Money Rehab with Nicole Lapin - Can I Use Another Job Offer In a Raise Negotiation?

Episode Date: September 8, 2021

If you get a job offer from another company, can you really use it as leverage to negotiate a raise with your current company? Or is that just a red flag for your employer? Today, Nicole breaks it down. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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We all do, right? The big question is, how do we make it happen? A lot of folks will tell you that you can use a new job offer as leverage to ask your current employer for a raise. But does that actually work? Today's money rehabber, Simon, wants to know. Here he is. Hi, Nicole. So I've got a question or perhaps two questions. I'm currently employed for a company that has been hit pretty hard from the pandemic. I got some extra time off. And so I use that extra time off to work on another small startup, not my own, but just helping out. There's a chance that they're going to offer me a position.

Whilst the industry is better in the startup and more accustomed to my long-term goal, I quite like my current position if things improve and maybe if I could get paid a bit more. So I'm wondering if I can leverage the offer and maybe bring it up to my current boss to see if my main employer will offer me a counteroffer. Ah, Simon, I wish there was a one-size-fits-all answer for you. But as I can tell from the fact that your friends have even given you different answers, the efficacy of this move really depends on your work situation. It is true that if you tell your company you got another job offer, it could signal to your employer that you're looking elsewhere.

Then they could start thinking of you as a short-term employee, here for a good time, but not a long time, and looking for the next big opportunity. You don't want your employer to think of you this way. Your employers are more likely to give you more opportunities at that job if they think of you as a long-term investment. That said, I do think that a new job offer can be excellent leverage. You just need to approach it delicately. But a word of caution, you should factor in the possibility that this conversation may affect your relationship with your employer. Or be prepared for your employer to call your bluff and tell you, go ahead, Simon, take that offer. Bye. Don't let the door hit you on the way out. That's why you

should never make up a second offer if that doesn't exist for everyone else out there. Simon, I hear you when you say that you're happy in your current role. So I would only have this conversation if you accept the possibility that this talk may change your dynamic at work. I know that sometimes when companies say, we would love to give you a raise, but we can't. Our hands are tied. That was a dramatic rendering of what an employer might say. It's a lot of BS, honestly, and I can say that as another employer. But because you mentioned that your company was hit during the pandemic, that answer, while it still feels like BS,

may actually be the truth. However, I am always an advocate for asking for what you deserve. And Simon, if you have been killing it at work, and be really, really honest, have you been killing it at work? Then you deserve a raise. So let's talk strategy. Here are the three steps I would recommend. Number one, do your research. When you're preparing to talk to your boss, don't go into the conversation without backup. And no, I don't mean a hype squad that's going to cheer you on during the conversation, although that would be awesome. And if you came in to ask me for a raise, you would get one, but it's probably not appropriate for every work situation. When I say backup, you want data supporting that what you're asking for is reasonable and justified. So talk to friends in similar industries to see what they're making,

and then find averages for your industry and level of experience on sites like payscal.com and salary.com. These sites allow you to search geographically, which is important as you decide what you need to live on specifically in your area. Once you've done your research, shoot for the high end of the averages you find. I mean, why not, right? But you should be clear if you're asking for a raise or a promotion. If you're asking for a raise, you should know that your employer likely won't give you anything more than a 3% increase of what you're being paid now. If you're looking for more, something closer to 10% or even 15%, then you should probably be

asking your boss for a promotion. If that's the case, you'll need to justify this proposal with extra evidence that you're either going above and beyond your job title or you plan to do so. Hold on to your wallets, boys and girls. Money rehab will be right back. Now for some more money rehab. Number two, set yourself up for success. Think very carefully about the best time to approach your boss. 5.30 p.m. on a crazy busy Monday? Probably not the best time. 5.30 p.m. on a summer Friday? Hard no. The same day your boss has a one-on-one meeting with your CEO about budgets? I would steer clear of that time as well. Actually, steer clear of any day your boss has a budget meeting. Even if a budget meeting goes perfectly, they are really fucking stressful.

