Too many candidates believe the only way to get a decent pay rise is to secure an offer elsewhere and then use it to negotiate with their current employer. It may work, but it also often has unintended, negative, consequences a few of which are outlined below (see “In brief: why you should never accept a counter-offer”). So, before you metaphorically put a gun to your employer’s head, here is an alternative approach to renegotiating your salary.
In brief: why you should never accept a counter-offer
The two principal unintended consequences of accepting a counter-offer are: 1) it often damages your relationship with your employer and current colleagues; and 2) it burns bridges both with the recruitment consultant who put their time and reputation into promoting you to their clients, and with the client who made you the offer. 90% of employees who accept a counter offer leave within 12 months anyway, so for more details about why accepting one is very often a bad idea visit: https://www.arresourcing.com/recruitment-blog/why-you-should-never-accept-a-counter-offer/
Plan ahead to trigger rises
Planning ahead puts you in the strongest possible position to secure pay rises and promotions. During your annual performance review ensure you agree clear goals and stretch targets with your company that will trigger your next pay rise and / or promotion once you achieve them. As well as focusing your energy it will ensure you will be in the driving seat once your next review comes around.
A key benefit of establishing targets to trigger a pay rise or promotion is that the company is acknowledging that once you achieve those targets you have the experience and core competencies that merit that salary.
This is important as, although we would all like more money, progressing to the next level without having a strong underlying skill base can be counter-productive. Pay rises are awarded not for the 90% of the time the job goes well, but for your ability to manage the role the 10% of the time when it goes wrong. Without experience to fall back on some people find they are not able to manage challenging situations in line with their salary and grade. This can knock the individual’s confidence, potentially force them to change jobs or put their role at risk if they are perceived to be overpaid for their ability. The damage to a career can be hard to shake off.
Negotiating a fair value
If you suspect that you are underpaid versus the market and/or you feel you are ready to take on greater expectations and responsibility then do some research. The two principal places to start are salary guides (often on industry publication or recruiter websites) and industry specialist headhunters. While the bandings in salary surveys can be quite broad, a good recruitment consultant should be able to advise based on the specifics of your experience and take into account benefits beyond basic salary giving you a more accurate figure.
Armed with a good understanding of your value help your line manager see the merit in your request by showing the impact you have made to the business and, if relevant, how your circumstances have changed e.g. increased commuter costs, childcare costs etc. Focus on the value you add, extra responsibility you have taken on, positive performance feedback etc but remember there needs to be a balance between what you're worth and what the employer can afford.
Having made your case don't be first to share a number. Instead, when your employer makes an offer keep your emotions in check and ask for time to consider it. When evaluating whether you think it is a fair offer don’t under-estimate the value of non-salary elements of the package as, while they may not be evident in your bank account every month, they can make a big difference to your standard of living.
If you would like further details about any of the trends or would like to speak with us about how we can support you then please email me: email@example.com or call 0330 174 6801.