ICS Learn

ICS Learn logo

A Business Guide to Negotiating Your Salary & Benefits

If you’ve been living in the UK for the last few months and you haven’t been asleep, you’ll have probably noticed that the price of everything from food and drink to household items has been rising at record levels. 

In May 2023, inflation hit the eye-watering figure of 15.7% : a high that hasn’t been seen in over 40 years. Add to this continued price pressure on practically every type of good and service and it’s fair to say that life in the UK is very hard at the moment, in terms of our finances. 

As the cost of living continues to climb and it becomes evident that some businesses are reaping record profits in the face of widespread poverty, workers have rightly been questioning their current salary and benefits packages, and requesting better ones.

If you’re one of those workers, we can help. In this guide, we run though the entire process of how to negotiate your salary and benefits, covering everything from working out what you’re worth as a worker and creating an official proposal through to arranging a meeting and what to do afterwards.

A Woman Seated At A Desk In Front Of A Laptop Smiling With Her Hands Up

1. Determine what you’re worth as a worker

One of the first steps towards negotiating your new salary and benefits is deciding what it is, specifically, about you as a worker that merits you getting an increase in your pay and benefits. 

This forms the foundation of your entire approach to negotiating a new salary and benefits package, so it’s essential to put some work into examining it.  

To put it simply, what are you currently worth as a worker? You should think about this question in related to things like how well you make profit for the organisation; your contribution to the wider success of the organisation and the value that you bring to your team. The easiest way to do this is usually by sitting down and examining a few key areas related to your professional career to date. Here are some of the key facts to examine when it comes to trying to assess how much you’re worth as an employee:

a. Key skills

What skills do you have that others at your workplace don’t? What are the attributes and knowledge that make you unique as a professional. For example, are you the only person in your department who has a CIPD Level 7 qualification? Or perhaps you have a particularly microscopically detailed knowledge of your organisation’s HR policies? You might even be widely respected by your colleagues as a fountain of professional knowledge? 

These are all specialist skills and aptitudes that could justify a bump in your base rate or additional benefits. 

b. Achievements and value

Are there any specific things that you have achieved during your time working at your organisation that have had a significant benefit on the overall business? Perhaps you helped achieved a bump set of profit returns, or you dealt with a particularly challenging project. Any area where you’ve over-delivered on a task, or you’ve met with success, is something that you can use to demand a higher salary or benefits. 

It’s also useful to think about specific ways that you’ve added value to your workplace? Perhaps you improved your efficiency by X% through sharpening policies, or you managed to boost employee engagement by X% through a new retention programme? 

Think about the ways that your achievements have added solid value to your workplace. Ask yourself the question, “What value would be missing here if I was not here?”

c. Demand of your skills

It can also be useful to think about the specific skills you have that are currently in demand in the wider economy at the moment. In a tight labour market, this demand can be used to justify a better package of remuneration for yourself. 

d. Average salaries of the same/similar role across the country

How much do professionals in the same, or similar, roles across the country earn for doing the same tasks as you? Are they paid more? Make a note of how much your current salary is in regards to the industry average: you can often find that you’re being significantly underpaid – particularly if your salary hasn’t been updated for a while. 

e. The rate of inflation

One of the biggest external economic factors that will probably influence how much your skills and expertise are worth, and crucially, how much you are worth as a worker, is the rate of inflation in the wider economy. 

Inflation refers to how fast the price of products and services rises in the economy. For the last decade, inflation has been relatively steady at an average rate of 1.88%. Over the last two years though, this has rocketed and is now sitting at an average of 10% in the UK. Inflation essentially erodes your purchasing power: it means that you’ll have to pay higher prices for things. When you aren’t getting a corresponding rise in pay, this means that things get more expensive 

Make a note of all of your key findings, take your current salary as a starting figure and try to think about how much each of the elements that you’ve identified add additional value to your offering as a professional. It can be useful to come up with three figures at the end of the process:

  • The best salary/benefits that you can achieve
  • The minimum salary/ benefit increase you would accept
  • An achievable compromise between the two
A Young Professional Working At A Messy Desk

2. Determine what you want

Once you’ve got an idea of what your current worth is as an employee you can then start to look at what you can realistically achieve when it comes to negotiating better remuneration. 

What is the main reason that you’re looking to negotiate a higher wage or better benefits at the moment? For instance, are you looking for a simple salary raise to help you offset the cost of living? Or are you looking for a bump in your benefits package? Or perhaps you’d like an improvement in both. 

Discovering the answer to this question can help you to strengthen your argument and make your salary negotiation more focused, precise and more professional.  

Using the three figures you distilled in the above section (the highest salary/benefits you think you can achieve; the lowest you are willing to accept; and a compromise between the two) you should now start trying to build the basic skeleton structure of your case, and the reasons behind how you have got to the figure that you’re asking for. It’s useful to include things like:

  • Your current salary
  • Your desired salary/benefits package 
  • The minimum salary/benefits package that you would settle for

Of course, the specific figure that you aim for will depend in part on the unique circumstances of your skills, knowledge and experience and the economic situation in your workplace/industry. Naturally, some industries will be booming and have lots of money to splash around improving the benefits of staff, others will be stagnating and less likely to invest in salary/benefits increases.

A Collection Of Money Including UK Notes And Coins

3. Prepare your case

With all of the figures worked out in advance, now is the time to start crafting the business case for a better salary and benefits package, in a digital document or on paper. This is more than a case of just stating facts (although this does form an important aspect of the process) it’s also about creating a persuasive argument that will help you win what you are looking for. 

