One of the best personal finance tips for making more money is getting a raise at your current job. But learning how to get a raise isn’t as easy as simply asking for one.
Asking for a raise is stressful for a lot of people, but it can spark some positive movement for your overall financial well-being and be incredibly empowering.
However, there’s some serious planning and research that goes into asking your boss for a raise. But if you take the time to walk through the steps I’m about to explain, you can be confident and prepared to ask for a raise, even in today’s financial climate.How to Get a Raise – 6 Smart Steps to Getting a Raise at Work
1. Research your company
2020 was a hard year for many companies, but others have thrived. Taking a critical look at how your employer has done this past year can show you if they’re in the position to give raises right now.
Have they been laying people off? Are they in the middle of a lawsuit? Have they taken any major financial hits recently? Is your company’s industry doing well overall? Have there been any major shakeups with management?
The answers to those questions may reveal the financial health of your company. If your company is struggling financially, they might not be able to support a raise, no matter how excellent your performance is. You can go through all of the steps and learn how to get a raise, but unless your employer is in a position to pay you more, asking for a raise would be a non-starter.
2. Review your standing
Next, think about your standing within your company. Review your work history and make sure that you have consistently performed well. Your performance reviews are a good resource. Also, think about the feedback your boss or managers have given you in the past.
Another thing to consider is how you can connect your work history with how the company is performing. Is there a direct link between your work and your company’s profits? Did you help secure a major deal? Assist in a successful marketing campaign? Fix an IT problem that enabled the sales team to work faster?
Showing evidence of how valuable you are to your company gives you more leverage and demonstrates why you deserve a raise.
If your research shows that you deserve a raise, you may still need to convince your boss that you’re worth the investment. And you’re going to want to arm yourself with as much data as possible. Here’s exactly what you should be prepared with:
- Track your performance. Depending on your job, you should be able to show your boss your success rate on past projects, before and after statistics, etc.
- Bring a list of your achievements. You want to be ready to talk about your accomplishments, new certifications, how you’ve grown the company, and any strengths and talents that will be relevant to your boss.
- Be ready to talk about your ideas or plans for your future. A pay increase is an investment and telling your boss that you’re thinking about future growth will show them that you’re interested in making a return on that investment.
3. Decide how much to ask for
Here’s the question that a lot of people get hung up on: What is a reasonable raise to ask for?
According to a World At Work study, companies who give out annual salary increases are budgeting an average 2.9% increase for 2021.
If your employer does annual increases that fall within those averages – it’s been closer to 3.2% in previous years – then that says asking for a 10% raise may be inappropriate. Something closer to a 5% raise is more reasonable in that scenario.
What kind of raise to ask for if your company doesn’t do annual increases?
This can take a little more research, and one of the best to start is to look at sites like PayScale and Glassdoor to see what others with your same job are being paid based on experience and location. You can also look at the Bureau of Labor Statistics – they compile wage data for over 800 occupations.
Those figures will give you an idea of what’s within the realm of possibility, but they are much too general to rely on for exact numbers.
To narrow down your number even more, talk to others in your field, check with recruiters, and scour job postings.
Some people will find out that they’re being underpaid, and that’s not always the fault of your employer. But if you have the experience and have consistently brought value to your company, it’s worth mentioning a pay discrepancy with your boss.
You can sit down with your boss and have a conversation about whether or not you’re being compensated at the appropriate level.
Related: How to Make Extra Money – Over 40 Ways to Make More Money and A Total Beginner’s Guide to Making More Money in 2020
4. Get the timing right
Understanding the best time to ask for a raise is an overlooked but important thing to consider. Your research may have gotten you fired up enough to ask for a raise, but be patient and make sure you get the timing right.
Some companies have certain times of the year when they give raises, like at the end of the fiscal year, especially if it was a strong one. Annual performance review time is another common time for raises.
According to psychological research, there are even some days of the week and times that are better than others:
- Mondays are a no-go. No one feels generous on a Monday.
- The morning morality effect. There is some evidence to suggest that people have a higher level of moral awareness in the morning but after coffee, of course.
- Everyone is happier on a Friday. With the weekend almost here, your boss might have a more optimistic outlook. But don’t wait until it’s the end of the day when they’re ready to leave.
Knowing your boss’s personality and workload can also affect your success. If you pay close enough attention, you can probably tell what types of things set them off, when they’re happier, etc. For example, I hate meetings. No one should ever ask me for something after I sit through a meeting.
Whatever you do, give your boss a little bit of a heads up when you schedule your meeting. You can prepare your boss by telling them that you want to talk about your career growth.
5. Practice your pitch
I highly recommend that you spend some time rehearsing what you’re going to say before you go in and ask for a raise. This will help you keep a level head, avoid getting too emotional, and make sure you cover all of your points.
