We could all use more money and asking for a raise is one way to get more. But you have to go about it the right way. Here are 9 ways to get a raise.
If you’ve been given a raise in the past twelve months, good for you! But not everyone can get a raise, 14% of Americans don’t get an annual raise. Are 14% of us lazy and undeserving or a raise? I don’t think that’s the case. I think a lot of us don’t know how to go about asking for a raise or asking in a way that will garner a positive response.
If you haven’t had one in the last year or longer, use these 9 ways to get a raise.
1. Know Current Market Value
If you’ve been with your current company for a few years or longer, the market has changed since you negotiated your starting salary. If you negotiated at all. Many people just take whatever salary and benefits are offered, especially those who are young and just entering the job market or those who have been looking for a job for a long time.
Those two groups are often so grateful to finally land a job that they’re happy with whatever their new employer offered. Maybe your salary offer was good, and maybe it wasn’t. Either way, if you’ve been with the same company for a while, you need to know if you’re making what people with similar experience, in similar companies, in similarly sized cities are making.
If you aren’t making that much, you aren’t paid market value for your position. There are sites where you can easily find this information.
Salary.com is really comprehensive. It lists every position in every field that has publicly available salary information. It also has a cost-of-living calculator so you can see the numbers for your area. If you’re a teacher in Biloxi, Mississippi you can’t compare your salary to a teacher in Greenwich, Connecticut due to the vast difference between the cost-of-living between those two places. The calculator will make the adjustment.
Glassdoor not only has salary information but a ton of reviews from current and past employees. Money isn’t everything, even when it comes to our jobs. The kind of environment and culture within a company is essential too as any of us who have worked in a “toxic” workplace know too well. The reviews at Glassdoor give you the low down on that kind of information.
You can also find typical interview questions some of the companies listed ask potential employees which is great if you’re going to get one of those weird (and dumb!) curveball questions like, “What is the color of success?” you’ll be prepared with more than a blank, unbelieving stare.
PayScale is the best place for recent college graduates to research potential employers. The site can give you a salary estimate based on things like your level of education and any experience you have as well as salary data for various jobs.
You need to know what others in circumstances similar to yours are making, so you understand how much of a raise to ask for. If you just walk into your boss’s office and ask for a raise, you might get the average 2.6% which might bring you up to level but might not.
Either way, you have to know, and these sites can tell you.
2. Understand Your Company
It’s not advised to ask for a raise more than once a year outside of a few specific circumstances so if you’re reading this and thinking about asking for a raise; you’ve been around long enough to glean a few things.
Who do you ask for a raise? Your boss, his or her boss, the CEO, someone in the Human Resources Department? It takes a lot of nerve to ask for a raise, so you don’t want to ask the wrong person and then have to ask twice because you have to ask someone else.
When is a good time to ask? Do you have quarterly or yearly reviews? That might be a good time. Do you have a super busy time of year when everyone is working long hours and are short-tempered? That might be a bad time to ask for a raise.
3. And It’s Health
Depending on the size of your employer, this information might be really easy to come by or rather difficult to come by. If your company is publicly traded, there are all kinds of financial data available including its annual and quarterly reports. In those reports, you can see the company’s balance sheet, income statement, and cash flow statement.
If you work for a really small employer, particularly a family run business (not your own family) you might not have access to financial documents but you may spend a lot of time around the owner or owners of the business and may be able to extrapolate how well or poorly things are going just by being observant.
Or you may have direct experience of how things are going, especially if they aren’t going well. Have your last two paychecks bounced? Has your health insurance been canceled? Then things are probably not going too well financially.
It’s the medium-sized companies that are probably the hardest to get financial information on. You’ll have to be extra observant or maybe make friends with someone in accounting, take them out for happy hour and see what you can find out!
If your company just had a record quarter, a good time to ask for a raise! If your boss’s wife triplets just got accepted to Harvard, probably a bad time to ask.
4. Know Your Number
Your goal isn’t just to get a raise. A 2.6% raise isn’t even going to cover inflation never mind make any real impact if you’re trying to do something like pay off debt, save for a downpayment on a house, or increase your retirement savings. If your research showed that you are not making what someone in your position, with your experience, etc. should be making, your minimum goal should be to get a raise big enough to bring you to that.
If you’re already making what is standard there is nothing wrong with wanting more. If your company was making as much money as their direct competitors would they think that was good enough or would it want to make more? Well, you are your own individual company. Just as it’s the CEO of your company’s job to increase profits, it’s your job to increase your own profits.
Whatever the case for you, you have to know your number going in. What is the amount that you’ll be happy with? Within reason, of course, we’d all like a 100% raise, but unless you did something pretty extraordinary, that’s unlikely.
A good rule of thumb is to ask for 10% to 20% more than you’re making currently. Anything less isn’t going to be that impactful on your finances and much more is probably going to get you a flat “No” or even laughed out of the office.
