Four Strategies For Negotiating Value-Based Compensation

New year, new pay bump?

Experts say that the best time to ask for a raise is when you’ve earned one (i.e., your role/responsibilities have changed, your work has resulted in a notable impact, etc). However, January is usually when a new fiscal year starts. It also often directly follows annual performance appraisals (usually completed in December). After a positive performance review and/or after your organization’s budget has been allocated, is as good a time as any to ask for a wage increase. 

If you’ve decided that is what you’ll do, great! Per Emily Epstein, who teaches a negotiation skills course at Harvard Division of Continuing Education, many recruiters start with a low offer precisely because they expect you to negotiate. 

Negotiating is scary, and rightfully so. Research finds that not only are women less inclined to negotiate compensation than men, but they are also more likely to be penalized when they do. 

However, if you are a woman, particularly a woman of color, you may not have a choice. It is imperative that you speak up for yourself. The gender wage gap is real! Women, on average, make 83 cents to the male dollar. For Black and Latina women, that number is even lower (59 cents and 54 cents, respectively). 

Fortunately,  there is a correct way to negotiate. In addition to courage and getting the timing right, negotiation also requires preparation. Here are some best strategies:

Being a high performer does not automatically guarantee you a raise, but it helps tremendously. That is because herein lies the “why”: “Why should we give you a raise?”

Your answer should encompass two areas: the contributions you’ve already made to the business, and the ones you plan to make in the future. This is your value. 

Make a list of solutions you have delivered while at the company. What tasks have you achieved? What are some instances in which you’ve gone above and beyond? Is there any available data/metrics that reflect the impact of your contributions? Cite it. 

Then, take some time to reflect. How do your specific goals align with the organization’s? What is your vision for the future? What are some ideas you have? What projects/responsibilities do you plan to take on?  Be actionable, be specific. An organization is more willing to invest in you if it knows you are committed to its growth. 

I’ve written before about why personal circumstances don’t make a strong case for a promotion. The same principle applies for a raise: 

• Do not bring up other employees (“Jane got a raise, so I should too”) or throw someone under the bus (“I should get a raise because I work harder than Jane”). 
• Do not rely solely on seniority. Your time at the company does not matter if it wasn’t used wisely. Focus on the value of your tenure, rather than the length of it. 
• Make your “why” about workplace milestones instead of personal reasons. So, you had a baby, or your rent increased, or you bought a home. Surely a raise would come in handy, but a company’s responsibility is to prioritize the needs of the business, not those of a single individual. Let your contributions speak for themselves. 

The numbers, as they say, don’t lie. Use them to back up your request. Platforms like Glassdoor, Monster, and Indeed have salary calculators that can help you find the competitive market rate for your specific role. Make sure to also consider your industry, location, experience level, and company-size to get the most accurate number. 

This is important as research indicates you should ask for a clear and specific number, or percentage, rather than say a range, when negotiating compensation. And remember, your organization may rebut with a counteroffer, so you may want to consider increasing that number. 

Salary talk, just like any other difficult work conversation, should be had in person. Schedule the meeting in advance and practice your pitch beforehand! 

However, once the conversation is had, it should ALWAYS be followed up in writing. Draft a formal email reiterating your request, including the specific number, your values-based “whys”, and relevant industry standards. Ensure to summarize key points and clearly outline any “next steps” agreed on. 

Finally, remember that a “no” is always a possible outcome. If that happens, use the feedback to help inform and guide your next steps.

Good luck!