Practicing can also help you avoid what not to do, which are things like:
- Don’t bring your personal life into the conversation. You want to rely on your work accomplishments and performance, not anything else that’s happening in your life.
- Don’t bring up other employees. Even though workplace conversations about pay are protected under The National Labor Relations Act, it’s still taboo and can get people in trouble. If you’re asking for a raise because you’ve talked to a coworker about their pay, avoid talking about it.
- Don’t be aggressive. Calm is key when getting a raise. Threatening your boss or throwing out ultimatums is a fast way to lose your job, not get a raise.
- Avoid apologetic language. Never ask for a raise by starting with, “I’m sorry to bother you” or “I know the time isn’t great.” You’re leading with an excuse that can quickly turn into a “no.” Plus, you should never be sorry that you’re asking for a raise.
You can rehearse what you’re going to say with your spouse, partner, a friend, do it via Zoom, with yourself in the mirror, in the car, etc. Practicing can work out a lot of kinks in your pitch and keep you on track.
6. Be straightforward and ready to negotiate
When you sit down with your boss or manager to ask for a raise, start with something like, “Thanks for taking the time to meet with me today, and I know your time is valuable, so I’ll get right to the point. I want to bring you up to speed on my accomplishments this past year and talk about compensation.”
Experts recommend starting on a positive note and then going straight into your ask. That sets the tone for the rest of your conversation because it gets right to the heart of what you’re asking for and shows your boss that you respect their time.
Then, there are a couple of different strategies you can take when you’re ready to talk numbers.
Option 1: Name your number
Have your target salary in mind, and put it out in the open. Some people go in with a slightly inflated sum, and be ready to negotiate and find a happy medium if you do inflate your number. However, asking for more than is reasonable can make you look out of touch.
Option 2: Wait for your manager to come up with a number
For this approach, you can say something like, “Can we explore whether I’m being compensated at the appropriate level?”
It’s a good idea to start this conversation by talking about how you’ve met goals, major projects you’ve recently finished, and your responsibilities.
This approach puts the ball in their court. They can take the information you’ve presented and come back with an answer. And the potential benefit to this approach is that they may come back with a higher number. However, if it’s less than you were hoping for, tell your boss that you were thinking you could meet in the middle.
Your manager will need some time with your raise request. It’s not uncommon that they’ll need to bring the request to their boss before moving forward with anything. Be patient while you wait.
Going in with the mindset that you won’t get an answer right away will get you ready to wait. I know it’s hard, but it’s much less stressful if you’re prepared.
What if I ask for a raise and get a “no”?
“No” is hard to hear, but don’t let it discourage you because it’s not always the end of the conversation. There are valid reasons why your manager might say “no,” and you can stay calm and keep the conversation going so you understand why.
“What’s contributing to your decision?”
This is an open-ended question that shows your willingness to empathize with your boss. Maybe business isn’t as good as you thought. Maybe your company is about to be restructured. There are lots of reasons why you might hear a “no,” and they’re not always about you.
“What would it take for me to get a raise in the future?”
If you want to get a raise at work in the future, this question tells your boss that you’re still interested. It also shows that you’re willing to work on any performance issues. Use their answer as a way to set some professional goals.
Look for a new job
The hard reality is that denial might lead to some job hunting. This isn’t the end of the world – I promise. If you’re doing an awesome job and your boss can’t acknowledge that with a raise, think about looking at other job possibilities.
One of the safest and best ways to do this is by starting a side hustle. A side hustle can help you build your emergency fund if there is any lag time between your current job and a new one. There are also lots of side hustle options, like running Facebook ads for small businesses, that can legitimately replace your current salary one day.
Read more at 7 Reasons Why You Absolutely Need a Side Hustle.
The final word on how to get a raise
Increasing your income is the key to paying off debt, saving, and investing. So if you want to start earning more money, then asking for a raise is one of the fastest and easiest ways to do so, especially if you love your current job.
And being denied a raise isn’t the end either — it’s an excellent point to reevaluate what you’re doing and want from your career. There’s no shame in walking away for something new, but there is a problem if you don’t start standing up for yourself in the first place.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
Comments
Steveark
I’d suggest changing the order a little. Surveys are helpful but they do not prove that there is an actual employer out there who is willing to pay you that much right now. If you obtain an offer from another company however, and are prepared to accept it if need be, then there is nothing better than revealing the offer to your boss. That gives him only two options, match some or all of the offer terms or potentially go through all the pain of finding your replacement. I did this a dozen times and never had to take the offer from the competition. It worked so well I ended up running the whole company and I saw many smart employees use the same tactic on me, and yes, it worked for them too.