Negotiating a raise can be one of the most important aspects of a person's career, as it helps ensure payment by job duties, cost of living increases and expense requirements. However, before negotiating a raise, it's important to understand how much of a raise is appropriate to ask for.
In this article, you will learn why it's important to know how much of a raise to request, common situations that would warrant asking for a raise, and tips on negotiating for a raise once you've determined the amount to request.
Why it's important to know how much of a raise to ask for
Before you can ask for a raise, you must first know how much of a raise to request for the following reasons:
It can give you confidence when negotiating
Knowing the amount you will be asking for can equip you with confidence when negotiating with your supervisor or another manager. Many people experience anxiety when talking about money with their managers, so being prepared with a particular number and standing behind it can help ease any stress or tension related to the negotiation process.
It shows that you have taken the time to do your research
Being prepared for the negotiation meeting with your research can help your manager see you as professional and emphasize that you take your job and the negotiation seriously. Your research should include a look into current salary trends for people in your area with similar positions, qualifications and responsibilities.
It ensures that you are realistic when negotiating a pay increase
If you go into a raise negotiation asking for too much, you may end up coming across as naive or even arrogant and being denied a raise at all. On the other hand, if you ask for a raise that is too little, you may find yourself settling for a salary that is less than what you deserve.
Common situations that warrant requesting a raise
The following are the most common situations in which an employee would ask for a raise, as well as how to decide how much of a raise to ask for in each situation:
- When negotiating a salary for a new job
- When asking for a raise in your current position
- When changing careers
- When negotiating a salary increase as a result of a promotion
When negotiating a salary for a new job
If you are negotiating the salary for a new position or a job at a new company, asking for 10% to 20% more than what you currently make is often the general rule. However, before simply determining 10% to 20% more than what you make now and asking for that, take some time to factor in the costs of living, expense requirements, inflation, the benefits package being offered and other things that can directly impact your take-home pay.
For example, if you are asking for $10,000 more than you currently make but will be relocated to a city that is far more expensive than where you currently live, the extra $10,000 will likely end up being equal to or even less than your current salary after your living expenses are paid. And, if you are required to pay most or all of your health and dental insurance benefits with little to no help from the employer, this could also greatly decrease your overall take-home pay.
What's more, if you are accepting a job offer that entails much higher levels of leadership or responsibility than your current position, 10% or 20% more than your current salary may be insufficient compared to the market rates for people in your new position. So, although asking for this amount may sound reasonable, it's important to take into account the other factors that contribute to your income when making even a small career change.
When asking for a raise in your current position
When asking for a raise in your current position, it is typically acceptable to ask for up to 10% more than what you are making now. However, it's important to ensure that you go to the meeting equipped with examples of when you excelled within your position and how you have added to your company's overall successes. This will ensure that your manager takes you seriously when you ask for a raise, as well as give them ample evidence to present to their higher-ups on behalf of you.
Additionally, you should spend time researching what people in a similar position in your geographical location make. For example, if you currently make $40,000 but others in your city in a similar job make $57,000, you may want to consider addressing this with your manager and asking for more than a 10% raise to accommodate for the discrepancies in your salary compared to others in your field. If this is the case, be sure to bring your research with you to the meeting and have specific numbers ready for review by your manager.
When changing careers
When you are making a change from one career to a completely different career, asking for a salary that is above your current salary can be tricky. This is because you will likely be entering a new career with less experience than what you had in your old position. Therefore, the most important thing you can do when negotiating a salary is to come prepared with research related to the current salary trends. This research should include the following:
- Salary ranges for individuals in a similar position in your location
- Salary ranges for individuals who work at companies in the same or similar industry
- Salary ranges for individuals who work at companies of the same size as the one you plan to work for
You should also account for your skills and experience when negotiating the salary for a new career position. A good way to put a number on your skills and experience is to find job listings that ask for qualifications that closely match yours, and then research the associated pay range for that position in your area. You can use Indeed's job search to input specific skills, experience and other qualifications you have to find matches.
Additionally, you should also take into consideration the factors mentioned earlier that can directly affect your income. If you are taking a position in a more expensive location, the added living expenses should be factored into the salary you ask for. Additionally, if your work will require excess expenses such as out-of-pocket insurance premiums or a long commute, this should also be discussed during salary negotiations.
When negotiating a salary increase as a result of a promotion
If you have been promoted to a new position within your company, this is a great time to secure a raise. To ensure that you come prepared to the salary discussion, get familiar with the typical salary others are making in similar positions both within your company and on a national average. Depending on the type of promotion you have received, you can ask for a small or large raise as it relates to your situation. The raise you ask for should be directly related to the new responsibilities you will be taking on.
Tips for negotiating a pay raise
The following are tips you can use when negotiating a pay raise:
Do your research
Being prepared with current salary trends in the position you are in or applying for can equip you with research-backed information when negotiating a raise.
Come prepared with your accomplishments
When asking for a raise, it's important to have a list of your accomplishments and other contributions to your company. This gives your manager a reason to submit a request for a raise for you and shows that you are committed to excelling within your position.
Negotiate other benefits
If you don't get the salary raise you wanted, you should also consider negotiating benefits and other perks in place of salary. For example, flexible work hours or stock options could also be something to consider instead of a raise.