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What is a Salary Hike? How to Negotiate for a Better Pay with Your Manager?
Salary negotiations can be difficult but they are essential to professional development and financial stability. There are strategies you can use to increase your chances of getting a salary hike at your current job or negotiating a salary for a new position. According to a new Willis Towers Watson study, employers in the U.S. plan to raise wages by an average of 4.6% in 2023, up from 4.2% last year. This blog offers tips and best practices for navigating the salary negotiation process, preparing and making your request, and following up.
What is a Salary Hike?
A salary hike is an increase in an employee’s pay or wages. This raise can be given for a variety of reasons, including retaining valuable employees, rewarding exceptional performance, or keeping up with the cost of living. The amount of the raise can be either fixed or a percentage increase, and it differs depending on the industry, job role, level of experience, and company budget. Salary hikes can be given annually or at other intervals by employers, and they may be accompanied by other benefits such as bonuses, stock options, or increased vacation time. A salary hike can also have an impact on an employee’s future earning potential because it raises the base salary from which future raises and bonuses are calculated. They are an essential tool for employers to use in attracting and retaining talented employees, as well as keeping the workforce motivated.
How to Ask for a Salary Hike in Your Current Job
Asking for a salary hike can be a difficult conversation to have but it is an important part of career development and financial stability. Here are some steps to take when requesting a raise at your current job:
Do Your Research
Before requesting a raise, research the market rate for your job role and level of experience. This will give you a reasonable estimate of what you should earn based on industry standards.
Prepare Your Case
Make a list of your achievements and contributions to the organization. Be specific and highlight your accomplishments, such as a meeting or exceeding goals, taking on additional responsibilities, or improving processes.
Set up a Meeting
Request a meeting with your manager to discuss your salary. This demonstrates your seriousness about your request and allows your manager time to prepare for the same.
State Your Case
Make your case for a raise during the meeting. Use your research and achievements to back up your request. Be assertive but respectful, and avoid making demands or issuing ultimatums.
Be Open to Negotiation
Your manager may be unable to provide you with the exact salary increase you seek. Still, they may be able to offer other benefits such as increased vacation time or a performance bonus. Be open to compromise and consider all options.
If your manager needs time to consider your request, inquire when you can follow up. If you receive a raise, express your appreciation and continue to work hard to justify the raise.
ALSO READ: 5 Top Career Mistakes That Can Slow Down Professional Growth
How to Negotiate a Salary Hike in a New Job
Here are some pointers for negotiating a salary hike at a new job:
- Investigate the market rate for your job role and experience level
- Determine the salary range you desire
- Wait for the first offer from the employer
- Based on your research and experience, make your case for a higher salary
- Be willing to negotiate and think about other benefits
- Take into account the entire package, including benefits and perks
- Once an agreement has been reached, confirm the details in writing and express your appreciation
How to Write a Letter to Your Manager Requesting a Salary Hike (Downloadable)
- Begin with a formal greeting and express gratitude for the opportunity to discuss your compensation
- Declare the purpose of the letter—that you are requesting a salary increase—and include a specific amount or percentage
- Emphasize your experience, accomplishments, and contributions to the company
- Recognize any budgetary constraints or other factors that may influence your decision
- Sign off with a polite and professional signature, and follow up with your manager to discuss their response
You can use our downloadable template to learn how to write a professional letter asking for a salary hike.
I wanted to follow up on our recent discussion about my compensation. As we discussed, I have been with the company for [length of time] and have consistently exceeded expectations in my role. In the last year, I have taken on additional responsibilities and delivered [specific accomplishments] that have contributed to the company’s success.
I appreciate the opportunity to speak with you one-on-one about my salary. Based on my research and industry experience, my current salary is below the market rate for someone in my role and level of experience. I would like to request a salary increase of [insert specific amount or percentage] based on my performance and contributions to the company.
I understand that the company’s budget may play a role in determining my compensation, and I am willing to discuss alternative benefits or incentives that could be offered in lieu of a salary hike. However, based on my contributions and experience, I believe a salary increase is justified.
I am dedicated to the company’s success and eager to continue contributing to our common objectives. Thank you for taking the time to read my request.
ALSO READ: 7 Effective Tips to Negotiate a Higher Salary with Your Employer
How to do the Research to Know How Much of a Hike to Ask for
- Determine the market rate for your job: Investigate salary surveys and reports to learn what other companies are paying for similar positions in your industry and location
- Consider your experience: Consider your years of experience as well as any specialized skills or certifications that may be in demand
- Assess your performance: Consider your recent accomplishments and contributions to the company and how they have added value
- Decide on a specific amount or percentage: Determine a specific salary increase that you believe is fair and reasonable based on your research and performance
Requesting a salary hike necessitates planning and a clear communication strategy. Remember to keep your options open for negotiation and alternative compensation forms and follow up with your manager after you make your request. With these steps, you can confidently approach the salary hike conversation and increase your chances of succeeding. Constantly upgrading your skill set also goes a long way in boosting your self-confidence when it comes to asking for a raise. You can start by checking out a wide range of courses by Emeritus in association with the top universities around the world.
By Siddhesh Shinde
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