The huge disparities in behaviour and outcomes when it comes to salary levels and asking for increases continue to astound us even after all this time in working with senior managers and executives. But the lessons outlined in this post apply to any professional or manager. To illustrate the range, in the past couple of months we have had a client who hasn’t asked for a raise in 3 years and continues to languish at the bottom of the pay scale in his company, despite having earned nearly 50% more before he switched from IT to business consulting. At the other end we had an executive who got a $100K pay rise on the spot when threatening to leave. Beyond the anecdotes, most people we coach hold one of the following beliefs when it comes to salary and increases:
- You get what you ask for, if you don’t ask, you don’t get
- Great performance and great performers will be given the recognition they deserve
- There is a process in place in my organisation and that’s how salaries are determined
In reality, all three beliefs are too simplistic. The best way to summarise what really happens from our perspective is:
- The process for assigning and increasing salaries in the vast majority of organisations is inequitable and it pays to understand what is really happening and act accordingly
Which can further be expanded to:
- If by acting according to the written and unwritten rules you still don’t get what you feel you deserve and what you can demonstrate you are worth, test the market
That’s it in a nutshell. The starting point is to know what is going on and what happens in reality, beyond any ‘across the board’ increases or standard bonus/profit share schemes. Your first order of business is to find out what other people in your position and with similar experience get paid. In some organisations this is very simple because salary bands are narrow and which band someone is in is easy to determine. Otherwise, this requires a bit of detective work. Information can be gathered in many ways, for example through:
- New roles being advertised in your team/department (sort jobs by salary if no number is published)
- People leaving your team/department – ask them what the new role pays and how much of an increase that is
- Ask your manager and HR representative ‘where you sit’ in relation to the rest of the team
- Listen to the people who gossip about salaries and bonuses
This is just a small collection of strategies. In the real world, some people will happily tell you what salary they are on, sometimes pay lists/pay slips get leaked or mixed up and sometimes you just need to make friends with someone who knows if you can’t get information any other way. Unless you know where your salary and benefit package sits in relation to the other people doing the same/similar job, you have no way of knowing what to expect when you ask for an increase. Beyond that, you need to have a clear understanding of who has the authority to approve a raise or bonus payment. There is absolutely no point hassling your manager twice a week about getting a pay increase when she has no authority to approve a raise without going another 2 levels up the hierarchy.
The best time to ask for a raise is usually when salaries are reviewed anyway. By default, this will typically involve some arcane process that includes forced ranking or it will be based on a ‘one-size-fits-all’ increase across the board. If you sit back and wait, that’s most likely what you are going to get unless your manager has decided to really look out for you and your interests. Make no mistake, most managers don’t and even if they do there is no guarantee that they would stick their neck out just to get you 5% instead of 3.5%. Salary reviews tend to be painful for managers and the most painful part for a manager is having to justify a decision they don’t agree with. This gives you leverage if you make your case well in advance and clearly outline your expectations. Once your manager buys in to your narrative, they will be in a bind about not having to disappoint you, so it becomes much more likely that they will argue on your behalf, even if that is painful for them. Make sure you let them know beforehand how disappointed you would be with just getting the standard increase given all you have achieved and the new skills you have acquired in the last 12 months etc.
Outside the normal review period, you need to go to someone who can say yes. That means talking to your manager first and once he says he can’t do anything, ask who can and say you will go and see them. Do not ask permission, inform your manager that you are going to act. This implies that you have a strong case to make – you delivered a high-profile project everyone was watching, you applied for a patent, you landed a big new client or you found a way of saving the company significant money. The key here is immediacy, to exploit the recognition or good will, you need to act fast. Make a 15min appointment with the right person and ask for recognition of your achievement – sometimes it is easier to get a bonus payment than a raise, it depends on the company. Make your case short and succinct and be clear and specific about what you expect in return.
If you know you are underpaid compared to your colleagues and/or to the market and you can’t get any traction with a request for increasing your salary, you will have to test the market. A company or manager only ever truly realise what you are worth to them if you threaten to leave. That’s sad, but apart from a handful of exceptions this is the reality we see every day. If you can easily get a better offer elsewhere, resign (verbally) and mention how much the other company is prepared to pay. If you get a counteroffer, you have learned two things:
- You really are as valuable to the organisation as you thought you are (they want to keep you)
- Whatever they were prepared to pay you previously was simply what they could get away with
Make sure you are happy to leave before you enact this strategy, there is no guarantee that you will get a counteroffer, even if they want to keep you. For example, if redundancies are on the cards anyway, they have just saved themselves a big payout by letting you leave.
Finally, bear in mind that most managers dread salary conversations with their direct reports, especially if they feel their hands are tied in giving people what they want and deserve. If you make it easy to say no to your request (“I just wondered if there was any money in the kitty to get a bit of an increase?”), don’t be surprised if the answer is no. If times are good, it’s easier to get an increase, but that doesn’t mean you can’t and shouldn’t ask when times are tough. Ask in a respectful yet confident manner and be persistent in your request without becoming a pest.