*I’m back in NYC, but jetlagged like crazy, so my friend the Financial Mechanic is here today to talk about the ever-important topic: how to effectively advocate for a raise! There’s a huge gap in content about making more money, and if you’re nervous about asking for a raise (because yeah, it’s terrifying), then who better to get advice from than someone who’s done it twice? She’s the 25-year-old that I wish I was when I was that age: wise beyond her years and with a clear strategy. Hope you learn a ton from this post, and please comment below with any questions or your own wins! -Luxe*
*Some affiliate links below*
It is all well and good to cut down expenses, but there is another side to the financial equation: make more money!
One way to make more is to ask for more; take it from someone who has negotiated and increased her salary by 27% in three years. I began as a junior engineer, unsure if I was doing anything right, and have since negotiated through three job titles. Advocating for yourself in the workplace is one of the most powerful tools to increase your income. I want to share with you everything I have learned, so that you can earn what you deserve.
What’s At Stake
Luxe did a fantastic write-up on how to negotiate when you start a new job. She also drove home the why of negotiating, and it is worth going over some more numbers. The average person forgoes $7-$7.5k per year when they don’t negotiate their starting salary. This amount compounds each year, so by not negotiating they forfeit $1 to 1.5 million in the lifetime of their career, which equates to 8 years of work. Similar numbers apply if you don’t negotiate for a raise at your current workplace.
Why We Don’t Negotiate
If that much money is at stake, then how come over half of us never ask for a raise? A survey by Payscale reported three main reasons:
1. My Boss Gave Me A Raise Without Me Asking
If you get a raise without asking, that is great! In fact, I got my very first raise and promotion this way. It could mean that you have a really supportive boss who is looking out for you (which was the case for me), but it may also mean that you are leaving money on the table.
Employees that stay with their companies are paid 50% less, which demonstrates that waiting for a raise is a lot less efficient than making a drastic change like jumping companies. While moving companies is often the fastest way to increase your salary, if you enjoy your job and the work you do, it is worth broaching the topic of a raise with your boss. You are in the driver’s seat of your own career, not your manager.
My next boss told me point blank: “If I have two equally qualified people, but one has told me they are interested in moving up, when promotion time comes around I will support the one who spoke up.”
2. It’s Uncomfortable, I Would Rather Not Bring It Up
Our society already treats money as a taboo. We have done away with negotiation in our daily lives; it is now reserved only for buying cars and bumping up salaries. The money taboo combined with lack of practice makes us reluctant to bring up a raise.
When choosing a metaphor to describe the negotiation process, women tend to say it is like going to the dentist while men are more likely to compare it to “winning a ball game.” During my first couple of negotiations, I definitely related to the dentist metaphor. It was an uncomfortable and sometimes painful conversation for me. Doubts pulled and tugged at my words like a hygienist’s fingers.
After a series of raises and promotions, I have come to realize that the difference mostly comes down to practice. My conversations around compensation have transformed from dental demise to a ball game: a field where I understand the rules.
3. I Don’t Want to be Perceived As Pushy
Is a baseball player perceived as pushy when he knocks it out of the park? What about when he steals a base? Negotiating is part of doing business, the same way that swinging a bat is part of baseball.
You are expected to negotiate, so leave “pushy” at the door.
Propose it and prove it, instead. You are asking for a raise and doing the work to justify it. The reality is that you don’t get what you don’t ask for.
Personal Negotiation Results
I saw decent salary growth in my previous job. I switched industries from mechanical engineering to software engineering, so I spent a lot of time researching what I should earn in my new role. Through this process, I took an interest in negotiating and applied the advice from multiple mentors to increase my salary over time.
|TIME FROM LAST RAISE||INITIAL SALARY||RAISE||WHAT I RECEIVED||STRATEGY|
|8 months||$65k||5% Raise + Promotion||$68k||Manager gave without me asking|
|4 months||$68k||4.4% Raise||$71k||Regular review cycle|
|12 months||$71k||8.4% Raise||$77k||Used the methods in this article|
|12 months||$77k||7.8% Raise + Promotion||$83k||Used the methods in this article|
In 3 years, I increased my salary by ~27.7%, an overall increase of $18k. I started my job at a salary way below market-rate, so I had a lot of catching up to do. I am sure that if I had not started conversations with my managers over salary, my growth would have stagnated after the first year.
1. Lack of Introspection
Are you already working at the level to which you would like to be promoted? Why do you deserve a raise? Managers get tired of people asking for a raise for simply doing the job they were hired to do. In order to make a convincing case for your promotion or raise, you should be ready to take on work above-and-beyond your current role.
2. The Coworker Comparison
So you saw your coworker’s paycheck in the copier and realized that he makes $5,000 more than you for the same job. This may be a powerful motivator to ask for a raise, but be prepared to make a better case for yourself. Your proposal should be based on the value you bring. Leave your coworker’s pay out of the equation.
3. Using Competing Offers
One way to negotiate a higher salary is to reveal that you have an offer from another company. If you use a competing offer to negotiate a raise at your current job, be prepared to leave. It may backfire as a technique if you are merely bluffing. You are signaling that you are already making the effort of applying and interviewing and may jump ship even if you do receive a raise or promotion, so some managers won’t bother countering.
