Chase Your Coin: Everything You Need to Know to Ask for a Raise
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Yes, we're hustlers. We have goals. We have ambitions. We want to make our marks on the world and have some kind of impact. But, we're not doing that for free. Hustlers know their value and their worth. And they're not afraid to go get what they've earned and deserve.
There comes a time in almost every hustler's career when you'll have to ask for what you're worth. When it was my time, all of the other career advice I sought out on this topic was vague and generic. I hate that.
So settle in and get comfy, here's the specifics on everything you need to know to to ask for a raise.
Lay The Groundwork
In all areas of career advancement, I recommend laying the groundwork and looking ahead early. When you first start a new job, inquire during your orientation, onboarding or first few days about the review and performance evaluation process. Specifically, what you need to understand is how your goals will be set and when/how you'll be measured against them.
If your company doesn't have a formal process, create one for yourself. Lay out an action plan with your manager. Create at least three S.M.A.R.T. (Specific, Measurable, Achievable, Realistic, and Time-Bound) goals and get your manager's approval and agreement to them. You'll want to meet in person to discuss, and then as a follow up to that meeting, send him a copy via email.
Hi Tim,
Thanks so much for meeting with me today. I'm really excited to be on the team and working to improve our customer experience. Attached you'll find the goals document we reviewed this afternoon, incorporating your feedback and suggestions.
I will set up another time for us to review my progress in a few months.
Typically, performance reviews and the subsequent raises that come out of them happen once a year. So set up at least a mid-point check in to review your progress against the agreed-upon goals or to adjust if your priorities have now changed. If your business is moving more quickly than that, you may want to have a quarterly check-in.
In this meeting, you want to have an open and honest conversation with your manager about your progress. If you are not on track to meeting your goals, and thereby being rewarded with a promotion or raise, you want to know it upfront. Even if your manager says everything is going well, probe for more specific feedback.
"I've really been enjoying the projects that I've been working on and glad to hear that you're pleased with the results as well. I want to make sure I'm always challenging myself though. What else should I be thinking about to push myself even farther? Is there anything else I can be doing to be more effective?"
I know this may seem like a lot, but doing your groundwork establishes objective measures for your performance, shows your manager that you are professional and driven, and also gives you the backup you will need to advocate for yourself later.
Do Your Research
You know what you're supposed to be doing. You're working towards your goals and you know that you're doing a great job and you think you deserve to be paid more. Now, it's time to have proof of that.
Get online and do some salary research. Start at salary.com to see what the average range for your title and field is in your city. If you work for a large corporation, check on glassdoor.com and read the anonymous salary surveys. While you're there, look up the salaries for your peers in comparable positions at your company's competitors. This gives you a realistic range of what you're worth out in the open market.
From here, look at how far off your current compensation is from your local and industry average. You can generally expect anywhere from 3-5% as a merit increase for a raise. If getting that would still have you be under the average, consider pushing for a promotion instead of just a raise in your current role.
Look up the job descriptions for the role that's one level up from where you currently are. Compare that against your goals that you already laid out and the feedback that you've gotten from your manager. Are you surpassing those and working at basically a level ahead? If so, you be ready for a promotion to a higher level where the pay will be more in line with what you're expecting. In my experience, you can generally expect up to a 10% pay increase with a promotion to the next level.
Time It Right
As I said before, most organizations handle promotions and raises at 1-2 points during the year - at the end of your business year and at the midpoint. This is normally for budgetary reasons so that your company can project HR costs accurately. So don't go in asking for a raise at an off time. Even if you've earned it and your manager agrees, his hands will likely be tied by the budget.
If you're not sure when the right time is for your company, ask during your goal-setting or midpoint check ins. The earlier you ask this, the better. You have more leeway the newer you are to an organization or team to ask these kinds of housekeeping questions.
You should aim to have the compensation conversation AFTER you've already checked in about your goals. You want to do it this way because in most organizations your manager doesn't have absolute discretion to push through raises and promotions without checking with HR or their manager first. So, have that meeting and review your progress against your goals. You've been killin it all year, so you should know that you've surpassed everything that you were being measured against. Once you have affirmative feedback from your manager that you did in fact surpass all of the goals, ask about next steps.
"Tim, I've been really working hard this year and trying to keep in mind to be strategic in my thinking like you mentioned at our last check-in. I'm so glad to hear that you agree and that you have been pleased with my work. What are the next steps following this conversation? When and how are merit increases and position changes communicated?"
Be Confident
Whenever there's a negotiation around raises or promotions, many people feel like the company has the upper hand. You get nervous, you get scared and worry that if it doesn't go well you might get fired.
The truth of the matter is that as a highly effective employee, the cost to replace you should you leave is much higher than what you're going to be asking for. It can cost anywhere from 16-213% of the annual salary to replace an employee who leaves. Remember that - that is your leverage. Cheaper to keep her isn't just a song, it's real.
That doesn't mean you go in and make all the demands you want. But that should give you a confidence boost. And also remind you that you and your employer have a reciprocal relationship - you do good work and they compensate you for it. They are not doing you a favor by employing and you are not doing them a favor by doing your job.
Ask for What You Want
The big day has arrived. You're meeting with your manager specifically to discuss your compensation and position going forward.
