Did you know that 33% of men and 42% of women felt underpaid last year? If you were one of them, the good news is that with some preparation and savviness you can get the raise you’ve been longing for.
Compensation has a direct effect on motivation, commitment, and excitement levels for a lot of people at work. Feeling well paid can increase your productivity, bring you more happiness, and reduce financial stresses at home.
I’m an amateur personal finance geek.
Your tools have helped me become a smarter investor.
Personal Capital Dashboard User, February 2021
Take a look at the chart below which outlines US salary budget increases in 2014 and the projections for 2015. Keep in mind the numbers don’t account for inflation. Factoring in an approximate 2.1% consumer price index increase, the resulting wage increase for 2015 is only about 0.9% for 2015, down from 1.6% last year. But don’t let statistics dictate your future! Many people just like you are able to negotiate much higher salary increases than the below percentages each year. I’ve done it myself and know many others who have done the same.
Improve Your Financial Health By Asking For A Raise
So what do you do if you want to earn more? Ask yourself if your employer pays you fairly at work. If you don’t know how much you’re really worth it’s time to find out.
Have you ever considered asking for a raise but didn’t know how? It’s not as difficult or awkward as you may think. I’ve asked for a raise several times in my career and it gets easier with practice. Here are some helpful suggestions on how to ask for a raise:
1) Overcome your fears of asking for a raise. This was one of the biggest mental hurdles I faced in my career. For the longest time, I felt underpaid but didn’t do anything about it. I had many other benefits I valued besides salary such as ample vacation days, free meals, fully employer-paid insurance plans, and flexible hours. And I used those benefits as an excuse to avoid facing my fears of asking for a raise. Once I summoned up enough courage to talk to my manager about my compensation concerns, I realized how silly it was that I let fear hold me back for so long.
Many employers are focused on their bottom line and want to keep their employees compensation levels as tight as they can get away with. So it’s up to you to voice your concerns and proactively ask for a raise. Chances are your manager will pay you the least he or she can get away with if you don’t speak up.
2) Read through your last performance evaluation. Before pulling your manager aside to ask for a raise, take a read through your last performance review. How did you do? Was your boss happy with your work? Did you reach your goals? Refamiliarize yourself with his or her thoughts because those perceptions could impact how likely you are to get a raise. Being able to quickly reference some of the items discussed in your last performance evaluation can come in handy when asking for a raise as well.
3) Make a list of your recent accomplishments. Throughout my career, I enjoyed keeping lists of all of the various projects, assignments, and milestones I completed. As I completed items on my to-do list, I would regularly copy the tasks I finished over to an accomplishments tracker. I did this for 3 main reasons:
1) I was often so busy that if I didn’t write down the tasks I’d completed, it was easy to forget everything I’d already done after I moved on to new assignments.
2) It kept me motivated to perform well because every time I looked at the list, I could easily see how my hard work was making a difference. And it provided proof that I was bringing value to the company and my clients.
3) The list was a fantastic resource I could use when writing my self-appraisals twice a year. And was also a solid reference sheet to have when asking for a raise.
Start keeping track of your own accomplishments and use them to build your confidence, impress your manager, and prove why you are worthy of a raise.
4) Compare yourself to your peers. Even though your manager is unlikely to compare you to your peers directly on paper or in person, it’s pretty certain he or she is doing so in private and in meetings with other managers. In my many years as a manager, I regularly analyzed each employee’s performance based on their individual accomplishments as well as how they compared to current and former employees in the same role.
If you are lagging behind your peers, you will have a hard time convincing your boss to give you a raise. On the other hand, if you are surpassing your peers your chances of getting a raise are higher. Use that to your advantage!
5) Research market conditions. Asking for a raise isn’t a wise decision during an economic crisis, a time when your company is missing earnings, or during a period when your industry is in decline. Being aware of the health of your company, sector, and the overall economy are important aspects to keep in mind. Asking for more money at a bad time can come across as being insensitive, having poor judgment, and being unaware of the big picture. Avoid making a bad impression.
6) Know How Much You’re Worth. In addition, research what your employer and its competitors are paying other employees with your same skill set and years of experience. When you sit down to talk with your manager about your compensation mention some of these comparables and talk about the value of your current skill set as well as your growth and potential.
As you reassess where you are in your career and what the market rates are for your experience and skills, you are gaining knowledge and awareness that you can utilize to build your case to get a raise.
While you’re at it, review your true net worth using Personal Capital’s tools that allow you to see all of your financial accounts (mortgages, bank acts, student loans, credit cards, investments) in one place. Tools take the stress out of keeping track of all of your hard earned money, including those bonuses and raises you’re going after, and help you grow your wealth for a better lifestyle and a prosperous retirement.
7) Improve working relationships internally and externally. In my years as a manager, I loved hearing positive feedback from clients and colleagues about my employees. Those compliments went a long way because they made my job easier, reinforced my positive perceptions of the employees, and motivated me to do whatever I could to ensure they were well compensated and happy.
What do you think your colleagues and clients would say to your manager about you? If they wouldn’t have much to say or might have something negative to share, it is time to make a better connection and demonstrate your value added! The more you improve and build relationships within your company as well as externally, your value increases along with your chances of getting a raise.
8) Have open dialogs with your manager. Having a strong relationship with your manager is so important. I’ve been lucky to have great relationships with all of my bosses, especially my most recent manager of 10 years. Having open, honest dialogs makes communication so much easier, improves your work experience, and helps you get the support and compensation you deserve. The better you know your manager the less awkward it is to ask for a raise as well.
After you’ve prepared what you want to say using the tips above, schedule a meeting with your manager at a time that’s convenient for him or her. Avoid days when they are running back and forth between client meetings, preparing to leave for a business trip, or right before a tight deadline. Use your common sense.
After you finish presenting your case on getting a raise, give yourself a pat on the back for having the courage to do it! Don’t expect immediate answers and maintain a positive and appreciative attitude throughout. Schedule a follow up meeting after your manager has had time to go through the proper channels to see what may be possible and when you could receive a raise as well.
Ask For What You Deserve
Talking about compensation may feel intimidating at first but it’s not as scary as it may seem. Knowing your worth and asking for what you deserve is vital for getting fairly compensated.
If you apply the tips on asking for a raise above, you are preparing yourself for success. And even if a raise isn’t possible the first time you ask, don’t get discouraged. It may take multiple conversations and six to twelve months to get the raise you desire, but stay patient because preparing and starting a dialog are the key first steps. Keep up the great work!
Personal Capital’s mission is to create better financial lives through technology and people. Schedule a consultation today with a Personal Capital financial advisor and start investing better.