How to tactfully negotiate for an acceptable raise?

Question

I work as a software developer with about a few years of experience. I earn $90k in a major metropolitan area.

Recently, I was offered the opportunity to take on some management responsibility within my team (not leading the team, but managing a few junior people who will need extensive coaching). Some things still need to be nailed down, so it's not certain, although it's likely. I asked about whether I would receive an increase in compensation. Net out is, yes, but they didn't cite numbers ("we have budget"), and the role/increase/title change won't be approved by HR for 2 or 3 months because of an administrative backlog. Due to the fuzzy TBD-esque nature of things, I have not pushed back hard on salary (this is our second conversation about the role), but I also don't want to sit and wait too long.

The backlog with official HR approval makes me nervous, because, in theory, 2 or 3 months from now I will have already started the role. I would be in a pretty awful negotiation position at that point!

I'm particularly concerned about salary because I had wanted to broach an increase regardless this year. My company does not give out merit increases unless you fight for them, and it tends to underpay for the industry. I haven't gotten a raise in two years, and my teammate, who has very similar experience and aptitude to me, earns $10K more a year. I know this because we're good friends. The disparity between us exists because he got his raise through a counteroffer, whereas I simply asked for a raise (I did so after hearing he got a counteroffer). An argument could be made I should even outearn him, because I've been recognized by higher management repeatedly and have received for a LOT of department awards over the years for "going above and beyond."

Net out is, it would leave me with a bad taste in my mouth if they came back and said, here you go, take a $10k raise. A ~10% raise isn't bad on the face of it, but it would only put me at parity with my coworker, who is not managing people.

So, two questions:

• When and how do I tactfully negotiate salary? The role is contingent on other teams giving their OK, so this isn't a SURE thing, and many details are fuzzy. I don't want to make it seem like it's all about money, nor begin talking about salary too early. But I am worried about being screwed over if I say nothing. FWIW, I'd like the role career-wise and it is a role they don't HAVE to create (they pitched it as "this would be cool to do, but only if you're up for it"). So if I say, nope, salary's not enough, then work is status quo and no angst will be had for the company.

2. If the proposed salary increase offered is <$10K, is there a way I can tactfully allude to the fact that it would put me at more responsibility for equal pay vs. my coworker? I assume referring to my coworker specifically would be in bad taste. Better just to be direct and say, look, I want at least $15k-$20k because 1) company underpays in general and 2) I know there is pay disparity internally within our department?

Answer 1

If the proposed salary increase offered is <$10K, is there a way I can tactfully allude to the fact that it would put me at more responsibility for equal pay vs. my coworker?

No. Sharing this knowledge may already have violated company policy. More important: your compensation is between you and your employer, what other people are paid is generally none of your business.

When and how do I tactfully negotiate salary?

You should prepare right now and bring it up during your next conversation about the new role. No need to be tactful. Instead focus on being data driven and logical. Leave emotions out of it.

1. Understand how compensation works in your company. Read up on any HR policies, handbooks or presentation/resources that are available on the topic. Most larger companies use job grades and salary bands. Job codes are defined through generic job descriptions, salary bands are based on market surveys and your position in the band is determined by your performance. A big player in this field is Radford: https://rewards.aon.com/en-us/insights/articles/2015/radford-global-job-leveling and many companies use their approach or data in some way form or shape.
2. You may have to dig a bit. Some companies are reluctant to share process or salary band data. Don't be afraid to go and pester your HR rep. This a perfectly valid question and they should give you a reasonable answer.
3. There are two ways to get a raise: update your job code or move to a higher position in your band. The first one is the easiest and probably the best to go after. If your current job description doesn't include supervision and mentoring but your new role does, the new role should be in a different job code.
4. Moving significantly inside the same band is harder, especially if you are already sitting at the mid point or higher. The bands are not that large to start with and there is a lot of reluctance to go above the 75% or 90% percentile.

Prepare for a lot of push back and evasive maneuvers. Anticipate them and prepare your replies up front. Some examples:

1. Boss: HR is busy with paperwork backlog. You: Can you please explain to me what exact paperwork is required and when in the process is needed. Does the paperwork impact the actual raise amount and/or timing, or is it only required for the administrative execution after the decision is made. What's the time line for the backlog. Should we delay our discussion until HR is ready to engage?
2. Boss: That's not enough of a change to warrant a different job grade. You: Sorry, I don't understand. If that's the case why have discussed this as a new role? Supervising and mentoring is not something I have done before so it's beyond the scope of my current role and I don't see any of my peers doing it either. If you don't feel that this brings additional value to the company, why do it in the first place?
3. Boss: let's talk about it later. Let's start it and see how it goes. You: Sorry, I'm really excited about the new role but I also need to assess whether this is good career decision. More responsibility and work without any commensurate compensation adjustment feels like a step in the wrong direction.
4. Boss: Sorry, there is no budget at the moment. You: when do you think a budget will be available. Can we create a time line that works for both of us. Are there alternative compensation methods we can consider until the budget becomes available. How about we align first on a long term compensation strategy for this role and then we discuss how to deal with the short term budget constraints.
5. Boss: This is a great growth and learning opportunity for you. Don't worry about compensation, we'll deal with this later. You: Thank you for considering me for this exciting opportunity, but I need to assess whether this step is long term viable for me and compensation is an important factor in this. Can we at least lay out a time line and some estimated numbers assuming I'm successful in this role. I do believe that I can bring significant incremental value. Do you not think so? Does the company feel the incremental value is worthless ?

