Work and business are inextricably tied to money. We work for pay and daily working life involves monetary transactions: we recommend others for pay rises, we set rates for our time and we negotiate budgets.
Yet many of us feel uncomfortable talking about and asking for money at work. There are many reasons for this but perhaps the most important one is that employees often lack information: we do not know how much we are worth, how much others are paid, how much employers are willing to pay us.
With such a disadvantage, the process of talking about money becomes daunting — at the very least we become unsure of how to start the conversation and what to ask for.
The relationship you have with your employer can exacerbate this information haze. If you have a good relationship with your boss, you may feel that talking about money could damage it, which could then affect both your daily experience and long-term career prospects. Equally, if you do not have a great relationship with your manager, queries about money could jeopardise your position.
Research shows that women may be concerned that asking for money will be seen as pushy. Many people have the sense that (nice) women do not ask for money and, if they do, maybe they are not so nice after all. As such, women may fear a backlash and are often reluctant to ask.
For example, some research looked at MBA graduates and found that women were less likely to negotiate their starting salaries. The women then had significantly lower starting salaries than their male counterparts.
Putting all of this together, it is unsurprising that talking about and asking for money is something many people dread. There is, however, a lot of research that can help us do it more effectively and confidently. Here is the best advice:
1. Get as much information as you can
Arm yourself with information. In salary negotiations, think about what you are worth. This means knowing what those in your position (internally and externally) are paid — online salary surveys can be very helpful, but talk to friends, mentors and contacts who would be comfortable sharing this information. It means thinking about the value you bring in terms of your experience and proven performance.
You also need information about your employer — have others tried to negotiate better salaries and what has the reaction been? Is the company (or unit or team) experiencing growth or decline that could affect its ability to give you what you want? What is company policy on pay?
You may never have perfect information. But the more you can get, the clearer, stronger and more rational your arguments will be, allowing you to present your case with confidence.
2. Consider getting another offer
Even more powerful than information is having another job offer. Although it can be draining to secure interviews and a job offer, having an alternative opportunity is incredibly useful. First, it shows you what the market looks like — are there more attractive options elsewhere or perhaps your current job is actually very desirable? More importantly, an outside offer provides a very concrete and undeniable benchmark of your worth.
3. Think about all the issues
Most of us care about far more than money. So although money may be “king”, reflect on the other issues that are important to you and which you might want to ask about. This could include salary, bonus and incentives (still monetary but performance based), training opportunities and the team you work with. Our happiness is not solely defined by money — maybe you will be satisfied and productive working for the same pay but with other benefits and perks.
4. Prepare thoroughly and make the first offer
Once you have gathered information, considered alternatives and thought about all the issues you want to discuss, consider the minimum you would be willing to accept, as well as your ideal package. Be confident in your preparation and ask for what you want. Although there is often debate about who should make the first offer, research clearly shows that making the first bid allows you to “anchor” discussions in your favour.
5. Think about who to ask and how to ask
A final thought is to consider who to ask. Speak to the person who cares most about helping you and the person who can push for things to happen. With luck, this is the same person. If not, you may have to think about asking the individual who cares about you to help you approach the decision maker. Remember to ask politely and to find a time that is convenient for the other side. As an extreme example, rudely laying down an ultimatum just before your boss has a board meeting is best avoided.
When it comes to talking about and asking for money, we all get nervous and uncomfortable. But you are not alone and can learn from a fantastic wealth of research. If you don’t ask, you don’t get — a trite but true saying, so prepare thoroughly and ask politely.
The author is associate professor of organisational behaviour at London Business School
Get alerts on Office life when a new story is published