If you’d like to make more money at work, then ask to be paid more.
A recent survey by payscale.com showed that only 43% of workers have EVER asked for a salary increase. And there is a clear correlation between asking for a raise and having a higher salary.
To increase your chances of a “yes,” first put yourself in a position of strength as a valuable employee. Make yourself irreplaceable to your company. Add clear value to their business – value that translates to the bottom line. Know your market. Make your boss look good. Be as/more helpful than other colleagues, and keep a good attitude.
And know your worth in the marketplace. Check websites such as www.payscale.com and www.glassdoor.com if you perform a standard role. Attend networking events to build relationships with competitors (potential employers) and peers. These are great resources to check comparable salaries.
Once you’ve built a position of strength and understand your value, then ASK your boss.
What if I don’t get a raise?
If the answer is “no,” then you are either in a bad situation, or need to go to the “position of strength” article above and figure out how to contribute more value. But either way, you’re in the same place you are now. Of course, you need to have been respectful and non-threatening in how you ask. Odds are against it, but still there is a real chance of this happening…according to the survey 25%.
That means 75% got a raise when they asked. And of that number, almost 2/3 got the number they requested. So most likely you come out a winner.
Getting Comfortable with Discomfort
Asking for more can be uncomfortable. Don’t let it be for you. They see it as a business transaction – I can pay my inputs $x amount in order to provide $x + $y value. You should see it as the same. Understand that you are trading your valuable time to your company so they can make profit. You go there each day because they pay you. So let’s be adults about it. Think of it as purely economics.
If you can’t get rid the emotional side, then hide your discomfort and ask anyway. It is uncomfortable for your boss too. And the easiest way they can make the discomfort go away is to say yes. It’s far easier than replacing you, assuming you have been a good employee.
Practice What I Preach:
I just recently did exactly this.
To set the stage: I’m not interested in taking over the world or making all of its money. I’m also not sure if financial independence will mean early retirement for me. I really enjoy creating things. Just want to do it on my terms. I think I like my line of work, but I’m sure I don’t like being an employee. But while I’m an employee, I would like to make as much as possible – and also inquire as to whether there is an option to be a full partner at my current company.
Rather than up and leave one (quickly upcoming) day, I decided ask for more now and see how it went. So a couple of months ago, I gave my boss feedback that my goal is to move away from an employee role (with profit sharing %) – to be a full partner in a (hopefully their) business. I wasn’t all the way open about my FI goals & timing, for obvious reasons. But the conversation was quite blunt, although respectful of his hot buttons.
He acted quickly to increase my equity percentage by 50% (more than the old %) in all new deals starting this year. I’m grateful for this, as it’s a compliment to my value to him. But this increase came with a ton of strings attached – golden handcuffs type of stuff. Basically if I leave before we sell whichever project then I lose the marginal increase from this year.
I would put myself in the category of: clearly got a raise, not not what I was asking for. Still a raise. And I will note that I held off from asking for a raise during the years of economic downturn because it would have been received poorly. Important to know your situation.
Its funny how he took the wrong message from our discussion. For him, he assumed my leaving would be predicated on me making more money somewhere else. When really, if/when I leave it will be because the money doesn’t matter anymore, and I simply don’t want to be someone’s employee. Putting all these strings – vesting periods, recapture rights, buyout provisions, etc – actually showed me more clearly that there isn’t room at the partner table. I will be relegated to employee with profit sharing. Quite lucrative employment, but not what I’m after.
It’s a crazy shift to stop making cash-based decisions. It’s weird, and I’m not 100% there yet.