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How to Negotiate a Raise

By
Ashley Altus, CFC
Ashley Altus is a personal finance writer who covered financial planning with a focus on money management and household finance for OppU. She is a Certified Financial Counselor through the National Association of Credit Counselors. Her work has appeared with O, the Oprah Magazine; Cosmopolitan Magazine; The Smart Wallet; and Float.Today.
Read time: 7 min
Updated on August 11, 2022
young business woman showing how to negotiate a raise
When you’re negotiating for a raise, it can seem that the number is most important. But negotiating a compensation package, instead of just a salary bump can actually make for a more successful result.

Salary negotiation is often painted as a battle. One side wants to earn more, and the other side wants to pay less.

“When you think of negotiation as a fight, it becomes the filter you interpret your counterpart’s behavior, that they’re the enemy,” says Margaret Neale, Ph.D., the Adams Distinguished Professor of Management, Emerita at Stanford Graduate School of Business.

Getting ready to negotiate your raise

As you put on your battle armor, so does your manager, which can make the negotiating table feel uncomfortable. In a 2020 survey from staffing agency Robert Half, 18% of employees didn’t negotiate their current salary because of this reason and took the first offer their employer gave them.

Women in particular are afraid to be seen as greedy or demanding in negotiation and were more uncomfortable than men when negotiating a raise. One survey found that 66% of women felt discomfort during these conversations.

“Women often don’t want to seem like they’re being too pushy or loud,” says Benjamin Artz, Ph.D., an associate professor of economics at the University of Wisconsin-Oshkosh.

Instead of looking at the negotiation process as a conflict that makes you uncomfortable, Neale advises to frame it as collaborative-problem solving.

“It’s hard to think you’re being greedy if you’re trying to solve a problem that your employer has,” Neale says.

Compensation negotiation tips

Changing your perspective when negotiating a pay raise is just one part of a compensation package. Use these tips to help negotiate the pay you want.

Don’t focus only on salary

Most people want to earn more money, but it can be hard to explain to your boss that giving you a raise helps them. For that reason, Neale recommends putting together a package, which can include advantages such as additional resources, a title change or working from home accommodations, that can demonstrate your solution to one of your employer’s problems.

Negotiating should be focused on persuading your manager to adopt a solution that makes you better off.

For example, let’s say you have an idea for a new initiative that can increase your team’s productivity with minimum resource requirements. Taking the lead on this project would increase your workload, which could justify a title change and salary bump.

“By negotiating a package, it can help you craft a request that reflects the unique contributions you bring to the table and your value,” Neale says. “You need to be negotiating at least two issues, and I suggest you’d want to think about more than two.”

Salary is scorable, but it’s just one part of compensation. The next opportunity you have for a potential promotion, brainstorm what resources would help you do your job better.

Your package should demonstrate how you can fix existing problems and how it can justify a change in your salary and possibly a new job title and job description.

Have a fitting reason for your ask

To negotiate a successful raise, you’ll need to have a basis of why you’re asking for a salary bump and why your job needs more resources.

4 Acceptable reasons to ask for a raise in your salary

  1. You’re doing a lot more.

Have you accepted more responsibility? Or has the job become bigger and more valuable to your company than when you first started?

  1. You’re not paid fairly.

While varying across industries, occupation, education-level, and location, the racial and gender wage gaps are shrinking, but continue to persist.

Finding out co-workers with your same exact job receive a very different compensation package and have the same years of experience as you can raise the issue to make compensation equivalent across individuals performing at the same level, Neale says.

  1. It’s review time.

An annual performance review is a natural time to bring up the conversation about your compensation package.

“The best time to negotiate benefits at your current job is to wait for the right time, such as an annual review or performance check-in,” says Michelle Armer, chief people officer of CareerBuilder. “This is when you would normally discuss everything you have contributed to the company and will better your chances for getting those extra vacation days.”

  1. You just received a job offer.

Before accepting a job offer is an ideal time to discuss salary, perks, and vacation time with your hiring manager. Once you begin your new job, you’ll probably be locked into the agreed upon starting salary for some time before you can discuss a raise.

“It’s easiest to negotiate non-wage benefits such as paid time off during the job offer period before you sign your offer letter,” Armer says. “Since the company has decided they want to hire you, they are more than likely to work with you on accommodating your benefit needs.

When you receive a job offer, research the market rate and salary range for the position on sites such as Salary.com, Glassdoor, and LinkedIn to help guide your counter offer.

Make sure to consider your manager when preparing

When we want more money, we often focus too much on ourselves and ignore one of the most important factors of negotiation, the person who has to say yes to our request.

“It’s an interdependent process, so you need to be able to answer, why would they say ‘yes’ to this proposal?” Neale says. “Why would they pay you more for your performance?”

If you can’t justify answers to these questions, consider the perspective of your counterpart in the negotiation a bit more.

Forcing your manager to give you a raise, or else, probably won’t give you the results you’re looking for.

Threatening your boss to leave is usually not the best negotiation tactic, as it may not work out the way you’d like and could backfire, Neale says.

“You put them in a situation that is indefensible if they agree with a threat,” Neale says. “You just opened the door for your colleagues to threaten the manager for more resources and essentially hold the manager hostage, and they can’t allow for that to happen.”

Find an advocate to back up your statements

Men and women ask for raises at statistically equivalent rates, but men were awarded raises 20% of the time while women were awarded raises 15% of the time, according to research Artz has conducted.

“It doesn’t sound like a lot, but when you compound that over an entire career, that gap can create a large chasm,” Artz says.

One reason the gap exists is because men and women look at themselves and their abilities differently.

According to his research, women are less likely to promote her accomplishments, talents and skills than men. Men will usually portray their value and worth accurately or overestimate it during negotiation.

“The whole point of a negotiation is to portray your worth and value to the company, so if women underestimate this in comparison to men, they’ll get a lower raise, or maybe not even a raise at all,” Artz says.

When a woman has an advocate for herself, someone to endorse her, it reduces the gap and eliminates the underestimation of her talents, Artz says.

“If a worker herself is negotiating for a raise or a promotion, she’s likely to get a worse result than if she has an advocate negotiating on her behalf,” Artz says.

What if your boss says no after trying to negotiate?

So, you’ve tried to problem-solve and negotiate a better compensation package with your manager, but they reject your request. Now what?

If your request for a raise is denied, ask your boss what about your proposal and explanation led to the no and if you have a specific criterion or goal you didn’t meet. Plan to schedule a follow-up.

“You can’t put your tail between your legs and slink out of the room,” Neale says. “If your manager tells you that you have a certain deficit, let them know that you plan to open this conversation again once you have met these goals.”

Article contributors
Benjamin Artz, Ph.D. is the John E. Kerrigan Associate Professor of Economics at the University of Wisconsin – Oshkosh. His current research focuses on various topics in industrial relations and in particular on studies of subjective well-being and gender gaps in labor market outcomes.
Michelle Armer is the chief people officer at CareerBuilder where she leads the human resources team with a focus on building a high performance culture that supports business goals, employees’ professional development, and diversity.
Margaret A. Neale is the Adams Distinguished Professor, Emerita, at the Graduate School of Business at Stanford University. She was honored with the Distinguished Educator Award from the Academy of Management in 2019, the Robert T. Davis Award for Lifetime Achievement, and the Stanford Graduate School of Business Award for Contributions to Executive Education. She has served as the Academic Associate Dean of the Stanford Graduate School of Business.

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