What Is a Good Pay Raise and How to Negotiate for One
By Indeed Editorial Team
Updated 22 January 2023
Published 3 January 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you received a favourable performance review or just took on new tasks, you may qualify for a pay raise. The specific salary increment you receive is highly dependent on various factors, such as the level of your professional experience and location. Clearly understanding what constitutes a fair pay raise and how to ask for one can improve your chances of earning a good raise. In this article, we discuss what a good pay raise is, list the many elements that influence a raise, explain when it's appropriate to ask for a raise and outline how you can negotiate a pay increase.
What is a good pay raise?
The definition of a good pay raise is highly dependent on the viewpoint of the individual receiving the increment. Generally, organisations offer employees a three to five per cent wage raise. You may wish to note that continuous salary increases may build up over time, giving you a bigger income than when you first joined the firm.
While most employers reward you with a monetary raise when raising your compensation, they may also offer you a non-monetary incentive or perk. That may replace or complement your monetary raise. A non-monetary incentive, like a training and professional development programme, can help you optimise your earning potential in the long run.
Why do staff get pay raises?
When firms provide raises to their employees, it's usually for a particular reason. You're more likely to earn a raise from your employer if you meet one of the following indicators:
produce high-quality work
contribute to revenue growth
possess unique abilities
maintain a positive attitude
display proactive behaviour
Which variables influence a raise?
Here are some elements that influence a pay raise:
Your performance at work
Many organisations hold employee performance evaluations to examine their workers' strengths and faults and to help them improve. They may also hold evaluations to assess if an employee's performance warrants a raise in salary. If you perform a good job or surpass expectations, you may get a raise.
Your line of work
Industries experiencing rapid development usually offer higher pay hikes not simply to attract new employees, but also to retain present employees who can contribute to this growth. Organisations with more robust growth have a consistent stream of money, enabling them to reward their employees more. You may want to note that slow-growth industries may be less likely to grant compensation increases.
The company's success and rules have a significant influence on your likelihood of receiving a pay increase and the size of the raise you receive. In rare situations, the company may not have adequate financing to grant you a pay raise or may refuse to extend you one if you already fall within the salary raise range. If your firm is successful, you are more likely get a raise.
Your role and responsibilities
Many businesses calculate salary increases based on the number of duties you've embraced. More tasks and duties may highlight your job ethic and capacity to work well with others. Your capacity to add more duties to your job may be enough to persuade an employer to give you a pay raise.
Your prospects at the firm
Employers who provide you with a pay raise are investing in your professional future. As such, your future and prospects at the organisation may play a key part in your salary increment. For instance, an employer may assess what your future duties may be and if they would like you to remain with the firm for an extended period. If they envision a future with you, they're more likely to not just offer you a raise, but a significant boost in compensation.
When to ask for a raise
It's important to bring up and ask for a pay raise at the correct moment. Your request timing can have a substantial influence and play a major role in determining whether you earn a raise. Outlined below are some considerations on when to ask for a raise:
Six-month follow-up: It's advisable to wait at least six months after starting at your present workplace before requesting a raise. Waiting for this period enables you to make meaningful contributions and prove that you're an asset to the company.
When the company is profitable: You're more likely to earn a raise when your firm is making money. This is because an increase in revenue and assets allows them to distribute more financial resources to their employees.
Upon completion of an important project: If you've recently completed an important project that effectively demonstrates your commitment to the firm, now is an excellent moment to approach your employer or supervisor for a raise. Asking within this moment provides your management with an insight into the value you provide to the organisation and it's a testimony of your work ethic and hard work.
Before salary reviews: When the company's remuneration is under review, enquire about the raise to your human resources manager or your supervisor. For instance, if your firm provides raises towards the end of a particular month, request one a few months ahead of time to enable your manager to assess your request and have a meeting with individuals responsible for determining who receives what.
During annual performance reviews: You can discuss your salary expectations when you and your supervisor sit together for a performance review.
How to negotiate a raise
Although it's appropriate to request a raise that's in line with your hard work and work ethic, it's critical to adhere to specific tactics and best practices as they can result in a more desirable outcome. When requesting a raise, it's important that you first understand why you're deserving of one and how you can effectively negotiate one. To help you negotiate a raise, use these steps:
1. Consider why you're deserving of a raise
Think about the rationale and reason for your request before beginning talks. Examine your most recent tasks and projects, instances when you exceed expectations and moments when you contributed value to your firm. When negotiating a higher salary, emphasise your own accomplishments, talents and experience. Reflecting on this might help you in using specific instances during a discussion with the executives.
2. Determine your target salary
Investigate the average and common salary in your field before entering negotiation. It's essential that you conduct research on salary raises in your sector and vocation. Proper research determines whether you receive fair compensation and assists you in determining a concrete amount to give to your employer when discussing your remuneration. Setting reasonable expectations is critical in every discussion. Make sure that the increase you want is appropriate for your experience, location and other determining variables.
Be certain to investigate the average income for professionals in your profession who have the same degree of experience as you. As such, when your employer asks, you can come up with a figure. In the majority of instances, requesting a pay raise of 10 to 20% higher than your current pay is appropriate. You may also utilise numerous Internet sources to determine a suitable raise according to your job title, location and amount of experience.
3. Put together a presentation
Consider what you want to say and highlight to your supervisor when you request a raise. Create a compelling story that showcases the achievements in your role. Make sure it's well-organised and functions as a sales presentation. Be mindful to retain a conversational tone during your pitch and be ready for enquiries or counterarguments.
4. Set up a meeting with your supervisor
When it comes to requesting a raise, it's critical to choose the best moment to begin talks. Consider aspects such as how long you've worked with the organisation and its present performance. Asking at the right moment can help you effectively negotiate a raise.
If you're not happy with the offer or if you believe you're worth substantially more than what you're earning according to your research, you may consider looking for alternative job options. Some professionals switch careers to earn more money. If you decide to stay with the same firm, your pay increases may be limited if the organisation only has a particular percentage range in which it may raise your income.
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