So instead, shoot for a time you know your boss is going to be in a good mood. Is there a team birthday on the books? A pitch you know is going to go well. That is a great time to make your move. Next, tell your boss that you're going to put some time on his or her calendar to talk about a growth plan. One of the key ways to protect your relationship with your boss during a race negotiation is to convey that this conversation is about more than just money for you, even if it's not. That's why I like calling the conversation a growth plan. From your boss's perspective, giving you a raise is basically your boss advising your company to invest in you. A conversation on a growth plan implies to your boss that you're planning on staying with the company, that you want to grow in your role, and therefore want to increasingly add value to the company.

Using this language will also curb your boss's assumptions that you're looking at other offers because you're trying to abandon ship. Plus, putting time on your boss's calendar and setting the topic for discussion in advance will force you to have the conversation, even if you're tempted to chicken out. Number three, have the talk. So here's the good news. The fact that you're getting other offers from other companies shows your employer that you're valued. That's like dating, right? Once you know that other people are interested in the person you're dating, you're all of a sudden way more into them. You know what I'm talking about. It's the same psychology here. People just aren't that complicated. In your conversation, you want to take every opportunity to demonstrate that you're putting your work community first.

Simon, this tip is specifically aimed at that nagging concern about souring your relationship with your boss. After all, the numbers on your paycheck may, hopefully, change, but you're still going to be working with the same folks. The key here is to frame the discussion around your role in the company. Think of yourself not as a single moving part, but as a valuable asset to the company at large. Demonstrate how your performance has positively impacted the company. When you broach the topic of the other offer, be transparent about what this other company has offered you. Follow that up quickly, though, by affirming that you're committed to your current job.

Talk about what you're looking forward to accomplishing at your company in the upcoming months or years. Mention specific events you're excited about and long-term projects that you want to see through. The glue that holds this conversation together is reiterating why you want to stay with your company. You want to avoid language that sounds too explicitly like an ultimatum or worse, a threat. It will not work to say something like, if you can't match this offer, I will have no choice but to quit, Jerry Maguire style. You also don't want to make the phrasing

too emotional or egocentric. You obviously don't want to say something like, I'm frustrated because you clearly don't recognize how phenomenal I am. This is how Beyonce must have felt when Jay-Z cheated. I deserve to be paid above average because I am above average. No, no, shut that entitled shit down. Instead, say something like, I find the work I do with you very fulfilling and I want to stay here. But hearing the offer that I got from XYZ Company affirmed the value of my skill set is higher than what I'm being paid now. I really want to find a solution that works for everyone, one where I can continue to excel here while earning the industry standard for that work. Finally, let your boss know that you respect his or her opinion by concluding with,

what do you think? If your boss says the company still isn't in good enough financial standing to offer you a raise, ask if you can put time on his or her calendar again in six months to reevaluate. Generally, I like to have three plans because I'm an overachiever. So the first one would be just money. The second one would be money and some perks. And then the third one would be just a perks option. Now, bonus points if you can talk about how a project you're working on is putting the company back on track for financial stability. You want to show the company that you are making money.

This is a company, not a charity. And how that project specifically will give the company greater ability to spend on its employees. For today's tip, you can take straight to the bank. Make a one sheet recapping the raise you're asking for, your industry average on salary ranges, and some highlights from your time at your company. I mean, you put one sheets together for clients. You should put a one sheet together and take it seriously for yourself. Once you've talked to your boss, give him or her that

one sheet to keep. If your boss is going to bat for you with HR, let's say, it's really helpful for them to have something to reference and let's face it, jog their memory if they don't entirely remember all the killer points you made in your meeting. After all, they're probably busy making a one sheet of their own. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all. You spend my money, money, money. You spend my money, money.

You spend my money, money, money. You spend my money, money, money.