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I had a good offer in another company. It was like a 20% higher the money I´m making now. I declined it since I was happy in my current company but I´ve always had the feeling I was underpaid.

I´m expecting my current company to offer me a ,more or less, 8-10% increase in the next performance review.

I want to ask for an increase of 20% since I think that´s the price the market would pay for me. Can I play the "I had an offer of X€€" card? Is that appropriate? How can I approach this situation? I find difficult to prove that I´m underpaid without playing that card

In this country (spain), we don´t have any website tracking salaries per areas or something like that

Thanks a lot!

user19650
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    If you're happy at your current job, why were you sending out resumes and interviewing? Be careful, your employer could see that as a tad manipulative. – Chris E Nov 05 '14 at 21:19
  • @ Joe Strazzere I know I haven´t proven it, my question is how could I do it taking into acc I have good proofs? – user19650 Nov 05 '14 at 21:23
  • @Christopher Estep There are many reasons, to train my interviewing skills, to research the market, to prove myself I can work in other teams... – user19650 Nov 05 '14 at 21:23
  • You should find out if you really are underpaid (locate statistics for your local area) so you either can say "I'm not underpaid" or "I am underpaid, I need to take this up with my boss!" – Thorbjørn Ravn Andersen Nov 06 '14 at 00:03
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    @ChristopherEstep: I think that most companies are not naïve enough to think their employees aren't looking for better offers on a continuous basis. Personally, I wouldn't switch jobs for just 20 % more. It depends on your culture though - here one-time large raises every 5-8 years are more common than yearly small raises. – Juha Untinen Nov 06 '14 at 13:16
  • If you have a good offer you either take it or shut up about it. – user1220 Nov 06 '14 at 14:55
  • If I was told this by an employee I would have learned that I can afford to pay them 20% less than another company and still keep them. That would not induce me to give them a 20% pay rise. – Dancrumb Nov 06 '14 at 22:54

6 Answers6

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If you bring up the fact that you have interviewed elsewhere, you may potentially seriously undermine your employer's trust in your commitment to the company in the longer term.

You could strongly insist you are being paid less than the market rate for your abilities, to the point that your employer suspects that you may have interviewed elsewhere. This is more likely to be successful, but it could still potentially land you in an awkward situation.

Consider also that from the company's point of view the question is not how much you're worth on the market, but how much value you represent to them, and what proportion of that they get to keep. Even if the company agreed with your assessment of your market rate they might still feel unable to offer you that salary.

Any negotiation for a higher salary comes with a risk attached. You have to decide for yourself how much risk you're willing to take.

Quirk
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Personally, I would not say this in a performance review. The only reason your employer should pay you more money after a performance review is if you have learned skills and responsibilities on the job that makes you worth more to them than you did when you were hired. Justifications like "well xx makes more money than me and xx company would pay me more" is not a valid reason for a company to pay you more money.

Lawrence Aiello
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  • I would think a basic cost of living increase would be appropriate. Anything less than 2% a year and you're effectively being paid less for the same job!

    As an extreme anecdotal example, I once heard of an electrician who retired making $30,000 a year. The same $30,000 he made in the 1970's.

     –  Nov 06 '14 at 00:08
  • How is that not a valid reason? If the market rate for your services is $salary + $X (where $X is some significant amount that is not accounted for in other non-monetary compensation), then it seems completely reasonable for you to ask your company to stop taking advantage of you. – Telastyn Nov 06 '14 at 14:38
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    "Market rates" do not account for how skilled someone is at their particular job. This is why programmers on a team should never share their salaries. If you go to your boss complaining that so-and-so gets paid more than me, he is completely justified in telling you they pay him that because he is more skilled than you. In that case, your only option is to find another job. This is why people should never share salaries. I have seen it tear apart some great teams. Like it or not, there will always be people more skilled and that work harder than you. – Lawrence Aiello Nov 06 '14 at 15:26
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    The salary doesn't always match up the hard skill either, but the negotiation skill. – dyesdyes Nov 06 '14 at 15:42
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It is common for your market price to be higher than your current employment offers you; most (but not all) wage-systems are built in that manner. Which also proves the point of why should they pay you more when all you have is your market price as your argument? All your colleagues would probably get a raise too if they got another job.

