Do you believe you are being underpaid at your job? In this article, we’ll learn how to ask for a pay raise or salary increase in a professional manner.
Working in the field of HR, we see a lot of job offers, and how it stacks up to the internal equity because when we run an offer, we actually pull internal equity from a company and we see what external people would stack up to internal people. Honestly, we’d say probably 40 to 50% of the people that we see internally are at the low end of the salary bands established for those roles.
So that means if you’re working for a company for a given period of time, it’s likely that the open market is going to start passing you by and especially if you’re somebody that has sat in the same role in the same company for a decade or more, it’s almost certain that the open market or the people that were bringing in off the street are making more than you are.
So, it can be very easy to feel like you’re underpaid if you actually start to dig into it and let’s take into account the time that we write this article that the labor market is definitely slanted in the favor of the employee. Especially, when it comes to salaries. We’ve seen salaries and wages going up across the board, inflation is going very high and companies are getting much more competitive with how they have to attract talent and that’s usually in the form of salary increases.
Why Are You Asking For A Salary Increase?
All right, so let’s jump into how to ask for the salary increase there are some things that we have to do first. So, the first thing that we’ve to do is to understand why it is that we’re asking for a salary increase. Because you’re underpaid, to begin with, and again taking into account market conditions and where inflation is going, all those things will factor into whether or not you’re being competitively paid for your job type and the company and industry that you’re in.
The other thing to consider is whether has it been more than a year since your last raise because if that’s the case you definitely owe a pay raise because you’re effectively making less money than you did the previous year due to that rising inflation.
If you did get a pay raise but it didn’t keep pace with the inflation then you’re actually taking a pay cut this year due to the same exact work. Or maybe you went back and refurbished your skills, knowledge, and abilities. Maybe you’ve got that education that you’ve been meaning to get so if you’re a more valuable employee to your employer then that certainly warrants looking at your compensation structure and adjusting it accordingly.
Of course, this all assumes that the skills, knowledge, and ability that you have gained are actually desirable on the market and for that particular company. So you have to be realistic in how you assess yourself.
The Pro Steps
Assess Your Value
Now, let’s talk about how to assess your value on the open market because we’ve to understand what we’re worth and where we currently sit today to ensure that there’s not a big gap there.
The first and most obvious thing is we have to see how our current position stacks up to the external market. So, in a lot of cases, you’ll see some job postings that will have salary data in them. Here’s a little insider tip to help you figure out what the realistic pay ranges are for your particular position.
You would want to look at remote jobs that are eligible to sit in Colorado, Connecticut, New york city, .etc There’s probably going to be more that will be added over time but those are some of the current locations that have pay transparency acts. So employers that post their jobs in those markets have to publish the salary/wage range as a legal requirement. So if you see a company that is posting a job remotely and it doesn’t specify or exclude those states, then legally they’re supposed to be publishing that salary range.
It’s known to all that a lot of companies don’t do that but they ought to be doing it as a part of compliance efforts. So, if you’re looking for some wage range data, check out some of those postings but take into account that there are some cost of living differences so somebody obviously sitting in New York City is going to be looking at a different wage range than somebody that would be sitting in an area like rural Iowa.
Develop Skill Marketability
The second thing you would want to assess is how marketable your skills are to get a decent salary increase. So, if you learned a certain technology stack that is no longer valid or the market is moving away from it then you have to assess that properly and again look at those jobs descriptions that are posted all across the country to get an idea of what industry is asking for in those types of roles and if you have current skills or maybe it’s a niche skill set that not everybody has, that’s going to be worth more to your company and more importantly to other companies on the open market.
You would also want to do your baseline research, hop on to glassdoor, and hop on to indeed(which has some salary data-related tools). They’re not perfect but they do give you at least some level of a baseline to establish what you should be worth on the open market.
Of course, you’d want to pay attention to some local job postings because companies will publish that information occasionally. So, what kind of reasons can you expect to get? Honestly, very minimum. You should be moving into the minimum of the range and so if you’re seeing jobs out there that seem to be starting in the 50 to 60k range and you’re going to get paid only 40k, that’s a very reasonable expectation to be moved up into where other employers are paying.
