If you are currently employed and you are considering asking for a raise, you are not off the hook here. You definitely have to be prepared for this conversation as well. In this case, being prepared means being ready to take on some more responsibility and up your game in the workplace. It’s much easier to ask for a raise if you have been working to deserve it ahead of time. Additionally, when asking for a pay bump, be realistic – both about your performance and the increase you are seeking. If you have only been in your job for a month, or if you have been slacking off, it is probably not going to happen. The same goes if you are ask for a 50% pay increase in hopes of negotiating to 25%. There is nothing that will bring the conversation to a stop like an outlandish request, so think this through ahead of time, demonstrate your skills and build a list of your accomplishments. It will pay off when you have the conversation.
What else should people know?
There are three other important tips that listeners need to keep in mind:
1) Remember that it isn’t all about the money. This is true both for new salary negotiations and for those who are currently employed. Outside of your salary, there are other means of compensation. For example, your benefits package! If the company cannot pay you more, can they increase other perks? For example, will your company cover your gym membership? Your transportation costs? Increase their match for your 401K? These are all very much up for negotiation.
2) In terms of negotiating tactics, don’t shut down at ‘no.’ Be patient and provide alternative suggestions, like those items I just mentioned. Ask for increased training or professional development opportunities to help you build your skill base – and therefore, your value to the company – if they are particularly stubborn. Overall, it is important to remember this is a conversation, so don’t depart at the first sign of rejection.
3) You have to have a limit. If you are offered a job, but the compensation is too low and they won’t budge, you have to know when to walk away. There are certainly other jobs out there that will pay you for your skills. The same is true for a current job. If you have worked there for years without a raise, and there isn’t one in sight, it is probably time to start looking for a new job. This is another reason you have to know what you are worth: You have to know when to walk away.
Remember, you can’t get what you don’t ask for!
Mellody is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News and CBS.com.