Making Your Case
There is nothing wrong with asking for a raise that reflects the hard work that you do, but if you follow some steps the likelihood of success increases significantly.
Imagine two people: Carolina and Jane. They are both powerhouses, performing above and beyond their job title.
She meets with her boss every other week to provide updates on her progress and ends her meetings by asking if she is on track to get to the next level. She inquires about the timeline for a promotion and her boss tells her that March is the regular review cycle. She begins to take on assignments that will help her boss make the case for her promotion in March.
When early March rolls around, she sits down with her boss and reviews the goals they set and the projects she took on. She has proposed a raise and subsequently proved her value, putting herself in a good position for a promotion.
Jane prefers to let her work speak for itself. She meets with her boss intermittently to talk about the projects. However, she tends to cancel these meetings because she has work to do and she doesn’t want to bother her manager.
When March rolls around, she sits down with her boss and asks for a raise. When her boss asks why she deserves a promotion, she answers that she has been doing a good job and thinks it is about time. This is the first time her boss hears about Jane’s desire for a raise, which means it is too late this year. Maybe next time.
There are many ways to make your case for a raise, but the most important is to recognize that it is a process. Your boss should not be surprised when you ask for a raise, and you should not be surprised about the challenges your boss faces to grant you a raise. The best way to navigate negotiation is to create a game plan.
1. Set Up Regular Meetings
Make a set time to go over progress with projects and personal growth with your manager. Now is the time to ask about how your company handles promotions and raises. Some companies have designated yearly reviews and it is difficult to receive off-cycle raises. Oftentimes your manager has to go higher to get approval for a raise. Find out who is responsible for decision-making and how you can help your boss make your case.
2. Find Out If There Is a Rubric (Or Make Your Own)
Some companies and managers have defined responsibilities for each role. Find out if something like this exists. If not, write out the skills you think your position should have, and the skills required of the next level. Confirm these with your boss.
Identify where you are already performing at a higher level. If you can check off some of these boxes right away, it means you are already on track.
Figure out where you need to improve, and make plans to make it happen. When I last spoke to my manager about my career growth, we reviewed the company’s rubric together and identified some areas where I could up my game.
3. Get Your Manager On Your Side
Lots of advice assumes that you make the case for a raise yourself. While it is true that you are responsible for your own progression, your boss can be an ally. If you involve them soon enough, they can help you build a case for a raise.
When I involved my boss in the conversation around my goals, he became my advocate rather than an adversary. One requirement for my next promotion is to take on an entire project by myself. I needed his help to be able to get the buy-in to be a leader on my new team. Together, we made plans to put me in a position where I could take on that responsibility.
6 Months Out
1. Do the Job You Want
Now that you have planted the seed, it is time to start nurturing it. 6 months until your yearly review, or whichever date you set with your manager, you should be easing into the role you want.
2. Keep Track of Your Accomplishments
Start keeping a list of accomplishments where you went above and beyond your job description. Be specific. Make a list of meetings you led, times when you swayed a group decision to a certain choice, or when you checked off a big to-do on your list. Include hard and soft skills. Highlight the duties that added specific value to your company.
Keep track of external validation—positive e-mails from coworkers about your work, quotes from happy clients, anything that recognizes your extra efforts. Don’t be shy about outside endorsements, it is just icing on top of your proposal-cake.
Every day I list what I worked on in a tiny notebook, just a few lines about what I did that day. About once a month I pull the high-value ones onto their own page. Then I pick out the top few and put them on my resume. This process helps me enormously when I have my reviews.
3 Months Out
1. Check-in with Your Manager
Are you still on track? Are you meeting the goals that you set earlier?
2. Check-in with Yourself
What number are you hoping for? In his book Fearless Negotiation, Michael Donaldson identifies the pillars of negotiating: wish, want, and walk. Identify your ultimate salary wish, what you would stay for, and what offer would make you start looking elsewhere. Use resources like Glassdoor, Payscale, and Salary.com to get a feel for the salaries of people with similar job titles.
3. Do Some Calculations
When negotiating, there are multiple ways to talk about a raise. For example, your boss might offer you an extra $2/hour from your starting salary of $15/hour. It may not seem like much, but that is an extra $4,160 per year and a 13% raise.
There are multiple ways to talk about salary, and the framework can switch while you are negotiating. Whether you are offered an extra $1 per hour, $100 per month, $1,000 per year or an annual 10% raise, know the conversions so you are able to keep pace during the crucial conversation.
List out some different scenarios and your responses. Practice on a friend or in front of a camera. When I reviewed practice footage, I realized that when I am nervous I tend to look off to the left—breaking eye contact. It made me look disengaged and did not convey confidence. The enlightening video helped me identify those little things, like eye contact, that make a big difference.
The Big Day
It’s time to step up to the plate.
