How To Negotiate A Pay Increase Or New Salary

Getting a raise or negotiating a new salary is tough. Learn the negotiation skills to empathetically and respectfully get the raise or salary you deserve.  Great negotiation skills are an absolute necessity in business. Almost everything is negotiated including price, terms, specifications, schedule, etc. If you provide high value to your current employer or will to your future employer, you deserve to be compensated accordingly. Inflationary 3% increases for top performers so investors and top management can walk away with large profits and bonuses is unfair and plagued with greed. You accepting this is an even greater outrage. Do not settle for the status-quo. Practice negotiation and use it to advance your career. Below are four critical steps to succeed in any salary negotiation.

Create Leverage

  • Be a top performer providing high value at what you do. When TT Electronics was a customer of DiPaola Consulting, I focused on providing extremely high value. Information that took weeks to obtain internally I was able to provide in days. Reports I provided were decisive with sound technical backing. I demonstrated how they could grow their product portfolio and net revenue at healthy profits with manageable capital investment. I had a history of success achieving similar goals and it showed. Hence I was asked to apply for their opening for VP of Global R&D. It was clear they wanted me and this strengthened my negotiating position.
  • Generate interest from others. When you have multiple good offers for employment, companies will compete for you. This drives up your salary potential. I have seen people obtain up to 50% increase in salary when their skills are valued and multiple companies show real interest.
  • Study the state of the position and needs of your current or future employer. A position that has been vacant for some time suggests there has been trouble filling it and this may work in your favor. Secondly, a company that is rapidly growing and has healthy profits may be willing to pay more. Conversely, positions with multiple good candidates put greater leverage in employers hands. As mentioned above, positions you are asked to apply for can be very lucrative because they have already expressed a strong interest.

Come Prepared

  • Clearly document the value that you provided in terms of profits, net revenue growth, product expansion and vision implementation. If this is for a new position, show what you have done for others and your plan for the future. Management (your supervisor and above) need clear evidence to support their decisions and managers think in money, time and targeted goals. In order to influence them, you will need to speak their language. Make this easy for your supervisor by providing clear and concise documentation that can flow up the chain of command.
  • Know what your goals are and bring significantly more to the negotiating table than you need to close the deal. When negotiating a salary or raise, there are so many money related items on the table including:
    • Monetary Compensation: Base salary, overtime, car allowance, dividends (some cases)
    • Bonuses: Signing bonus, annual bonus, stock grants and options, patent incentives, sales royalties / commissions, employee referral incentives
    • Benefits: 401K match, medical, dental, optical, disability (long and short term), life insurance, medical saving accounts, matching philanthropic giving, employee stock purchase plans
    • Paid Time Off: Vacation, sick leave, paternity / maternity leave (in addition to that required by law), comp time, sabbaticals after 3-5 years on job
    • After separation: Severance especially if contract violated

Its important to note that terms of compensation should be negotiated. This includes percentage of bonus or salary increase paid based on your performance versus company performance. Vesting periods of stock options is another example (some fully vested at receipt and others vesting over 2 – 4 years). Furthermore come prepared with creditable evidence to back up your position on each of these items. This can be obtained from professional societies, recruiters, consultants, specialized companies, company financial disclosures and more.

  • Money is not the only concern, terms can be equally important and should be negotiated. I define terms as all other non-money related items including:
    • Office: Location and size (on site, remote or home office)
    • Function: Flexible work hours, title, job function, technical ladder status, project selection, financial sign off authority, dedicated administrative support, amount of travel required, class of travel (domestic and international), reporting structure, start date
    • Legal: Rights to your ideas (outside your employer’s core business) – most employers have you sign the rights of all your ideas to them unless negotiated, no noncompete clause after separation, permission to maintain a business on personal time (ski instructor, professional website, etc.), disciplinary and grievance procedures, personal usage of computer / phone, governing laws and jurisdiction (your country and state will likely be preferred)
    • Tools: Mobile phone and computer provided, provided software to complete work, return of property (negotiate keeping phone and computer) after separation

Some of these items may seem trivial like title but they are really not. Respect within the industry is important. Titles carry weight and can open doors.

