You want a raise. Your company adores you. Should be a slam dunk, right? Well, as with most things financial, it’s ultimately more complicated. We asked Celia Balson, former HR executive and founder and CEO of Work Friendly, for the things she wishes employees understood about compensation conversations. Here are three tips that just might get you to that dream offer.
3 Things Everyone Gets Wrong When Negotiating Salary, According to an HR Exec
1. They Don’t Understand Their Company’s Raise Cycles and Comp Bands
A company’s compensation philosophy is a formal outline of the reasoning behind their pay structure in order to create consistency and fairness, Balson explains. Most HR departments have this info at the ready—it could include everything from how often salaries are evaluated to whether or not individual roles have compensation bands. For instance, maybe your company sticks to annual raises that accompany an annual review (and maybe those conversations always happen in February). Alternately, maybe they review comp quarterly, especially as it pertains to quarterly goals and bonuses. As for comp bands, this refers to compensation ranges by role and level, which an organization tries to keep consistent. (For example, all marketing assistants make between $52,000 and $72,000.) Bottom line: Knowing this info will help you understand when you’re entitled to conversations and what’s a reasonable amount to ask for.
2. They Assume They’re Being Cheated Out of an Increase
Balson maintains that most companies deliver on a cost-of-living increase. But if you aren’t offered more than that, don’t assume it’s because you a) did something wrong or b) work for a bunch of jerks. “Make an effort to understand the internal comp calendar and stay up to speed on company performance,” she says. “Each company has a different financial situation and most often an employer will have a budget allotted for annual increases that are then divided up by department.” So let’s say you know your company had a terrific Q2—early Q3 could be a good time to negotiate upward. Alternately, if you know the last quarter was not so good, you may want to wait to go to the table. Additionally, remember that many companies don’t even know their year-end profits until well into the following year—so you may need to give them some time before negotiating a salary jump or bonus.
3. They Don’t Get That Bonus in Writing
Remember: What’s super-important to you could be easily forgotten by your boss. As such, “bonuses, even when shared as an idea based on profits, need to be in writing with some sort of range provided,” Balson says. “For example, ‘If this company hits X in profits, you will receive a bonus of Y percent.’” Bottom line: Make your case, then get your manager to write it down, then float it back up when the time is right.