Timing The Ask
It can be helpful to make your case when the company is doing well or your boss is in a good mood. Gauging the best time depends on your specific company. Maybe you work somewhere with an official review cycle in March. Maybe you work at a smaller company with no such structure. Use this information to set up a meeting, keeping in mind that it often can take weeks before a raise or promotion go into effect.
Since you have set goals and kept track of your progress, you now have solid evidence of your performance. Going into the conversation with these facts and figures can help calm the emotional jitters that often come when asking for a raise. Whether or not you break out the physical evidence, you should at least keep the facts in mind:
- The industry average for the job you want
- Specific numbers of value you have provided to the company. Calculate the numbers and tally up your accomplishments
- A list of external validation
- Your “wish, want, and walk” numbers
Establish that you are meeting to talk about a raise
“I wanted to talk to you about my progress at The Company, and also about my compensation.”
Focus on value
“In the past year I led Project A, which made a profit of $10MM. The total revenue for the Project exceeded the annual target by about 30%. In addition, I introduced employee recognition programs that increased retention by 90%.”
Endorsements from coworkers and clients
“Client A requests me specifically for important projects and Client B left a review citing my professionalism and timeliness.”
What are you going to do moving forward?
“I am committed to see Project A through to the end and doubling sales by the end of the year. I also am picking up Project B, which is projected to save the company $20MM on maintenance costs.”
“I’m excited about the growth ahead of us, and all of this said, I’m interested in reviewing my compensation with you to reflect the value I am bringing to the company.”
Phew, okay, you said it. Now, you have done your research and it’s time to name your ask, which is a bit higher than your actual desired salary.
“I’ve done some research and found that a Director of Finance at a medium-sized company, with similar job expectations, makes a base salary of $120k. Given my goals and my performance thus far, I’m asking that my salary be in line with the market rate.”
Of course, your boss may interject anywhere in this example conversation. That’s where practice comes in handy.
Prepare for a Range of Responses
- I don’t have a final say on compensation. We will have to submit a lot of paperwork; it takes a lot of time and has to go through HR.
- The budget is tight.
- We only have a certain number of promotions available to our team this year.
- We generally only give raises of 5%, your ask for 20% is way above the norm.
- We can offer you a small raise, but that’s it.
Stay calm, be confident in your ask, and get curious. Ask more about who does have the final say, for example. Ask how they got to their number. Ask what else is contributing to their decision.
Then, reiterate your value and your salary target.
“I appreciate that the budget is tight, and I just want to put this in perspective. This year I am responsible for saving the company $20MM and doubling our sales numbers. I’m asking for my compensation to be in line with my contribution.”
You have made your case. If your boss says they will look into it, be sure to establish a time you can follow up with them.
What to Do if They Say Yes
Acknowledge their effort involved in granting you a raise. There is often lots of paperwork, meetings, and follow-up involved in getting an employee a raise.
“Thank you so much for going to bat for me…”
…and if They Say No
Rejection hurts. You have put in all this effort, only to hear that you should try again in 6 months or a year.
Staying motivated after rejection can be tough, but this is a great opportunity to find out what it will take to get a raise next time.
Clarify the ‘why’
Make sure you understand the reasons behind the decision so you can adjust your course accordingly.
Make a Plan and Grow from the No
If you rise above your disappointment and show resolve to improve, it can help your chances for a potential raise down the line.
“Thanks for explaining the reasons for the tight budget this year. I understand that the company had a rough quarter, and I have some ideas for how I can provide value to Project B in Q2. I will write up a proposal that we can review next week in our meeting.”
Talk to a Mentor
A mentor can help illuminate more reasons about why your request was denied and how to put yourself in a better position. I had a mentor who was managing a different department, and I went to him when I received my first promotion. At the time, I was not sure if I should negotiate the off-cycle raise or be grateful for what I received. He explained the salary bands for each position and told me that my boss had gone above and beyond to get me the promotion, so I should express gratitude. His advice kept me from offending my boss who had already gone to bat for me as a new hire. A mentor likely has more perspective into your company and can help guide you in your specific situation.
Think of Alternatives
Maybe the budget really is too tight for a raise, but your boss might be able to provide another week of PTO or some flexibility on working remotely. Perhaps tuition assistance is available. Consider conferences you could attend or ask for reimbursement for joining a professional association (you can network!) Additionally, a title change could set you up for increased pay later on, even if you don’t get a raise to go with it.
Is It Time to Move On?
You have done the research, so you know what you are worth in the market. If you don’t get the raise, it may be worth looking into other opportunities. Make the decision for yourself based on your priorities and growth potential at your current job versus the market.
Asking for a raise or a promotion can seem like a daunting task, but it doesn’t have to be. You are demonstrating your value, proving your capabilities, and asking to be compensated fairly. Using open communication, defined goals, and specific numbers, you can reap the monetary reward for the work you do every day. Your words can speak just as loudly as your actions to get you the salary you deserve.
What are your negotiation wins? How did you navigate your successful negotiation?
Financial Mechanic is a 25-year-old software engineer living in Portland, Oregon. Visit her blog to find out how she’s planning on being financially independent by the time she’s 32.
Feature Image: Pixabay