Wednesday 12 June 2013

How to Negotiate a Pay Rise in your current job

Are you under-paid? MP’s are (according to them) with 7 out of 10 believing that the back-benchers annual salary of £65,738 is too low.

On average, MP’s believe they deserve salaries of £86,250 — a 32 per cent rise, as reported in a survey by the Independent Parliamentary Standards Authority (Ipsa).

The Ipsa survey also revealed that 1 in 5 MP’s thought they deserved at least £95,000 a year and more than a third thought they should keep generous final salary pensions.

In their quest for higher pay, I can’t see MP’s receiving much support from fellow civil servants who have had their pay frozen, or the general public who still haven’t forgiven MP’s for the expenses scandal. The recent ‘cash for questions’ probe is further embarrassment for MP’s and further diminishes MP’s standing with the tax paying public who fund their current salaries and expenses.

It seems MP’s are not alone in believing they are under-paid. A large proportion of UK workers are unsatisfied with their pay, but many of them refuse to ask their bosses for a pay rise.

MP’s brazen call for a pay rise seems ham-fisted and ill timed, but how can the rest of us learn from their mistakes and succeed in Negotiating a Pay Rise? 

Reasons for employees Not asking for a pay rise include; Asking for a pay rise is humiliating or embarrassing; It wouldn’t be appropriate in the current economic climate (Boss: “you’re lucky to have a job”); Or they don’t want to be perceived as ungrateful or a trouble-maker.

As a recruiter, you might think I am all for folk changing jobs every year or two, but that’s not true. If a Food Industry business (my sector) comes to me for assistance and we help them recruit an employee, we want that employee to stay and grow with the company. If the employee leaves after 6 or 12 months, the employer might not see the recruitment fee as value for money and might be reluctant to use our service again. However, if the employee stays with the business for 3 or 4 years there’s a strong likelihood the employer will use us again when they are next looking to recruit.

It’s quite alarming that a high number of employees would rather jump ship every couple of years in order to increase their pay. Surely this is bad for both the Employee (job-hopper, burnt bridges etc) and the Employer, who bears the cost of recruiting and training a new employee, not to mention the reduction in productivity as the new employee gets ‘up to speed’.

When negotiating a pay rise we inform candidates that the onus is on them to be focused and assertive, as they may only get one shot at it in a 12 month period.

We have found that what is required to maximise the opportunities of salary negotiations being a success is, information, information and more information. This includes: the motivations of the employee, the market rates paid for this type of role by other similar businesses in the area, the culture of the business, the expectations the employer places on the employee, the career progression available, the scarcity of the skills possessed by the employee, the employers pay policies, the financial health and prospects for the business, and a number of other factors both generic and unique to each salary negotiation.

Workplaces are more transparent than they were 20 years ago, so gaining the required information necessary to negotiate salary is less difficult than it once was. When all the facts and information is out in the open and readily available to both parties, it is much more likely that the Employee and Employer will agree a realistic pay rise without damaging relations or losing goodwill.

When Negotiating a pay rise, we advise the following:

1.) Be frank with your Manager. It's acceptable to ask about the company's pay philosophy and pay practices. Line Managers should be able to explain why they pay the way they do. Use this information wisely, you don’t want to ask for too much…or too little.

2.) Practice what you want to say. Don’t be afraid of going into a pay review meeting with notes you can refer to. How do you think the bosses will respond to your pay rise request? Counter any objections with a rational and persuasive argument, backed up with facts and figures. Be assertive but Don’t demand a pay rise (no employer likes being held to ransom).

3.) Keep calm and play the long game. Keep a clear head, keep the positive dialogue flowing. If your pay rise request is met with an unfavourable response, don’t show any anger, and don’t threaten to leave. Be patient, as the company might need to get back to you. Keep your manager onside as although he/she might not make the final decision, they will have a big influence in what the final decision will be.

4.) Choose the right moment. If you're asking for a pay rise, do it after successfully delivering something tangible for the company. This could be a project delivered or some other quantifiable achievement (especially those where the monetary value to the company can be determined).

5.) Understand the company’s unique circumstances. For example, If the company has announced significant new business, are recruiting new staff or have just had a record quarter – This may be the perfect time to ask for the pay rise. Conversely, Don't ask for a pay rise if the company has just made redundancies or posted poor financial results.

What tactics have you used to Negotiate a pay rise?