  • Come to the negotiating table well rested and at the proper time. Simply put, when you are tired you are more willing to accept a less attractive deal. The focus becomes getting the negotiation over rather than getting the best deal. You are also more prone to mistakes. Hence schedule negotiations for a time when you can come well rested and there is an increased chance of the other party being more willing to negotiate.  Times when your manager is under pressure or has their mind else where (right before lunch, before an important meeting or on Friday afternoon) are not preferred.  Also be aware of company revenue and profits and pick better financial times.

Be Smart and Respectful In Negotiation

  • Listen and observe first.  Start the conversation stating you are there to discuss your new salary or a raise.  This should also be in the invitation to the meeting.  Then ask some open ended questions (leading with how or what) around their thoughts of your performance, project successes and how your career may advance.  Listen carefully to the hiring manager and observe their body language.  This can provide a wealth of information on the manager’s position such as openness, timing, limitations, thoughts on your performance, etc.  There is a good chance you will uncover information beneficial to the negociation creating leverage.  If you need further clarity on a subject, try mirroring their key words in the form of a question.  Exceeded your expectations? When your supervisor is finished, summarize their position to ensure clarity of your understanding.  The response you are looking for is “that’s right”.  Then you know you have properly summerized their position and you have been empathetic in the conversation.  This sets the stage for your supervisor to hear your request.
  • Communicate your position in a clear and concise manner. Start with articulating your value in the manager’s language (profits, growth, schedules, vision, etc.).  Reference the hiring manager’s needs and how you can help accomplish those goals.  Demostrate how your performance is above market.  This will set the stage for above market pay.  If the market is in your favor, discuss your compensation (current or their offer) versus market (showing a gap).  Next highlight your must haves (salary, bonus, stock options, benefits, vacation) asking for more (10 – 25%) than you need to make the deal. Then bring in less critical items to sweeten the deal. If there is a firm no to a particular item you need, be flexible to find a suitable alternative. For example, you may request a percentage of royalties only to receive a firm no. Then come back with a bonus structure based more on your performance (meeting predefined goals) rather than the company financial metrics.  Use verbal pauses to your advantage.  People are uncomfortable with silence.  This may move them closer to your position.
  • Explore the limits of the negotiation without completely turning off the other party. This requires intuition and feel of the situation. When negotiating with my former employer, I reviewed publicly available information on executive pay and did not exceed it in my requests. I pushed in certain areas but not in others based on competitive analysis and how the discussions played out.  Getting to a respectful “no” is good because you have reached the limit in this particular area and can explore others.  For example, once you reach limit on pay, there may be more flexibility on time off or benefits.
  • Be willing to walk away if your needs are not met or the deal does not make sense. Sometimes the best leverage is your ability to walk away. As soon as you cannot live without something, your leverage plummets. It’s key to separate emotion from intellect in this process.  Don’t give ultimatums.  Instead, thank them for their time and just calmly state you are considering other offers.

For each of the negotiating points above, it’s important to understand the market. For example, it’s standard for new employees to receive 3 weeks vacation regardless of experience. However, I have negotiated this up to 5 weeks plus comp time and sick time with multiple weeks for paternity leave and paid sabbaticals. I was able to do this because I had evidence of other companies doing this for their experienced employees.

Document Agreements In A Contract

Once you have agreed to all of the elements of the compensation package and terms, have it documented and signed in a contract. This protects you legally from your employer backing out from any part of the agreement. It’s also reasonable to have an employment lawyer review it to ensure your contract is legal, elements are not missing or ensure clauses are in your favor. Keep in mind the employer developed their contract with a lawyer and regularly shares data with other companies to obtain employee market data on compensation. You should follow suit.

If you are looking for additional resources, an excellent book by Chris Voss is Never Split the Difference.

If you found this article helpful, please like and share with a friend or colleague who may benefit from it.  If you need support in leadership, design or commercialization of your products, feel free to sign up for a 15 minute slot with me to discuss your project (@

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