"There's a lot of misconception about what goes into giving people a raise," says Lauren McGoodwin, career expert and founder of Career Contessa, who formerly worked as a recruiter for Hulu. "It's not as simple as you asking, and then [your boss] thinks about it and approves it." Timing, budgets, and your coworkers' performance also play a role in the outcome of your ask. When you know about these factors ahead of time, you can avoid surprise disappointment and preemptively strategize ways to overcome some of the obstacles that you might face.
"There's a lot of misconception about what goes into giving people a raise. It's not as simple as you asking, and then [your boss] thinks about it and approves it." —Lauren McGoodwin, founder of Career Contessa
Below, experts lay out four common considerations that go into granting someone a raise, along with actionable tips you can use to help the process along. Armed with this knowledge, you'll be able to make your proposal a whole lot more powerful—and have a better chance at scoring the pay increase you want.
Asking for a raise? These 4 factors influence the final decision
1. The company's big-picture financial status
Many people don't think about the serious role that budgets play in the pay-raise-granting process. "The reality is that the health of a business—no matter how great your individual performance is—will be a factor in how much of a raise you get," says Bobbi Rebell, certified financial planner and host of the Financial Grownup and Money with Friends podcasts.
You and your team may be exceeding all of your goals, but if the company as a whole is underperforming, there's likely to be less extra cash available for salary increases. That's why Rebell recommends being aware of how the entire company is doing before asking for a raise. "Manage your expectations and be mindful and realistic about the big picture,' she says. "The raise may be impossible for the company to afford, even if you have more than earned it."
2. Your team's official review process (or lack thereof)
Even if your performance reviews take place on a set schedule, the backroom conversations about raises generally happen well before you sit down with your manager. "A lot of companies that have formal reviews will only give raises at that one time of year," says McGoodwin. By the time your review rolls around, the amount of money allocated for raises has likely already been decided. Because of this, "it's a good idea to start talking about [a possible pay raise] months before, and not in your annual review," she adds.
In fact, McGoodwin suggests starting the conversation six to nine months in advance, and then checking back in with your manager with your specific salary goals four to five months before your review. (If you're a freelancer looking to raise your rates, ask your manager when the company's fiscal year starts and plan your ask around that date.) "Try to have these preliminary conversations with the decision maker and directly ask how you can ensure getting the highest possible range," says Rebell. During this chat, be prepared for your manager to give you a set of goals to reach before your raise is granted.
"A raise is a cost for [start-ups]—there is no incentive for them to initiate a conversation." —Bobbi Rebell, certified financial planner
And if you work for a start-up that hasn't yet implemented an annual review policy? In these cases, says Rebell, you'll likely have to take it upon yourself to start that dialogue. "A raise is a cost for them—there is no incentive for them to initiate a conversation," she says.
Plus, managers at small companies are often doing the jobs of several people and may not even notice if you haven't received a pay upgrade in a while. Rebell experienced this firsthand. "I was once assigned an associate producer who, after a while, asked me about a raise—she had not had one in five years," Rebell says. "She had not asked, and no one had advocated for her unprompted. Bosses came and went, so there was no one person who was keeping track of her career trajectory. She was always happy and competent. She was also taken for granted." That producer eventually did get a raise, says Rebell, but it wasn't enough to make up for the half-decade of income she lost by staying silent.
3. Your coworkers' raise requests
Chances are, you aren't the only person on your team asking for a raise once annual-review season comes along. In a perfect world, your manager would look at your performance—and yours alone—when deciding on your salary, but often, they need to take into account the entire team. "You are often compared to a group doing similar tasks, with the amount of the raise being on a scale, much like grading on a curve," says Rebell.
That's why it's important to openly acknowledge your own accomplishments to your manager all year long. "If they have to take percentage points away from somebody else in order to give you a bigger raise, you need to talk about what you're doing. Become comfortable taking credit and making sure that people know it's you who made things happen," says McGoodwin. Focus not just on how you met your deliverables and satisfied your goals, but also how you stood apart from the pack. "There's a difference between the responsibilities for your job and your accomplishments," McGoodwin adds. "You might have met your goal, but maybe you did it in a really unique way that’s worth taking notice of."
4. The way you ask
The worst way to approach the raise conversation is with a sense of entitlement, McGoodwin says. "The fact that you showed up for 365 days does not mean that you're owed a raise," she says. You should also avoid threatening to leave if you don't get the salary bump that you want—or, worse yet, asking for a raise when you aren't fully invested in staying with the company and then quitting soon after it's granted. (The latter tactic can impact your manager's reputation with their own bosses.)
Instead, McGoodwin says to focus on the reality that your bosses are people, too. "This is a human relationship with your manager," she says. "If they're going to bat for you, help them feel good about it." This means expressing genuine excitement for the projects you've been working on, coming prepared with all of the ways you provide value now, and tying it all into how the future you will continue to benefit the team. Who could say no to that?
Here are more tips for negotiating your salary like a boss—and once you get that raise, this is how you should adjust your budget to avoid "lifestyle creep."
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