CIO Feature: The do’s and don’ts of negotiating a raise
If you haven’t asked for a raise, it’s costing more than you know. “Two thirds of American workers fail to negotiate their pay,” says Ben Cook, CEO of job-negotiation platform Riva. “That costs the average worker a million dollars over the course of their career. For a CIO or anyone on the path to the C-suite, that number is much higher. You might think you are leaving a couple thousand dollars on the table. But the money you leave there today costs you this year and next year and in the inflation-adjusted raise of the year after. Raises compound upon raises.”
The thing is, though, you need to do more than ask. You have to negotiate. “Sixty-six percent of American workers fail to negotiate pay,” says Cook, “but 100% of employers lowball on the first offer.”
This is a conversation you want to prep for. Don’t go in there, deliver an ultimatum, complain about your mounting bills, or whine about unfair compensation. Those are rookie moves. Negotiating is an art and a skill, and it requires significant preparation. But it’s well worth it.
“Negotiation should be the best paid hour of your life,” says Cook. “It feels like pulling teeth. It can be intimidating. It sounds unpleasant. But even a single hour spent at that bargaining table can put $25,000 in your pocket.”
Do: Lots of research
This is basically arming up for battle. The person you will ask for this raise already has all this information. “HR departments have paid access to a massive database with all the market data,” says Cook. “The candidate doesn’t have any of that.” His firm levels the field by providing that information, but, he says, this research is not a magic bullet. You will not discover a number, ask for it, and win at this.
You need to arm yourself with this information but “it is more about leverage than just the research,” says Cook. “We try to work with clients to understand what is their walk-away and what is their employers walk-away.”
In the current workforce, tech people have a lot of leverage. But knowing the market is only step one.
Don’t: Think of negotiating as a fight
Although negotiations can be tense or seem like something won or lost, it’s important to stop thinking of this conversation as a battle. “Negotiating is a lifelong skill,” says Cook. “Particularly for someone who wants to get into the C-suite. You’re not going to get there if you don’t learn to advocate for yourself. And you’re certainly not going to succeed there if you can’t negotiate.”
If you hesitate to negotiate because it feels like an adversarial way to behave with someone you plan to work with, readjust your view of negotiating. It’s not a battle. It’s problem-solving.
“Everyone thinks that negotiation is about arguing,” says Cook. “They think of negotiation as two people sitting on opposite sides of the table, making steely eye contact until one side caves. This could not be further from the truth.”
In fact, going into that conversation hostile is a bad negotiation move.
“Negotiation is about two people sitting on the same side of the table,” says Cook, “working through issues that are preventing them from reaching a deal. The huge myth is that negotiation harms relationships. Negotiating is not about arguing. Negotiation is about meeting your interests in the most mutually beneficial way you possibly can.”
You are solving a problem for yourself and for your employer. And along the way, you are impressing them with your ability to negotiate reasonably and effectively.
Do: Be flexible
“Be flexible in the currency that you get paid in to maximize your overall offer,” says Cook. “If you’re working for a startup,” he says, by way of example, “depending on where they are in their fundraising cycle, it may be that equity is cheap and cash is super tight. Or maybe they don’t want to part with equity but are flush with cash. The more flexible you can be, the better your odds of increasing your overall package.”
Don’t: Take no for an answer
Asking for a raise might go well and quickly or you might find yourself in a long game. If you are met with a no, don’t crawl away to lick your wounds. Consider it an opening gambit for a more complex negotiation toward your goal.
“Let’s say you’re unhappy with your current pay,” explains Cook. “You ask for a raise, and they say, ‘Based on your level, we can’t go any higher.’ Now you start to negotiate for a promotion. Maybe you have to get the title first and the better money that comes with it.”
Even if that’s not quite your scenario, there are lots of other things you can negotiate for, in the short term and in the long term. “You can negotiate for nice perks like vacation days, remote work, and things like that,” says Cook. “You can negotiate for better reporting lines, a monthly conversation with your boss’s boss, or to work on specific projects.”
One smart thing to ask for, he says, if you are thinking of this promotion as a step on your way to the C-suite or up the ladder you are on, is to ask for a faster review cycle.
“You can say, ‘I understand that we can’t get there today. But can we revisit this in six months with a clear plan for the things that I would need to do to show you that I’m ready for the next step,’” he says.
Do: Ask Questions
Another way that asking questions can help you negotiate, according to Cook, is when you are getting a “No way!” or “This is our absolute final number!” response to your salary or other compensation ask. “This might just be a bargaining tactic,” says Cook. He suggests digging a little deeper to find their why.
“Probe deeper so you can understand their constraints,” he says, suggesting a chain of questions. “‘Help me understand that? What’s driving that? Why is there a cap? Is this tied to location? Is it tied to years of experience?’ You can often uncover their underlying interests and design a package that meets your interests and theirs.”