Negotiating a raise during an annual review can be an important part of leveling up your career. But how much is too much to ask for? It's important to strike a balance between claiming your worth in pay without exposing yourself to too much negative backlash. So what's a good way to determine an appropriate increase in pay?
Some salary negotiation advice encourages asking for any amount that is deserved, and that no amount is too much as long as it reflects the value of what is being delivered at work.
Data on Salary Negotiations
Paysa Survey
In a 2017 survey, Paysa collected opinions from more than 2,000 professionals and executives, and the results were surprising. Only 28.9% of managers who are in a position to give a raise agreed with the idea that no amount is too much. In fact, most managers (or almost 39% of this group) thought that asking for amounts over 5% would be considered too much.
Non-managers and business owners responded in a starkly different way. In that same survey, 48% of non-managers and 45% of business owners both felt that it would be appropriate to ask for any amount that reflected the value of the work delivered.
What These Results Mean
It's important to break these responses down a little.It shouldn't be surprising that business owners felt that asking for any amount that is deserved is appropriate because more than likely, as owners, they built the company. That type of entrepreneurial viewpoint is crucial when creatingan organization, and the value that the owner provides for the organization is clear.
What's less clearly defined is what 'deserved' means and how that is reflected in value for non-managers. This is where establishing a clear body of work or evidence is important in backing up the request for a raise. The survey results went on to show that managers are looking for exceptional work - not just good work - when considering raises in an annual review. A non-manager could also consider collecting information on the market rate of similar job duties at rival companies. According to the survey, while this type of data can be helpful, it's still more convincing to show evidence of exceptional work or increased duties to justify the bump in pay.
Columbia University Business School Study
But this still doesn't answer the question of what an appropriate increase would be. A 2017 study from Columbia University's Business School helps expand on what Paysa's survey uncovered. Dr. Malia Mason and Dr. Daniel Ames found that a useful technique is to offer a range of options, rather than one fixed amount.
They also found that asking for between 5% and 25% pay increases yielded the most successful negotiations. Using a range of options was not only effective in expanding potential outcomes but was also an effective strategy because it communicates politeness. But the tactic has an upper limit. Their research found that asking for any range that would be more than 25% did not produce better results.
The Bottom Line
Taking the Paysa survey and the Columbia Business School survey results together, it might make the most sense to consider negotiating for an increase in pay between 5-10%. This might increase to as much as 25%, depending on the situation. For instance, a big increase in job responsibilities or an exceptional year in work product might justify a 25% increase. Key to the outcome is the strength of the evidence you can collect.
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This article reflects the views of the author and not necessarily those of Fairygodboss.
Tanya Tarrhelps people connect with the power of collaborative negotiation. Since 2000, she has supported executive leaders in government, public education, and managed political and advocacy campaigns across the US. Tanya has a masters of science in performance measurement from Carnegie Mellon University and is a certified health coach. She is currently writing a negotiation manual for introverts.
What’s your no. 1 piece of advice for asking for a raise? Share your answer in the comments to help other Fairygodboss members!
FAQs
Malia Mason and Dr. Daniel Ames found that a useful technique is to offer a range of options, rather than one fixed amount. They also found that asking for between 5% and 25% pay increases yielded the most successful negotiations.
Is 20% too much for salary negotiation? ›
Overall, we recommend that you start with a figure that's no more than 10-20% above the initial salary. If the pay is in-line with average pay, but you believe you can negotiate based on your skills and experience, consider a range between 5-7% above.
Is asking for a 15% raise too much? ›
It's always a good idea to ask for anywhere between 10% to 20% higher than what you're making right now. You may be able to ask for more based on your performance, length of time with the company, and other factors. Make sure you come prepared when you negotiate your raise and be confident.
Is 10% raise too much to ask for? ›
Aim for a 5% to 10% raise for a standard increase. If you're underpaid or have extra duties, 10% to 20% could be fair. Back it up with research on sites like Glassdoor and highlight your achievements. Pick the right time to ask, like after a big project win.
What is too much to ask for a raise? ›
How much should you ask for? The average pay raise is 3%. A good pay raise ranges from 4.5% to 5%, and anything more than that is considered exceptional. Depending on the reasons you cite for a pay raise and the length of time that has passed since your last raise, you could request a raise in the 10% to 20% range.
What is the #1 rule of salary negotiation? ›
➡️ Articulating with Confidence
Confidence is the linchpin of successful salary negotiation. Articulating your worth involves not just stating your desired figure but eloquently conveying the unique skills, experiences, and contributions that make you an asset to the organization.
Can you lose a job offer by negotiating salary? ›
So, can you lose a job offer by negotiating salary? Technically yes, though it's highly unlikely if you do it right. One thing is for certain: you won't get what you want if you don't ask for it!
What is an insulting raise? ›
Anything lower than 1% that isn't contractually laid out- it's pretty common for unions to negotiate small, but consistent raises like 50 cents every six months, for example- is an insult.
Is 25% too much to ask for a raise? ›
They also found that asking for between 5% and 25% pay increases yielded the most successful negotiations.
Is a 20% raise asking for too much? ›
Typically, it's appropriate to ask for a raise of 10-20% more than what you're currently making. You can also use various online websites that take into account your job title, geographic location and experience level when determining a reasonable raise.
Most companies have budgeted for 3% annual pay raises over the last decade, and most information suggests this trend will continue. This is true for salaried, hourly and executive worker categories.
Why is my paycheck less but I got a raise? ›
There can be a variety of reasons for this, but the most common are taxes, retirement contributions, and health care costs. If you think your pay is wrong, carefully check your paycheck to make sure it is correct.
How much of a raise should I ask for with inflation? ›
"As inflation approaches the Federal Reserve's 2% target, a raise of 3% to 4% starts to look beneficial unless you recognize the compounding effects of inflation over the past two years.
How much is too much to ask for in salary negotiation? ›
Malia Mason and Dr. Daniel Ames found that a useful technique is to offer a range of options, rather than one fixed amount. They also found that asking for between 5% and 25% pay increases yielded the most successful negotiations.
How to ask for a raise when you are underpaid? ›
Undervalued & Underpaid? 7 Essential Steps To Asking For A Raise
- Figure out how much you are worth. ...
- Build your case. ...
- Anticipate objections. ...
- Request a meeting with your boss. ...
- Rehearse. ...
- Know your bottom line. ...
- Don't hand down ultimatums.
Typically, it's appropriate to ask for a raise of 10-20% more than what you're currently making. You can also use various online websites that take into account your job title, geographic location and experience level when determining a reasonable raise.
What is a reasonable amount to negotiate salary? ›
Entry-level base salaries are usually subject to no more than 10 percent of the original salary offered. Note that many top employers have set, non-negotiable salaries at this level. Mid-level positions typically have a negotiation range of between 10 and 20 percent.
How high is too high for a counter offer? ›
The rule of thumb when you negotiate salary with a counteroffer is between 10% and 20% of the offer amount. If you like the job and would accept the first offer rather than pass on the job, a counteroffer of 10% to 15% above the initial offer is not too aggressive.
Is it ever a bad idea to negotiate salary? ›
Key Takeaways. Avoid bringing up salary negotiations in the hiring process until you have a firm offer. Don't try to get one company to match another company's offer. You can turn to a salary website for information, but don't rely only on the estimates for salary negotiations.