If you feel that you are underpaid, you must emphasise on your actual work and performance. If your work and performance isn't anything special - or worse, bad - they might even make a better deal out of you moving elsewhere as they can take in someone younger and cheaper. Perhaps someone more ignorant of its own worth.

Hinting or leaking the fact that you've had other offers does give the impression that you are glancing at the greener grass. That you turned down the offer does not mean you are worth that money, not any more. There's a possibnility that you may not find another company willing to pay that money for you again. Not to mention you have to be aware of that unless it's on paper, the figures for your salary are fictional; "The grass is only greener on the other side because it's fertilized with bullsh*t". If that is your case, only you know given that we don't know how you were presented the offer.

So all that leaves your employer is the impression that you may soon actually jump the fence for some greener grass, and why pay you more just to lose you?

What little you have as your advantage is that depending on your occupation title, it may or may not be hard to find a replacement as hiring a new guy with your exact credentials will probably cost them about what you ask anyway, and then the cost of the recruitment on top of it. Though as I mentioned, it may still be cost efficient for them to hire a younger guy and train him themselves.

Gemtastic
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What you are worth to another company, and what you are worth to your current company, are two different things. Your current employer may be well-staffed and you may be average among their staff; the other company may be desperate for your particular skillset and willing to pay more (initially, at least) to recruit someone to meet that need.

So I wouldn't try to use this as leverage; it just isn't very convincing.

If you know that you're being paid below the industry average for your skillset, that's a stronger argument. But even then I would just cite it as an interesting observation that may affect the longer-term plans of folks in your department, rather than expecting it to have any immediate effect on your salary.

The best way to get a raise is by exceeding expectations so they feel enthusiastic about keeping/encouraging you in particular. If you're just another average employee, they're going to give you just another average salary.

keshlam
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If you want to ask for a decent raise, you need to be able to explain why you are worth that raise.

You can show how, through your work, you have become more valuable to the company.

Or you can play the card you mentioned and show that others are willing to pay you more. That might hurt the company's trust in you, as others have said, or it may cause them to invest more in you if they really consider you valuable.

But even so, you have declined the offer, and you also don't want to leave the company. There is absolutely no reason why your company would need to pay you more, since you have no means to take a stand, and thus have no bargaining power whatsoever.

Gigi
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You did it wrong.

If you want to leverage more money from a job offer, you're meant to bring up to your employer that you have a job offer, and you're thinking of taking it because it offers more money.

That way, if they say "no", then they know you can take the job offer and leave.

What you're doing is probably not going to get you the raise, because you don't have the "threat" of leaving to back it up. A lot of answers have stressed the "market value", but the textbook definition of "value" is what someone will pay for something - so if someone else has an offer (present tense) for you for more money, then that is your value.

If you don't have another offer though, then your value is what you're employer, roughly, is paying you.

I don't think you should mention the other offer, because you don't have it anymore. Companies don't mind paying more for people, and what you did is not considered "mercenary", but you did it wrong.

As one commenter mentioned, the fact that you didn't take the offer indicates that the company offers you something of value beyond the wage too, so whatever you negotiate has to take that into stead.

As to arguing your wage rise, you can push for 20%, no problem, that's just bargaining. To back it up, stress all the great things you've done, and how that is better than the average, and how if the average raise is 10%, well, because you're better than average you want 20.

bharal
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    Going this route is essentially blackmailing the company. Worst case, I'd terminate the employee immediately for it; best case, I'd terminate them after I found a suitable replacement. However, if the employee showed me why (s)he was worth more money through hard work and dedication to my company then I reward accordingly. – NotMe Nov 06 '14 at 02:08
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    I think the emphasis here is wrong. IF you are about to leave because you've been made an offer you can't turn down, BUT you are eager (not just willing) to stay if the company addresses your legitimate (and not unreasonable) needs, you can bring this up. But you'd better assume that you are, in fact, leaving because there is likely to be some backlash unless you are an exceptional employee. Approached that way, it's less likely to be seen as "blackmail" and more likely to be seen as loyalty, trying to stay with your current employer despite the temptation to move elsewhere. That's business... – keshlam Nov 06 '14 at 14:23