The ultimate answer may still be no and then you have to make up your mind of what to do. Your options are

1. Decline and keep doing what you are doing
2. Accept the role, work hard and it and hope for the best
3. Go looking elsewhere.

There are pros and cons to either one of those and it also depends a lot on how your negotiation goes, but that's a topic for a different question.

Answer 2

Salary is not a reward for effort. It is recognition of worth to the company, which has many factors. If you're been receiving awards for going above and beyond, that's great. Hopefully bonuses reflect that.

You should really be looking at what the entry-level salary is for a management role. If you've been historically underpaid, that's just something you can't deal with now. Going forward, looking at the new role, you have to look at it in isolation.

The "administrative backlog" is a little dubious, but not unheard of. Of course, your starting date and change in remuneration should happen at the same time. And that will form part of the agreement

The proper time to negotiate, as you indicate, is before you agree to the role change.

If I was you, I'd just let the process work through, and obviously don't agree to the role change without also agreeing to a change in compensation. At this stage, you have agreed to explore the opportunity.

Answer 3

1. Never bring up what your coworkers, colleagues, or peers make. It's none of your business and it's irrelevant to what you make. Each individual negotiates their wages/salary for themselves.

2. Don't "play" politics. Don't bring up the company history of low pay, don't bring up pay disparity in your department, don't bring up issues of gender pay disparity. Any attempt on your part to negotiate your new salary based on these issues is going to make you an adversary and is going to turn the negotiation into an adversarial situation, and that won't end well for you. Negotiate your new salary on your merits. Leave all other issues out of the conversation.

3. If you went to a restaurant to order a meal, or you went to a shop to purchase some items, would they sell them to you on your promise to maybe pay them in 2 to 3 months? No, they wouldn't. If you were selling your car would you sell it to someone who promised to maybe pay you in 2 to 3 months?

Your employment is a business transaction. You supply your company with your time, labor, and skill and they pay you for it. Your time, labor, and skill are your product. They're asking you to give them more of your product with a promise of maybe paying you for that product in 2 to 3 months. If it were me, I'd negotiate my new salary and retroactive pay for the 2/3 month period, I'd get the terms in writing, and I'd have an attorney review it to ensure that it's legally binding. None of that guarantees that the company will make good on their promise, but I wouldn't just accept their promise on a smile and a handshake.

Standing up for yourself, negotiating for what you want, and holding their feet to the fire to live up to their promise is going to stand you in good stead now and in the future. Companies take advantage of employees because they can and because most employees simply accept what they're given. If you want something, ask for it. If they make you a promise, demand that they honor it. If they don't then move on.

The more you stand up for yourself the more likely it is that you'll get what you ask for and the less likely it is that you'll be taken advantage of. Your career belongs to you. You need to own it. What you earn is solely dependent upon what you negotiate for. Nobody else is looking out for your best interests. You need to look out for your own best interests. Now and into the future.

Answer 4

Recently, I was offered the opportunity to take on some management responsibility within my team (not leading the team, but managing a few junior people who will need extensive coaching)

From what you say here you have NOT been given the opportunity to take on some management responsibility. Period. You where asked to coach some juniors, which generally is the responsibility of more senior people. This may well be a way to see how you manage this and may result in a team lead position down the road, but it is NOT a team lead position.

Given that, and the EXTREMELY precarious situation the job market has at the moment, the only possible answer I see for the question "How to tactfully negotiate for an acceptable raise?" in this context is: YOU DO NOT because you are not offered a more senior position. You risk looking greedy, wasting the chance for an actual move into a managerial team lead position and in the current context you will look bad, thanks to COVID.

I haven't gotten a raise in two years,

You know what I have not had in nearly 2 years? PROPER HOLIDAYS. Happens that most of where I am is in a constant form of "lockdown or not, let's roll a die this week" making any planning irrelevant.

You know what also happened? The economy is in the gutter in many ways.

Because unless:

My company does not give out merit increases unless you fight for them, and it tends to underpay for the industry.

has the next sentence with "And we are not hit or hurt by COVID and work is amazingly good" - you seriously should check that side of the equation first.

I haven't gotten a raise in two years, and my teammate, who has very similar experience and aptitude to me, earns $10K more a year.

First, that is less than... on a 90k Salary it is not a lot. Second, how do you know he has a similar experience, output, TALENT AND aptitude? He may well be perceived as worth more because of soft skills etc. and this IS a valid reason to pay him more.

Be VERY careful what you ask for in this climate. Not saying do not play hardball, just saying make sure you know the battlefield and are not stomping into an HR department trying to balance budgets that a problematic business demands. ANY raise you get may put you on the top of the "fire him" list when things get worse, and depending where you are - let's say if you are i.e. in Dubai or the USA... there is a SERIOUS chance things will get a LOT worse.