Looking at your raises, historically, companies usually target between 1 to 3% for annual salary increases. Obviously, in today’s market, that’s not going to cut it but as we return back to a normal market at some point in the future, surely you’d see that. But it’s not unheard of to make 50% salary increases or more by jumping to another job so if you’re in a low-paying company it might be worth you testing the waters to get those big jumps.
The amount that you should be asking for is really going to vary depending on where you are in the current compensation spectrum and where you should really be.
Get Your Facts Straight
The next thing we’re going to do is get our facts straight. How are we going to justify the salary increase that we’re going to be asking for? So again, we’re already done the market data research, we should have a decent idea of where we should be comped based on the local market comparators and now we want to start to build our case.
So, look over the past year. What accomplishments you’ve achieved that have directly impacted the bottom line of the business? How you’ve improved things and also and then also look at what new skills, knowledge, abilities, and potential education you have acquired during that period of time that should justify why you ought to get a salary increase.
Call A Meeting
Further, you’d want to prepare all that information and set the stage with your boss about what your intentions are. So, when you set that meeting up, you’d want to give your boss an advance notice of your intent for why you want to meet. You don’t want to catch them off guard, you want to give them plenty of time to consider. What it is that you’re going to be approaching them with so that they can be prepared mentally for it.
It’s not recommended that you do it during a busy time of the day or busy time of the week. Save it for a time when you know your boss is going to be more receptive to your request.
It’s also suggested that you set aside a calendar invite and let them know in advance that you are preparing to talk about all the new skills, knowledge, and abilities that you bring and you’d like to have a salary discussion with them. That way, you’re setting the stage and you’re not catching them completely off guard.
So as you sit down in the meeting you may actually find that their boss is there or somebody from the human resource management department. Maybe in attendance and that’s perfectly normal. But regardless, we want to present our business case to them. So you’re going to set the tone of the meeting by establishing your purpose and your intent very clearly that you’ve done some research on your job and you feel it’s time to have a salary discussion.
Then you want to present the data that you have found including the market salary data that you’ve discovered, the skills and the accomplishments, and justify why you should qualify for a significant salary increase and you want to do it in a firm and professional way and try not to bring emotion into it.
Some Unfavorable Situations
If They Are Non-committal
If your boss says they’ll take your request and think about it then you want to set up a reasonable follow-up meeting immediately. Say something like thanks for hearing me out, I’m interested in hearing what you come back with so can we put something on the calendar this time next week so that we can follow up on this topic?
But if you want to get a firm commitment because if they’re non-committal to you and they never follow up on it, it’s likely that you’re going to be back in the same position you were to start with.
If They Can’t Afford It
But if they say no, “We think you’re worth it, but we can’t afford it right now” then it’s suggested to look at other alternatives.
You can look at other perks and benefits that may take its place of it for the time being whether it’s asking for additional paid time off, maybe a spot bonus, or some other perk that would have some value to you. But that’s not going to let them off the hook so easily we’re going to revisit the topic in three months and we’re going to inform them.
Say something to the effect of, viz, I appreciate that you’re hearing me out and I understand the business needs so let’s revisit this topic in three months. In the meantime, would you be open to increasing my vacation time or some other perk that you’ve pre-identified?
If They Think You Are Too High
If they bock at your number, you can always push back and say I’ve done a lot of research on the external job market and I think that this is very fair based on what other employers are paying however I’m happy to go back and do some more research to make sure that my numbers are accurate. That way you’re setting the tone that you’re not going to back down from your number. Who knows it might let a fire under them to take some action before they lose you.
If They Say No
Which gets us to the next answer, which is they shut you down completely and say no, get out of my office and I think you know what you need to do from there. It’s time to update your resume and it’s time to look for other job opportunities. Because ultimately at the end of the day we have to act like free agents and we shouldn’t tolerate a company that doesn’t value us properly
Now, we know that asking for a salary increase can be particularly nerve-wracking but if you go about the right way and you properly value yourself, you should have some success or at the very least you’ll know where you stand with that company. Additionally, if you have spent a significant number of years working in one company and have a fair performance appraisal report, these factors may also strengthen your claim for a decent salary increase.