Your number doesn’t have to be a “hard” number meaning that if you don’t get that exact number that you won’t be happy. But you should have a range based around a hard number that you will be satisfied with.
5. Make Your Case
Why should you get a raise? Being on time every day and rarely missing work arent’ really good reasons for getting a raise. Those things are just bare minimum standards. If you want to get a raise, a good one, you’ll have to show whomever you’re asking why you deserve one.
Have you saved the company money, made it money, created a system or innovation that has increased productivity? Do customers regularly rave about your level of customer service and continue to patronize the business partly based on it? Have you taken on projects that no one else wants to do? Have you done things that make your boss’s job easier? Have you had additional training or education that have increased your skill set or level?
These are the kind of things you want to go into your meeting armed with. If you can back your claims up with hard numbers, even better. You have to show that you add value to your company.
Your boss is going to low ball you no matter what you ask for because his or her job is to make and save the company money. Giving you a big fat raise isn’t going to do either. But another part of their job is (hopefully) to keep skilled, dedicated employees. Any good leader will be well aware that it is much cheaper to retain a good employee than to lose them and have to go through the process of finding, hiring, and training a new one.
Your boss, unless he or she has been on the job for one minute, is going to know that the best strategy is to ask you what you think a good raise would be. This is a trap! Your boss might think 15% is fair, but you were only planning to ask for 10%. Turn the question around.
Ask based on the evidence you presented what he or she considers fair. This is basically going to come down to a staring contest, the first one to blink, or in this scenario talk, loses. Ask the question and then stop talking. It won’t always work, but you don’t want to make it easy for your boss to low ball you either.
What if your boss offers that average 2.6%? Point out that the current rate of inflation is 2.3% so what you’re actually getting is a 0.025% raise! If you were making $50,000 a year, that would be a really underwhelming $1,250 a year or an extra $24 a week. And those numbers are before taxes!
And point out the real numbers of hiring a new employee. On average it costs a company more than $4,000 and takes 42 days. Not to mention all of the hassles; interviews, second interviews, background checks, starting all over if a new hire quickly proves to be a bad choice.
Surely a 10% to 20% increase for you is more cost effective.
7. There’s More to Life Than Money
Raises show up a company’s balance sheet, so employers like to keep them low. But they may be more generous with benefits that aren’t strictly dollars and cents.
Ask for more vacation time or some paid vacation time if yours currently isn’t. Ask for additional personal days. See if you could get a more flexible schedule. Maybe you would prefer to work ten hours a day four days a week. You’d still be working the same number of hours, but you could get a three day weekend every weekend! Or perhaps you’re okay working five days per week but would prefer to start and leave earlier. Or start and leave later.
Perhaps you could telecommute a few days a week. This one won’t make you any more money but going into an office every day has expenses (commuting, lunch, dry cleaning business clothes) and if you can do those things less, it’s more money in your pocket.
8. Getting Past No
Anytime you ask for a raise you have to be prepared to hear “No.” You can’t just accept that answer and slink away. You need to ask why your request was refused and what you can do to get a “Yes” in the future.
Ask what you need to do in order to get a raise. Take on more projects, increase your sales by 10%, get additional training or certification? Could the two of you meet again in six months and discuss it again, after you’ve met the requirements your boss asked you to meet?
Your boss might be honest with you and tell you that things are tight right now but after the third quarter they should improve and you can discuss it again.
While all of those things are not the “Yes” you were hoping for, they are reasonable answers in most cases. And they weren’t definite refusals so long as your raise can be considered again in the not too distant future.
9. Be Ready To Walk
On the other hand, if you made a good case and objectively deserved a raise and your boss both fails to give you one and fails to give you a legitimate reason why, you might need to leave for greener pastures. Never threaten it though, not even as a negotiating tactic. Once a company knows you’re looking to leave, they aren’t going to be willing to invest much of anything in you.
So not only will you not get a raise, you aren’t going to get the good assignments, the good customers, the additional training, etc. True or not, they are going to treat you like you’ve got one foot out the door if you pull that stunt.
Start updating your resume, start networking every chance you can, and make it your second job to start looking for a new, better opportunity.
And you’re likely to get a much better pay increase when you get a new job than you would have gotten at your current one. The average increase when changing jobs is between 10% and 20%. In fact, you should be changing jobs a lot if you want to increase your income. Those who stay in the same job longer than two years make 50% less over the course of their careers than those who change jobs frequently.
And remember that you are rarely in such a good position to negotiate as when you’re being hired for a job. When you’ve already been working for a company, they already have you, so they have less incentive to give you a raise. But when you’ve been offered a job and not yet accepted, they want what they don’t yet have, you!
Don’t just jump on the first offer. Negotiate for what you want and what you deserve, including the kinds of non-monetary benefits we talked about earlier like extra vacation and flexible hours.
You’re The Boss
You are the boss of your own personal finances, and it’s your job to make more money for your “company.” Work hard so that you deserve what you’re asking for and never be afraid to ask for it. That’s what any good CEO would do.