The largest raises you’ll ever get in your career typically come from quitting a job and joining a new employer, though not everyone wants to jump ship. Learning how to negotiate for a pay raise—whether you are job hunting or staying put—is critical if you hope to earn what you’re worth in the market.
“The mistake many HR people make is not understanding their market value for the role they’re pursuing. They think about their current salary without researching the salary range or adding in the current climate for hiring talent,” said Denise Novosel, a vice president of recruiting in Oregon who has worked for two Fortune 500 companies in her career.
“For example, an HR person may have a lower salary because they’ve stayed too long where they are and are underpaid,” she explained. “They fail to see that they only earned an annual merit increase, typically 2 percent to 3 percent. If your employer had to replace you and hire someone for the same job, they’d most likely have to offer a significantly higher salary.”
To be sure, learning how to negotiate pay may require seeking help from an expert. “The HR people who negotiate well usually have been coached,” said Andre King, a recruiting manager with a Fortune 100 company outside Seattle. “Compensation is built around ranges, and a complex formula is used to determine what the range is for a particular position. Most HR people know this but forget that no company has an unlimited budget.”