Want to make more money than you're currently making? If your goal is to stay in your current job, working for your present employer, you'll need to ask for a pay raise. Other than the once-a-year across-the-board raises and the occasional bonus or profit-sharing check you may receive, asking for a salary raise is the only way to seek a higher amount of pay.
Planning and preparation are key when you ask for a pay raise. When you ask for a raise, you need to convince your employer that your contribution to the work of the company is worth above and beyond the usual annual pay raise of, on average, 2-4%
In addition to the planning and preparation, the timing of your asking, your employer's current pay practices, the eligibility of other employees for contribution-based pay raises, and the market-based pay rates for your job in your location are additional pieces of the pay raise puzzle. They all play a role when you decide to ask your employer for a salary raise.
If you take these factors into consideration and address the pay raise from the perspective of how your work adds value to your employer's business, you may succeed in asking for a pay raise. Take a look at all of these tips so you can obtain the salary you believe you deserve.
Good News About Asking for a Pay Raise
According to the Wall Street Journal regarding 2019, "U.S. wage growth is set to pick up over the next year, as economists expect a tight labor market will continue to push up workers’ pay. Most private-sector forecasters surveyed in recent days by The Wall Street Journal—63.6%—expect wages will grow at a somewhat faster rate over the next year, while a further 5.5% of economists said wages will grow at a substantially faster rate."
"Workers who earned $150,000 or higher annually received the amount they requested 70 percent of the time, compared to just 25 percent of those who earned $10,000 to $20,000 annually," according to PayScale, a compensation software and data company that conducted the poll of over 160,000 people.
Nearly 40% of the people surveyed said that they got what they asked for in their increase. Another 31% said they got less. PayScale reported that the most common reason employers said no to a requested raise was due to budgetary constraints—a rationale that many respondents said they didn't believe.
Employers might currently be more open to granting a valued employee a pay raise. Consider asking.
"In this tight talent market, even more organizations (66 percent) called out employee retention as a major concern, compared to 59 percent for 2018. A whopping 47 percent of human resource and business leaders–the largest proportion for any answer option—say that the strong job market has increased their turnover rate."
Steps in Asking for a Pay Raise: Research an Appropriate Pay Raise
Your goal at this step in asking for a pay raise is to know your employer's pay practices and the market pay rate for your job.
- Familiarize yourself with your employer's pay practices. If the standard practice is to offer salary increases once a year after an annual review, you are unlikely to receive a raise at any other time. If your company offers more frequent increases, you'll have more luck asking for a pay raise. Listen to what your employer says about pay raises. For example, if the employer announces that the pay raises will be 4% across the board, you are unlikely to negotiate more money.
- Research the market pay rates for your job. Getting information has never been easier, although you'll want to take care when you use online projections and salary calculators. They rarely reflect your local market conditions including the number of open positions in your area. If you are already paid above your market pay rate, negotiating a pay raise can be difficult.
- Read your employee handbook. The handbook may present the process whereby pay raises are granted. If a policy or a process exists, your best bet when asking for a pay raise is to follow the process exactly. If the handbook states that your employer will only offer a pay raise annually, you may put in time and energy to prepare to ask for a raise that is not available. (Many reasons exist for a policy such as this including equitable treatment of employees and the inability of managers to fairly handle pay raise requests and fairly differentiate among employees.)
- Network with other employees in similar jobs in similar industries to determine your salary competitiveness. Professional associations also do salary surveys and provide networking opportunities with people in similar jobs.
Prepare Your Presentation for the "Ask for a Pay Raise" Meeting
Once you've done your pay research in the above steps, you should have a good idea of how competitive your pay is in your industry. Next, you need to look at your work contributions to determine how you will present the request for a pay raise to your boss.
Or perhaps you've determined that your pay is competitive. Ask yourself why you deserve a pay raise because you will need good data to support your request for a pay raise. Determine whether the topic of the meeting you schedule is to ask for a pay raise.
Maybe it's smarter to ask your boss what you need to do to qualify for the highest possible pay raises and bonuses in the future if you cannot justify a higher salary now.
- Make a list of the goals you have accomplished for the company. Determine how their accomplishment has helped the company. Document costs savings, productivity improvement, superior staff development, important projects achieved, above-the-call customer service, and ways in which you have contributed more than your job required. Documented, these accomplishments may justify a pay increase.
- Make a list of any additional responsibilities you have added to your job. An increase in responsibility, more employees, managed on your team, or special projects are often grounds for an increase if you ask.
- Set a pay increase goal, in your mind, that appears to reward the contributions and additional responsibilities you have documented. Use all of your earlier research to make sure that you are asking for a pay raise that is reasonable for your job and performance and justly deserved.
- Learn about negotiation from books, resources, networking, and friends who have successfully negotiated a pay raise.
- Set up a meeting with your immediate manager or supervisor to discuss your compensation. You will not want to ambush your supervisor or blindside her. Additionally, if the manager is unprepared to discuss an increase with you, nothing will happen at the meeting. Your boss will also want to do his research with the Human Resources staff and his own industry sources.
Learn More Tips About How to Ask for a Pay Raise
A successful negotiation for a pay raise is always based on your merit and accomplishments. A successful negotiation is never based on why you need additional money. While your employer may care about you, providing additional money to fund your chosen lifestyle is not their responsibility.
- Be straightforward in addressing your request for a raise to your manager. Tell the manager you are asking for the raise at this time because of the accomplishments and contributions you have made, and the additional responsibilities you have taken on. Be prepared with your documentation.
- Tell your boss the specific pay raise you'd like to see. Be prepared to present your research that supports your request. It includes your industry research, salary range research, and proof of your measurable contributions.
- If the boss tells you he cannot provide a pay raise currently, ask what you need to do to make yourself eligible as soon as pay raises are available. Remember that a difference exists between an employee who is performing the job as expected from a superior performer and an employee who is truly giving the employer superior performance. Pay raises are based on the second.
- If you are using an offer from another employer to negotiate a pay raise with your current employer, be prepared to fail. Many employers have a policy of not outbidding a prospective employer. Plus, in your negotiation, if the employer learns that you're looking for a new job then career development, training, plum assignments, promotions, and other opportunities may cease to come your way. It can occur even if you receive the requested pay raise. The employer hates to be held hostage—and the employer will remember. It's a vicious cycle, once begun. Why go there?
- Likewise, threatening to quit if you don't receive a pay raise is counterproductive and unprofessional. Plus, the employer may take you up on your offer. Instead, quietly and professionally go about your job search, if you have determined a pay raise merits changing employers.
Even With Proper Preparation, Asking for a Pay Raise Is Scary Territory
Requesting a pay raise, even when you have planned and prepared, can still be somewhat scary. Asking for a raise without planning and preparation is a crapshoot. Plus, you've wasted your best shot at getting the pay raise. Your boss isn't going to want to have that pay raise conversation with you again unless something changes at work or about what you are doing and contributing to your job.
Requesting a pay raise gets easier as you learn to plan and prepare for the discussion. A successful negotiation or two helps, too. You build your confidence that asking for a raise is a task that you can do. And, you increase the possibility that you will achieve your maximum income potential in your chosen field. Are you a superior performer? Why not use this advice and go for it?