Your Leverage When Negotiating a Raise

Your Leverage When Negotiating a Raise

You’ve been working for the same company in the same position for over a year now. This is the best time to ask for a raise.

Perhaps, “ask” isn’t the best word for the situation.

Neither is “demand”. You will be entering into a negotiation.

As is the case with any negotiation, your chances of obtaining what you want are greater when you understand what leverage you have and you understand how best to use it.

In this short article, identifying your leverage and understanding how to use it is exactly what we will be looking at.

We will also be taking a look at some common salary negotiation mistakes to avoid.

Leveraging the Competition

All businesses are in competition with one another to recruit the best talent, optimize them, and retain them.

In most cases, it is the larger, more established companies that set the pay rate for the industry in a given position.

Newer companies must then follow suit, and, in many cases, offer a more attractive salary in order to entice top talent.

Job boards on websites such as LinkedIn, Lensa,, etc. are a good place to review what other companies are offering for a job similar to the one you are currently doing. 

You can also leverage these platforms to find jobs that pay $20 an hour, or more.

Remember, the salary offered by these companies is for a new recruit.

It stands to reason that even if you find a salary offered that is much higher than your current salary, it is for someone just entering the company.

It is very likely that the high salary you see in the job offer will be increased after the employee has held the job for over a year – as is the case with you.

You should enter the negotiation armed with several examples of similar jobs offered with a higher salary than your current salary.

Give a Man Enough Rope

A good strategy to employ when negotiating a raise is to let the other party talk.

Let them try to explain why there is such a disparity between your current salary and the higher salaries for a similar position you’ve found on job boards.

It will be difficult for management to admit – and unlikely – that the other companies are better companies.

Most likely, they will offer other reasons to explain the disparity:

  • More responsibility
  • Higher level of education or other such requirements called for
  • Other factors such as bonuses or perks that help even out the disparity

Essentially, what management is doing is setting the goal post for what you would need in order to reach that higher salary.

Hold them to the standards they set.

If their response is that the other jobs carry with them greater responsibility, ask for more responsibility.

If the other jobs require special skills, ask for special training.

You don’t need your salary demands to be met immediately.

Instead, the negotiation could act as a way to set milestones that would lead to a higher salary.

In this way, you will get a much higher salary, but you are offering something in return – offering to take on more responsibility or offering to acquire new skills, for example.

Leveraging Your Company’s Financial Situation

First, you need to find out just what kind of situation your company is in.

What is the trend in sales?

Has there been any change or increase in the number of investors?

Has the company’s overhead gone up or down?

There are several ways you can get an idea of your company’s financial situation.

  • Internal communications (gossip, rewards and recognition, etc.)
  • Press releases (either from the company or external sources reporting on the company)
  • Annual reviews of the sales team (this should be made available to you by simply asking HR or the head of sales)

Regardless of your company’s current financial situation – assuming it is not dire – should translate to an increase in salary.

If the company is growing, then so should its investments. And salaries could be considered as an investment.

If your company is experiencing a downward trend, this is the moment to change strategies, make an aggressive increase in investment.

They should raise your salary with the expectation of a good return on their investment.

Leveraging Your Options

leveraging your options

It’s important not to present your request for a raise as an ultimatum. Ultimatums can stunt a relationship.

And they rarely produce sustainable results. Remember, this will most likely not be the last time you ask for a raise.

You want to keep the lines of communication open for further discussions down the road.

And whatever conclusion you and management reach is likely to set a precedent for future negotiations.

However, you do need to be prepared in case your salary request is not met.

It may even be a good idea to contact recruiters or head hunters or apply for some high-paying jobs just so that you get an idea of what your options are.

The Bottom Line

Negotiating a raise in salary is just that: a negotiation.

You need to bring something to the table.

What are you willing to give to the company?

What greater responsibilities are you prepared to accept to justify the raise?

You should also be wary to accept an offer too quickly.

The chances are that they will not make you the absolute best offer they can.

And even if they do, it is possible that the situation could improve in a few weeks or months and you’re better off waiting a bit to see if they can’t improve their offer.

You need to enter into the negotiation prepared.

Do your homework, both on your own company and on the competitors.

Remember, you are not only negotiating a raise at this time, but you are also setting a precedent for future negotiations down the road.