The exact structure that you use for outlining your case is entirely up to you. It will be based on the ways that you find best to structure your thoughts. Some people might write short bullet points of a list of the key points that define your thinking. Others might write a long essay using full sentences. The exact structure doesn’t matter, as long as it’s something that helps you order your thoughts and set them out in a logical order.

4. Write an official letter detailing what you’re requesting and why

Once you have the basics of all of your arguments and evidence written down, it’s time to start writing an official letter that outlines your request to your organisation and its decision makers. 

The official letter is basically the document that summarises your request, the key reasons and evidence behind it, and the outcomes that you’re looking for. It forms the backbone of the negotiation that you’ll be having in the meeting with your manager or any other key decision maker at your organisation. 

It’s usually at least one side of A4 and follows a structure like this:

Sample salary negotiation letter

Dear Mr Wiggle

I hope you are well. For the last 4 years, I have been a valued member of the department and have truly enjoyed developing my career at the ABC Enterprises.

In that time, I have played a key role in the success of the organisation, helping the business add value to its offering by:

  • Improving employee retention by 35% by implementing a new retention strategy which I personally designed
  • Launching a brand new employee engagement survey platform which helped us to improve employee wellbeing by 125%
  • Spearheading the launch of the Bring Your Own Cat to Work Day, which eliminated the longstanding mouse problem in the office
  • Taken on the additional responsibilities of training new staff members
  • Become a first-aider

To this end, I would like to request a raise in my salary, reflecting the value that I have added and continue to add to the team. I would be looking for my salary to be increase to [Your highest preferred figure]

I would like to arrange a formal meeting with you in the next few weeks to discuss this issue further. Please advise me of the dates and times that would be suitable for you.

I look forward to hearing from you.


Felicity Bottle

This blog by Indeed also has an excellent example of a template salary request letter, as does this article by The Balance Money. 

Two Female HR Professionals In A Salary Meeting

5. Schedule a meeting with your manager

With your case perfected, and your arguments for why you deserve a raise lined up, it’s time to schedule a meeting with your manager or your boss where you’ll discuss the request formally. 

Research suggests that people are at their most receptive for meetings between 10am and 2:30pm each day, so try to schedule a meeting during these times. It’s best to avoid arranging meetings for Mondays and Fridays too because of the proximity of the weekend and the extra workload this generates, so avoid times on these days. 

After all, if someone’s busy and their mind is elsewhere, they’re unlikely to be particularly receptive to your proposal.

6. Meet with your manager!

During the meeting, you’ll present your case to your manager or to the key decision-maker at the company. The meeting provides a format for you to talk through your salary and benefits proposals and for your manager to ask questions. It is a formal space for you to present your proposal and for your employer to listen and ask any questions. 

Remember that official letter that you wrote? This will do most of the heavy lifting during this meeting, so you don’t need to worry about creating new arguments or highlighting new evidence. Just talk through what you’ve listed in the letter in more detail. 

Two Office Professionals Shaking Hands In A Salary Meeting

7. Await the outcome

The outcome of the negotiation usually takes some time to become clear – you won’t necessarily find out whether or not you’ve been granted your requests in the meeting itself. This is because the people responsible for deciding whether to award you a salary/benefits rise will need to discuss their response amongst themselves . As a result, expect to wait a few weeks to hear back about whether you’ve been successful!

Usually, the results of a salary and benefits negotiation are communicated to you via email, letter or a physical meeting. Regardless of the way that the process goes, remember to stay professional, friendly and polite throughout. 

General points to remember when negotiating your salary

a. Be clear about what you’re asking for and use evidence

When it comes to negotiating your salary and benefits, clarity and evidence are your friends. By using examples to support your reasons for requesting a new salary, you will ground your request in reality. This will make it more compelling and persuasive overall, boosting your chances of success. Think carefully about how every sentence you use is supporting your argument. Back up every point you make with clear evidence of what you’ve achieved. 

b. Remember who you’re negotiating with

Often the people that you’ll be up against in the boardroom to argue why you deserve to be valued more as an employee will be people that you work intimately with on a day-to-day basis, like your team leader, your manager or HR staff.

Meetings like these can be incredibly stressful and it’s easy to let your emotions get the better of you during them. Naturally, this can put previously strong working relationships at risk. You don’t want to end up jeopardising your progression in a company by acting overly forceful or rude. 

The way to navigate this tension is to rely professionalism throughout the whole process. Separate fact from feelings and communicate in a respectful, honest way. 

8. Steer clear of ultimatums

Sometimes, delivering an ultimatum to an intransigent boss or manager can have the same effect as rattling a stick around in a wasp’s nest. 

If a negotiation feels like it isn’t going very far, it can be tempting to deliver an extreme ultimatum like “Give me this pay rise now or I walk”. Whilst it might feel great in the moment and help you to express your frustration, an ultimatum is unlikely to focus minds in your favour and has probably already been factored in in your employer’s response to your request.  

Sometimes, it’s better to stay silent and treat the process as a learning experience. If unsuccessful, you can always apply again in 6 months or next year. However, if your salary rise requests keep getting rejected for no good reason, it could be a good indication that your employer doesn’t really deserve your talent and that you would be better served working somewhere that does.

Negotiating your salary and benefits with confidence

We hope that you’ve found the rough steps outlined above on how to negotiate your salary and benefits helpful. Remember, that most salary negotiations are challenging and that the outcome isn’t a reflection on your skill or value as an employee. Hold your head up high, stay focused, and be confident, and you’ll stand a good chance of winning a better salary and benefits package. 

Move up the career ladder with a professional qualification that you can study 100% online, wherever you want.