Let your manager lead and listen first to hear what he's proposing. If all you get is a "great job, keep it up," push the conversation towards compensation. Now everyone knows that in salary negotiations, no one ever wants to be the one to throw out a number first. Try to push him to give you a figure first.
I'm really glad you're pleased with my work but I was hoping to have a conversation regarding my compensation today. Given that I've surpassed my goals, what is the standard merit increase for top performers?
Your manager may likely speak in percentages, so if you're not the kind who can work numbers out off the top of your head, do that beforehand. Have it on a piece of paper if you need to. But if he says 3.5%, you have to know what that calculates out to.
If he won't give you a number first and insists on you telling, ask for what you want.
Given my performance, a 5% salary increase is fair.
Be Prepared to Negotiate
Your manager's first response is probably going to be some form of no. Probably that budgets are tight, or that you're new, or some other reason. As a manager, part of his job is to make sure that his team delivers at the lowest cost to the company. He's got to get the best results for the lowest cost and stick to the departmental budget. So even if you're well-liked and a top performer, he will likely try to discourage you from seeking more money.
Don't take it personally. Understand that this is a business relationship. Like I said, you're there to do good work, they're there to compensate you accordingly for that work. So before you hop up in your feelings, don't. Stay calm and be prepared to politely push for what you want.
When responding to some common excuses, you again want to focus on your track record of performance and highlight your value back to your company -
- Budgets are really tight right now - "I can certainly understand and appreciate budgetary concerns. As you know, in my role, I've helped reduce vendor costs by creating the new bidding process. Those cost savings more than offset the amount I'm requesting. And by knowing that I'm valued by the company just as much as I enjoy working here, I know I'll be able to find even more areas for cost saving in the year to come."
- You haven't been here long enough for a raise - "I'm surprised to hear this as I wasn't aware there was a limit on when employees were eligible for merit increases. That said, what measures are in place to keep highly effective employees engaged and motivated? When will I be eligible for a merit increase?"
- I have to talk to HR/my boss - "I totally understand that and appreciate these are collaborative decisions. When do you think you'd be able to have that conversation? I'm happy to set up time for us to regroup." Whatever he says, hold him to it and don't let it go for longer than a week unless there's a really, really good reason (i.e. top decision maker is traveling or unavailable).
- You're already making the most we can pay for this role - "How are the salary ranges here set? I've done my own research and what I'm asking for is right in line with both industry standards and what our competitors pay. I hate to think my contributions here are being undervalued."
In any negotiation about what you're asking for, using the phrase "my contributions are being undervalued" signals that your pay issue is not just you wanting more money, or having bills, or that you heard someone else makes more. None of that matters. What matters is that the value proposition between you and your employer needs to be rebalanced. It's about what you have done and will continue to do.
Brace Yourself for the No
Remember, part of your manager's job is keeping costs low, including salaries. So he's most likely going to say no. Prepare for that and accept it as part of the negotiation.
After you've met his initial discouragement with responses that focus on your value, he should at least take your feedback to HR or to the larger team to discuss. If after that discussion, you're still getting a no, you have two choices - continue to push or put a plan in place.
If you continue to push, try to have your next meeting with the ultimate decision maker. In that meeting, focus again on your value and how that will continue to positively impact your team and company overall while also subtly signaling the cost of losing you.
"I've really enjoyed my time here and find myself intellectually challenged by the work. I think the results I've delivered thus far show that. I see myself continuing to learn and grow here. But I have to be honest, it's really hard to stay motivated to continue delivering top results when it appears that my contributions are being undervalued relative to the marketplace and our competitors. A 5% increase in my salary puts me back in a competitive range and would signal to me that the company really does appreciate my efforts and hard work."
This should at least get you a counteroffer to what you proposed.
If, in response to that, you still get nothing, just a flat out no, put a plan in place to ensure you get your raise next time. The same way you mapped out your goals and reviewed them, do that for your raise. If you can't or won't wait another year for the formal review, ask about having one sooner.
"I can certainly appreciate that budgets are already set, but things can and do change. Can we revisit this conversation at midyear?"
If you're being told that you're just not there yet and you want the raise sooner than another year, try to set more aggressive goals for the interim.
"I understand you don't feel that I'm ready yet, but I'm really confident that I can be an asset here. I want to prove that to you. Can we create a stretch project and set some more aggressive goals for the next quarter? I'll plan to review that progress in light of compensation with you in three more months."
Know When to Leave
If after putting a plan in place, and meeting those goals as well, if you're still not getting a raise, it's time to leave. Some companies are just cheap and if they're willing to lose a top performer, then that's their bad.
Too many people stay in jobs too long where they're unhappy and underpaid. If you're doing great work, take your talents somewhere they'll be recognized and compensated accordingly. People who stay in the same job for years tend to make less than those who change. Don't let that be you.
Stay in a job because you're challenged, enjoy the work and the team you're doing it with, and being compensated accordingly. If you're not, explore your options elsewhere. You already have a record as a star, use it to your advantage and get your coins.
That was a lot but that's it. Every step of the process that I would use to get a raise. Take this and adjust for your job and situation. But go out there and get your money.
