Negotiating a pay raise can be tough.
U.S. at its lowest level since 1969, employees today are in their strongest position in years to negotiate a raise, according to Martha Gimbel, director of economic research at job search site Indeed.
“Employers don’t have the same ability to be as picky as they were five to six years ago,” Gimbel told CNBC Make It last month. “If you are looking to walk into your boss’s office to ask for a raise, now is probably a pretty good time.”
So just how should you go about it? Oliver Cooke, executive director at New York City recruitment firm Selby Jennings, told CNBC Make It it comes down to three steps.
As with any kind of negotiation, the first step is to do your research and figure out where you sit in the market.
“Speak to recruiters and colleagues and peers to see what the market rate is for someone in your role with your experience,” said Cooke.
Online sites like PayScale and Salary.com can be useful for that, providing a ballpark figure for people working in a similar role. However, Cooke cautioned against relying on them entirely.
“They do provide data but sometimes they are not accurate based on other factors,” said Cooke, noting that such sites fail to account for variables like geography, skill set and education, which can impact wages significantly.
Instead, he recommended keeping your “ear to the ground” and regularly interviewing — even if you are not planning to move jobs imminently — to stay up-to-date with your industry and the salaries available.
Once you have your research in hand, state your case to your employer — or prospective employer — putting the emphasis on the business case and the benefits you will bring.
“When you’re giving your justification for a salary increase, make sure it is founded in the company’s philosophy and how it will help the business,” said Cooke.
“Don’t make it personal,” he added, noting that it’s important to keep the discussion logical rather than emotional.
Bestselling management author and CNBC contributor Suzy Welch agrees, telling CNBC Make It that stating your hopes to repay your mortgage will not demonstrate your commitment to the business and will likely undermine your professionalism.
Finally, show you’re serious in your negotiating stance by drawing a bottom line and sticking to it.
For internal requests, that may not guarantee a pay raise immediately, but it will demonstrate your ambitions and could lead to a constructive conversation about the steps required to get there.
Meanwhile for external moves, it may provide an indicator of whether the position is the right one for you, said Cooke: “Don’t be afraid to walk away if you think the company is low-balling you.”
However, he added that when negotiating pay it’s also important to keep in mind the bigger picture and your long-term prospects.
“One of the biggest mistakes we see is when people become fixated on the number they’re trying to get to and forget the other factors like career progression,” he noted.
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