Skip to content

Strategies for Compensation Negotiation: Are You Underpaid?

Lionseye insights from AC Lion


Negotiating a salary, both when you are looking for a job, and arguably more so when you are currently working in a job, is a sensitive subject. Sometimes an employee can go months, or even years making less than they could have been. Even making one or two thousand less than you should be a year can really add up. That is why it is important to take a moment every year and ask yourself, are you being underpaid?

85-90% of employers do not make their best offer first, as studies have shown. This is not necessary, as employers are conscious of the need to negotiate with prospective workers to find quality professionals. Employers want to leave room for flexibility and negotiation, so compensation packages are seldom rigid. So if you believe that the employer is offering a package that is less than what you are worth, they may just be giving you a low number to start the negotiation process. That is why you should never be afraid to make a counter-offer.



For both jobseekers and current hires alike, it is important to know your worth before starting a conversation regarding salary. For instance, you wouldn’t buy or sell a car or home, without first getting an estimate of its worth.


Unlike cars or homes however, an individual’s salary has been found to have a positive correlation with their self-esteem. According to the study done by the Journal of Economic Psychology:

Those that believe they are worth more, generally are. That is why before you start a conversation with your employer, you need to determine your true worth. While that can be difficult, it will give you the confidence you need to negotiate your desired salary. Here are a few ways to help you find your value as an employee:

  1. Make a list of all your achievements in the past year, and how they have benefited the business. This way, you highlight the value you add to the company, whilst also reminding you of your achievements and boosting your confidence. If you are job hunting, then remind yourself of previous achievements, completed projects and the transferable skills you can bring to the new business. Also, be sure to include numbers, as metrics talk. One trick is to sell yourself to your boss like you would on a resume: a short bullet point highlighting your accomplishments such as, “developed new customer service strategy that increased client retention by 10%” or “increased social media traffic by 55%”.
  2. Speak to others in the field such as recruiters and professional bodies. There are also many websites available that can help. Websites like,, and can offer some valuable insight into company, and role-specific salary ranges. Just remember, it is important to keep in mind that location, company size, and the industry can largely influence salary, so do not be disheartened.
  3. Take into consideration your company’s current situation. If the company is having a bad year due to unforeseen events like a tanking product, or breakout growth of a competitor, it may not be the best time to ask for a raise. Take cues from your surroundings. Is your firm hiring? Are people being promoted? Has there been big leadership shifts or some significant bad press? This is like checking the weather before heading out of your home.

Remember, you’re valuable to them, and it may cost more for them to replace you than to give you the compensation you deserve.


Talking in person still remains one of the most effective ways to communicate. That is why it is recommended for something as sensitive as salary compensation. So make sure it is in person when you speak with your line manager, HR department, or boss. Approach your employer at a suitable moment and ask to arrange a meeting. When approaching your boss, carefully choose your timing.

Do not approach them at the busiest time of the week. Instead, try to speak to them when they’re feeling relaxed.  Ask when it would suit your employer, or give them a range of opportunities when you are available for them to choose from. If you feel that your boss might like some prior warning then mention that you’d like to discuss compensation, but if not, then it is fine to leave the details for the meeting.

Lastly, try to arrange for the meeting to take place in a neutral part of the office, somewhere that the meeting is least likely to get interrupted. If possible, try to get your boss out of the office into a more relaxed atmosphere like a café. If your boss is relaxed, they are more likely to agree with your requests.


Once you finally get your boss alone, it all comes down to the discussion. While getting your boss to this point is no easy task, making the final push for a raise is the most important, and consequently, the most difficult. Here are some ways to help you successfully navigate through the murky waters of compensation negotiation:

Prepare a Pitch – If you think you deserve more money, your boss is going to want to know why that is. So be prepared with specific times that you went above and beyond to produce exceptional results. Make it a point to mention demonstrations of good leadership, boosting sales, saving the company money, or rising above a stressful situation. Promote your worth with as many details, numbers, and facts as you can.

Compare and Contrast – Before speaking to your boss, you should already know how much you want to be paid, and how much others with your qualifications and experience are worth. This makes a great starting point for negotiations.

The Indirect Raise – It is important to stay open to the idea that receiving a raise does not have to be a direct money conversion. There are other ways to save money or make money overall to increase your overall annual income. Don’t be afraid to negotiate for perks like more flexible work hours, stock options, tuition reimbursement, and vacation time. Getting a few extra paid vacation days, some valuable stock, or better health insurance can in some cases convert to more overall compensation than a salary raise by itself.

When All Else Fails – Sometimes, even despite your best efforts, your boss may simply say no. If he or she does, ask why. If they say something like, “There simply isn’t enough money” or, “I can’t justify the raise for the work you do”, suggest that instead of a raise, your boss upgrades your position. Tell your boss you would be willing to take on a bigger work-load or more responsibility if it was accompanied by a raise. If that does not work, simply ask your boss what it would take for you to get the raise. This shows initiative, and that you are serious about providing more value to the company.

Salary negotiation is an important part of being an employee, whether you are seeking work, or a long overdue raise, it is always worth the effort. At worst, you can set a quantified date to renegotiate your salary to your boss, at best, you may find yourself with more benefits, a better job title, and a higher salary.