Do you wish you made more money?
It’s common to look around and feel like everyone else is earning more than you. This can bring out a lot of uncomfortable emotions: Envy, resentment, anger, and even shame.
How can you ask for more, without being ungrateful for what you have?
And how can you figure out what’s fair? People often exaggerate their wealth and financial success—especially on social media. Your co-workers probably don’t want to talk about their wages. Your manager probably won’t volunteer that the salary you’ve been getting for years is below market rate in your area. And your friends and family will struggle to have honest conversations about money without hurting anyone’s feelings.
A lot gets wrapped up in the notion of “a great job.” And it’s more than just money: Stability, passion, opportunity, flexibility, independence, relationships, and even feelings about “doing the right thing” affect how satisfied you are with your job and career.
But if pay and other financial benefits weren’t important, we would all work as volunteers!
No matter where you work, your pay is inevitably linked to a (often very abstract) measure of your value to your employer.
In some industries, this value calculation is pretty straightforward:
- For consultants with billable hours, your billings should be some multiplier more than your salary.
- In sales, your bookings should be some multiplier greater than your salary and commissions.
- For “on premise” workers, like in restaurants and retail, the cost of “paying you to wait for customers” should always be less than the potential earning opportunity that those customers would bring.
But in many sectors, “the value you deliver” is more complicated. And even in the above situations, “good workers” deliver intangible value that doesn’t always get wrapped up in financial models. For example, “extremely satisfied” customers are more likely to bring return business than “mildly satisfied” customers. And that’s not always considered when it comes to pay, either.
So when is it time to ask for a raise?
And how do you get started?
And what if it doesn’t go well?
Read on to find out.
Before you storm into your manager’s office, demand a pay raise, and threaten to quit, there are 3 key facts you need to keep in mind:
- No one likes to have uncomfortable conversations.
- Hiring and training employees is expensive.
- Changing jobs is risky.
With that in mind, you should recognize that a salary renegotiation is just that: A negotiation. A complicated series of factors come into play, for you, for your negotiating partner, and for the business as a whole. Some of these are predictable, and some are not. In salary conversations, policies will be oversimplified, excuses will be made, and facts will be exaggerated. Feelings might get hurt.
So before you get started, put yourself into a strong negotiating position. Understand the status of the business, and the labor market in your area and in your industry. Consider your pay in the context of “who would they hire to replace you”, and “what new job could you get.”
But don’t sell yourself short!
- 23 percent of employees aren’t sure if their pay is fair
- North America is currently experiencing a significant shortage of skilled labor
- Productivity keeps going up while wages have stayed flat, and minimum wage has failed to keep up with living costs
- Business profits keep breaking all-time highs
Your time, labor, and experience have value. So get ready to ask for a raise. And if you get turned down, get ready to pursue new opportunities.
What to do when negotiating a raise
1 – Know your worth
Undervaluing oneself is one of the most common mistakes employees make. Even if you’re new to the field, you can still negotiate a fair starting wage if you know what you’re worth. To begin, look into the area wage, cost of living, and the specifics of the position you’re interested in.
Glassdoor is a fantastic resource for determining your worth. The website includes a “know your worth” calculator that allows you to evaluate how your income compares to that of others in your field. It isn’t gospel, but it is useful and will give you a good sense.
2 – Track your accomplishments
You should always track your accomplishments regularly, however, many employees fail to do that. But that’s not your problem, and if you track your accomplishments, you’ll have a stronger chance of negotiating a good salary raise. You might be wondering, what do you mean by accomplishments? Here are some examples!
- Make documentation whenever you get positive feedback
- Keep a list of daily or major successes
- Write logs of tasks you perform, especially when they benefit others
- Refer back to new ideas and efficiencies that you created
You need to prove your worth to negotiate your salary, and challenging yourself to keep track of all of your achievements is imperative.
3 – Consider bonuses and other options
Often management will push back against requests for pay increases: It’s not in the budget, it wouldn’t be fair, they don’t have time to get approval.
But you have compensation options available outside of your regular pay: If you can’t negotiate your salary, negotiate for a cash bonus, increased vacation time, promotion, or employee equity (like stock options).
It all comes down to satisfaction: What do you need to be happy? Ask for it.
4 – Stay positive
Perhaps most importantly, you should stay positive at all costs. Don’t dwell on problems: Look for solutions.
It’s critical to avoid getting frustrated. Although it’s demoralizing to be told “no”, keep going. This probably won’t be solved in a single conversation. And if you can’t get a “yes” from your employer, talk to other employers about your needs, and see who might be willing to offer what you’re asking.
What to avoid when negotiating a raise
1 – Don’t let your emotions get the better of you
Your most important task when negotiating a salary raise is staying calm, collected, and driving results based on decision-based negotiating and not fear-based negotiating. Build your case based on your value to the company, and why you deserve the raise based on what you bring to the organization.
Unfortunately, although it’s important to you, management won’t care that you need extra money for bills. Do your best to stay clear of strong emotions, and instead focus on your skills and brilliance.
Because negotiations are uncomfortable, your manager might try to get out of the conversation. That’s okay! Get a commitment to another meeting time, or their support when you speak with someone else.
2 – Don’t compare yourself to others
Whatever you do, try to avoid comparing your salary to your colleagues’ salaries. For example, even if you believe you work harder, drive better results, and deserve better pay than your colleague who earns more, avoid mentioning it.
You should always make your performance about yourself and why you deserve a raise. Nobody else matters in the conversation.
(Though if an employee performing the same job is earning more money, the business needs to be able to justify that! It’s not up to your manager—it’s a matter for legal counsel and for HR. Don’t let yourself be a victim of illegal discrimination.)
3 – Don’t try to impress your manager
This advice might sound counterintuitive, but you should avoid trying to impress your manager. Don’t be boastful or pretentious. Show that you’re a team player. Stick to the facts.
Remember, the goal isn’t to show that you’re a great person. It’s to show that you’re a valuable employee. Don’t let your ego get in the way.
Time to look elsewhere?
At the end of the day, it’s true that some businesses, and some entire industries, just don’t have money available to increase employee compensation. Sometimes “no” really does mean “there is no possible way to make anything like this happen.”
You can’t take that personally. But you can’t take that on. The skills and experiences you have at work do transfer to other professions. You just need to position them the right way, and maybe adding a few more tools to your bag of skills.
If you’re in a dead-end job, you need to look elsewhere.
Trust your instincts. What does the future look like for this company? Is there a similar company with a more hopeful future? There’s a narrow line between being patient, and being strung along. And there’s a narrow line between “an okay place to work” and “exploitative underpayment.”
Bonus resource: The Complete Guide to Changing Careers.
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