Two of the trickiest, and most important conversations you will have in your career involve money. The first conversation happens during the interview process when you negotiate your salary. The second happens after you’ve built a list of accomplishments at the company and believe you deserve more money.
Asking for a raise is something many people find daunting, but you shouldn’t. The worst thing that can happen is your request is turned down and the best scenario means you proved your case and won a pay raise.
The key in the last sentence resounds in three words: “Proved Your Case”.
Below are five tips to help you prepare your case for asking for a raise.
Tip 1: You Don’t Earn a Raise for Not Getting Fired
One of the most genius things I ever heard from a boss was, “I’m not going to give you a raise simply because you managed to work here for a year and not get fired.”In a world where many companies do annual performance reviews and give pay increases for cost of living, his thoughts are unconventional. Many people have been raised to expect a pay raise on their anniversary each year simply because they have reached a work milestone.The reality is most employers can replace you for the same salary you’re currently making at any given time. What they can’t replace is the UNIQUE VALUE the experience you’ve developed brings to the table. It’s your job to show them the value they may not recognize on their own.I was recently asked the question, “How do I ask for a raise without tooting my own horn?”The answer is simple. You don’t! If you feel like you deserve a raise, it’s time for you to start tooting … and tooting loudly. Employee compensation is a business expense. Much the same as you would make a presentation to request purchasing a new software, now is the time for you to create a presentation on why someone should invest more of their business capital into you.
Tip 2: Analyze Your Contributions to the Company
Your first step is to analyze the contributions you have made to the company that go above and beyond your job description. Start by analyzing the list of things you were hired to do. Ask yourself if you have accomplished your responsibilities and achieved goals quicker than anticipated, faster than anticipated, or more cheaply than anticipated.
Next, ask yourself what new responsibilities have you taken on that you weren’t originally hired to do. Then analyze how that has saved the company money, improved processes, or streamlined the workflow of others in your department.
Once you have evaluated both things, put your findings down on paper. This will be the opening discussion point for starting the conversation about why you believe you deserve additional compensation.
Tip 3: Analyze Your Professional Development
Next, analyze how you have grown professionally since you started in your position. What new skills have you developed that would be hard to replace by hiring someone new?For example, if you were hired to learn and implement a new software at a company and you’ve completed training and earned a certification in that software, you are a step above hiring someone else. You have a unique new skill that others do not possess, and your skill is tailored to the company’s unique processes. What is the value of that to the company? To determine that, calculate the amount of time it took you to become certified and multiply that by your current pay rate. That is what a company will spend to replace your new skill set in the future.Perhaps you’ve attended a conference and learned and mastered a new marketing technique that has equated to X-number of new leads. The dollar volume for those leads is X-number of dollars. While it used to take you two days to implement the process that drives leads, it now takes you two hours.In both examples above, you are writing a business case that illustrates the value you bring to the company that others do not currently have. It is important you highlight new value that you didn’t possess when you were originally hired.
Tip 4: Analyze Your Mastery of Industry Knowledge
Next, take time to analyze how much you know now about the industry you serve, how you serve them, and your company’s product lines and processes.
Knowledge leak is one of the biggest expenses a company faces with employee turnover. While you can hire someone new, you can seldom quickly replace the knowledge a former employee has gained during their tenure at your company. Most studies show it takes about 12 months for a new hire to fully grasp their new role at a company.
If your company had to replace you tomorrow, what is the value of the knowledge you now have about your role that you didn’t have when you started? How does that equate to bottom line profitability for the company?
For example, if you are a copywriter for a company and you have mastered writing pitches that speak to the pain points for your specific industry, how have your letters or written words generated more revenue for the company? How long did it take you to begin crafting letters that converted? The length of time is roughly the same amount of time it would take to train someone new to learn the industry.
Your answers to both questions allow you to craft a business case that shows the bottom line value your new knowledge brings to the company.
Tip 5: Outline Your Plans for Future Business Success
Finally, spend time outlining the goals you have for the next year. What are the targets you are aiming to achieve, and how will those goals impact the bottom line? Knowing the answers to these questions and being able to present them means even if the decision to give you a pay raise is no, a discussion about bonus pay is not off of the table.
Also, include any new responsibilities you may be planning or expected to take on over the next year. Only include this if you truly have the time in your current workload to take on new tasks. Being prepared to discuss this also means you have something in your back pocket to discuss should your initial request for a raise be denied.
Remember, employees are called “Human Resources”. At a finite level, you are another expense on your employers bottom line. In order for a business to succeed financially, your boss must keep expenses down while generating more revenue through their department. That is the language of business.
So build your case and toot your own horn. Just remember to make your case about how you improve the company’s bottom line through time saved, money saved, or new ideas that generate profits. If you can do those things, it’s time to ask for a raise. If you can’t, it’s time to evaluate how you can raise your game as an employee so that you can ask for more compensation down the road.
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