How to Negotiate a Raise
You and only you are in control of your career; this includes both your advancement and your salary. Generally speaking, you should plan on asking for a raise every 12 months. Second to your actual job performance, how you ask for a raise will be a major factor whether or not you have some extra spending money this year.
Before we get into the nitty gritty of how to ask for a raise, you need to consider if you deserve one. The answer should be yes. If it’s not, it may be time for a job change because there is a chance you may be fired. Okay, I might be taking that to an extreme, but the intentions is to force you to have more self-confidence. Every year, you are worth more. You are an asset which produces value. The time more time you spend in your job, the great the value of the asset, and you deserve the reap the rewards of this increased value. Now that we’ve made that clear, it’s time to dig in.
Answer this question: “How do you justify your raise?”
This is the most important question to consider before asking for a raise. Your justification should be based on future value, rather than financial or emotional (“I deserve it”) need.
Ground your request in value added and when possible, articulate this value in dollars contributed towards the growth of the company. Use your performance in the past 6-12 months as an indicator of your performance to come in the upcoming year. As you generate more dollars in the form of revenue or cost-savings, you deserve a piece of the pie.
Request the meeting.
Remember, you are in control and it’s up to you to initiate the conversation.
“I’d like to talk to you about my performance this past year and where I am headed this year”
Let’s get to some tactics. First, 2-3 weeks ahead of time ask your boss to set aside some time to talk about your performance and compensation. Give him 2-3 specific time slots and put it on the calendar. This point cannot be stressed enough. By getting it on the calendar you are ensuring that your boss takes some time to consider your performance, mostly so he is not blindsided by your request.
Next, 2-3 days before the meeting send a rough agenda. It should be as simple as this.
I am looking forward to talking to you next Wednesday. Here are some of the items that I would love to talk about.
1. Things I am doing well that I should continue to focus on.
2. Things I can do to advance myself professionally.
3. My current and future compensation
I thought it would help to share a rough outline with you ahead of time. I trust and value your input, and am looking forward to making this a regular conversation.
Prep for game time.
The meeting is around the corner. The stage has been set, and you have primed yourself and your boss for a great conversation.
Now it is just a matter of execution. Three things to keep in mind the day of...
- You are in control of this conversation, act like it.
- Your boss experiences this conversation quite frequently, and is actually very comfortable talking to you about it.
- It is normal to ask for a raise.
Start by thanking your boss for his time. Express that you value his input and want this type of interaction to be ongoing. Then get to the first two agenda items – Start by sharing some things you have been focused on, and solicit feedback in areas where you know that positive results have been observed. It is easy to let this type of conversation skew to the negative “things I can do better,” try to avoid this. You don’t want to focus on areas of improvement right before you ask for a raise.
Shift the conversation to talk about your trajectory. Don’t talk about working for another company or starting your own. Focused on growth within your current company. If your trajectory in uncertain, now is a great time to solicit some constructive feedback from your superiors. The point is to demonstrate your commitment to the enterprise.
Make the ask.
It’s time. You’ve had a positive conversation with your boss and have primed him for discussion of your compensation. Now it’s time to make your request.
Here is a great sentence starter:
Based on my performance over the last year, and my continued growth and commitment towards [company name], I wanted to see if you are willing to be my advocate in asking for a raise. Are you willing to be my advocate?
Notice what you just did, you asked a yes-able question. You asked a question that is easy to say yes to. You also made the conversation easier for your boss, because typically he is not the decision maker. He needs to talk to his boss, the board, HR, etc. to get approval.
Once he agrees to being your advocate, ask about best next steps. Usually, he will need some time. He may also ask for what type of raise you are seeking. I recommend asking for a 3-6% raise, getting you closer to the next $5,000 increment. This is in the realm of possibility. If you are early in your career, you could occasionally ask for a 10% raise – but this is only when your contributions are extreme significant and you can be clearly demonstrated.
- Don’t gossip about your request with co-workers. This is equivalent to shooting yourself in the foot.
- Be Conscious of Time – During the meeting it is easy to get caught up in the first two agenda items, leaving little to no time to talk about your raise.
- Send a follow-up email the same day summarizing your conversation. Establish a clear a timeline with clear next steps.
- What if they just say no? Well – this happens. Then ask another yes-able question: “Are you willing to meet again in three months to discuss this again?” If they say no, then you should consider this as a signal that you should begin looking for other jobs.
- Why ask for a raise?
- Well there is this little things called inflation, which is slowly diminishing the value of your earned dollar. This is happening at a historically low rate (2-3%), but this means that your spending power is decreasing steadily. At a minimum, you should be eligible to receive a 2-3% raise each year. If you are not, it is equivalent to making less money each year.
- Young professionals have the least experience asking for a raise, but because of compounding interest, raises early in a career matter a ton. A $1,000 raise at the age of 25 has approximately $100,000 in compounded lifetime earnings.
- If you work with a career coach, ask for their support in how to best ask for a raise.