Here's a scenario you may be familiar with: You've been working at the same place for over a year. You like the job, you have a good boss, good co-workers, and the pay… well, the pay could be better. It's not that you can't make your rent and live comfortably, or that you're totally bored at work. More like, you're taking on more work and have established yourself at your current office. And maybe, a recruiter has reached out to you, or you spy a job opening at a place that'll offer you similar responsibilities with the same or even more pay. You think, well, there's no harm in going in for an interview — and then you get an offer on the table.
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If this scenario sounds familiar, it's because a lot of us have been in that exact situation. You aren't technically unhappy with your job situation, and if another door opens, what's to stop you from jumping ship? But what if you could somehow have the best of both worlds — the same community and leadership role at your current place, plus potentially the pay bump that would happen if you accepted that other offer? Here we get into the delicate dance of pay negotiation vis à vis competing offers.
One of my favorite pieces of money-related writing is Nicole Cliffe's treatise on how to negotiate the best possible deal for a car without talking to a person. While in the case of negotiating a pay raise, you almost definitely have to meet your manager/boss/HR person, in person, the same mentality should apply. By assigning yourself worth via an outside offer, you automatically have a figure you can bring in when discussing a raise. After all, this is the number one question we all have when we start thinking about changing our salaries — what do we deserve? It's a tricky question, and one that a job offer must intrinsically answer. If your negotiator immediately challenges the fact that you could ever look for another job, in all honesty, that may be a signal that the offer couldn't have come out at a better time. But chances are, they'll take that information simply as fact.
With the offer in hand, enter negotiations with a firm understanding of whether or not you even seriously consider it. Even if you really just strictly want to negotiate a raise, you should still be prepared to face the fact that a raise isn't a guarantee, even if your peers and superiors value you, even if your manager assures you that they "really wish it were possible." Maybe this financial quarter is tight, maybe there are shake-ups happening in your department, or at your current employee level. There are plenty of reasons you can be given for not receiving a raise, and if a raise is all you want, there are similarly plenty of reasons you should be more coy as to whether or not you actually want to stay. This isn't to say that you should "fool" your fellow negotiator into thinking that you're halfway out the door already, but that you should know your feelings about the pay raise. You don't want to have second doubts about your decision, whatever your decision is, when you're in the middle of a negotiation.
Here are some examples of language to use when meeting with HR to discuss the matter:
"I am happy here, but I find myself entertaining other offers with a higher salary."
"I am eager to take on more responsibility and earn more; another company has offered me both."
"Staying with this company is my first choice, but I've been offered a large salary increase/perks/whatever."
The idea is to compliment your current boss and situation, elegantly mention the competing offer, reinforce your desire to stay with the company, and then leave the decision up to them.
And of course, if the raise doesn't happen at that time, don't dangle the threat of leaving to try and speed up the raise. Similarly, don't keep the place that made the offer in the first place waiting for too long. Part of this is a courtesy thing; the hiring process can be arduous, and no one, including you, should be wasting that time. But going back to the previous point, if the money alone is the most important thing to you, that makes you inclined toward a particular line of thought and action. If it isn't, and for most people, it isn't, you'll approach the negotiation process with more inherent flexibility. The trick is in establishing and keeping to the boundary you set for yourself: Do I stay or do I go? What am I worth, both in the money I'm making and the money I'm being offered, and to myself? Getting a job offer affirms some of those things — but the rest, the conversation you have with yourself and your negotiator, is up to you.