider how much your time is worth.
- Can you get a $2 raise in most companies around you?
- Are there remote organizations that would pay more and give additional benefits for your work style?
- Can you start a venture on your own which would yield the salary plus the raise?
- Can you provide consulting that’s highly paid and cover the difference after hours?
- How dependent is your organization on your skillset? How easily replaceable are you?
- Can you squeeze a lot of extra productivity out of a possible raise? Are you willing to contribute something extra – traveling to events if needed, work after hours or anything else?
The more invaluable you are to an organization (or a great fit for other teams), the easier the negotiation. Otherwise, you may want to invest more in your professional development until you’re willing to have that conversation in a confident manner.