Let’s get one thing straight. You are expected to negotiate your salary. Whether you are in a job, or applying for a new job. Just sitting back and accepting what’s coming is no mark of a great leader.
You’re in finance. You proactively negotiate every day. Directly on numeric matters, and indirectly, negotiating, influencing and persuading the people you work with on important issues everyday. If you can’t stand up and negotiate your case on something as personally important as salary – you’re in the wrong job.
That’s not to say you have to be combative, or pick needless fights. But when discussing salary, you must be prepared to approach it like a business conversation: without emotion, with a well reasoned request, a knowledge of your walk away point, and a really solid business case to support you.
#1 Look at performance data thoroughly and objectively
There’s no point in walking in asking for a 20% salary increase if you know the company is really struggling. Likewise, you can’t ask for a meaningful pay rise if your performance has been poor. You must consider all factors, from company performance to your individual performance, including what is contained in your contract about remuneration increase before even attempting to knock on anyone’s door. Is what you are asking for unreasonable?
Moreover, equipped with this information, you’ll find it far easier to refute lazy objections to considering a salary increase once the conversation is opened. The old chestnut of the ongoing ripple effects of the global financial crisis is less easy to accept when you know that the company’s EBIDTA has increased by over 17% in the last 2 years.
#2 Find out your market worth and be clear on what you expect
This may sound obvious, but if you don’t know what people of your experience are worth in the jobs market, you can’t negotiate properly. This isn’t to suggest you start throwing idle threats at your employer about what you could “command” in the market. Far from it, but it will give you confidence in knowing what you are seeking is realistic. Don’t rely on last year’s information either, salaries have changed a good deal in the last 12 months. Talk to an expert – you may be overdue a pay rise.
Once you know what you should be expecting, you must be clear on what you’re asking for. Thinly disguised requests for a rise won’t be taken seriously, nor will unrealistic requests. If you’re in a job, there’s other things to consider of course, most critically alignment with peers and formal processes regarding salary reviews, but the important thing to remember is you must begin the conversation from a clearly defined starting point. The rest is compromise and negotiation skill.
#3 Get your facts straight, prepare a business case
Most of these discussions happen at review time, so it’s likely you’ll have an appraisal document and set of results to back up your salary increase request. However, ensure you’ve used this appraisal information effectively. Identify where you’ve really added most monetary value over the last 12 months, and use that as your core argument. Examples could be: growing the team (and your role remit) to provide an integrated business partnering service to the business which has contributed to a 20% improvement in GP; or leadership of an outsourcing initiative that will deliver 15% reduction in administrative cost. Whatever value it is must be linked to a quantifiable monetary outcome. You’re asking for money, so you must prove your worth.
Above all, the most important thing is to prevent emotions from playing a part in this process. Salary is important personally – it’s a marker that determines your “value” to your employer and to your social world, so it’s natural to feel heightened responses to arguments that haven’t gone your way. Not letting conversations get heated, sour, or worse – buried over – is important – so separate the connection between you and the money and treat it like any other part of your role as a finance leader, negotiator, influencer and communicator. If anything, it’s an opportunity to show your superiors you at your best.