Because now is the right time to ask for a raise

If you think you deserve a raise, now is a good time to go to your boss. Employers are increasingly struggling to find skilled workers, with many raising wages to fill open positions.

In 2021, a record number of workers quit their jobs in what became known as the Big Resignation. A Pew Research Center overview found that workers quit because of low pay and lack of opportunities for advancement.

The current labor shortage gives workers leverage in the labor market, especially as telecommuting has opened up more opportunities. This makes it a good time for people who think they should be making more money to ask for raises.

Employees also have another advantage: it is usually more costly for your employer to replace you than to raise your pay.

“The hiring process is very time-consuming and expensive, and with a labor shortage it’s in an employer’s best interest to keep the people they have,” said Nicole Victoria, money coach and author of an upcoming report. Book on financial advice for millennials. “It’s easier to keep an old employee, and if you’re a good employee, it becomes an easy sell for you.”

Here are tips on how to successfully negotiate a higher salary.

Show your results

Replacing employees is expensive, given the time and resources companies spend interviewing and training new employees. Inevitably, there will be a period of time when a new employee will not be as productive in the role compared to someone who is more experienced.

“Keeping the same person could have higher productivity, higher profit margins for the company, so generally it’s in their best interest to try to keep you,” Victoria said.

But if you want a raise, be prepared to show your employer your worth.

Start by doing a self-review, evaluating your performance over the past six months or a year. Highlight how you have made your business more profitable or otherwise added value to the organization. Victoria even suggests coming prepared with a brochure that provides these types of measurements.

“Show your results, what you’ve done and what it means to your company or boss. Sometimes your employer doesn’t realize all the things you do,” he said.

Know your compensation range

It’s okay to ask your peers what they’re doing to determine if you’re underpaid for your role and duties. Also, consult more senior mentors about what they think your salary range should be.

“Pay transparency should be discussed among all employees,” said Nick Meyer, a certified financial planner who shares financial information on the TikTok social media platform. “It’s important to know what you’re getting paid compared to your peers, because that’s an argument you can use with your manager if you’re being grossly underpaid compared to people doing the same job as you.”

Asking their colleagues about their salaries is also perfectly legal.

“It’s not illegal to ask other people what their salaries are. This is a good way to gauge whether or not you’re in line with what the company generally pays for your position,” said Bill Simonet of Simonet Financial Group, a management property. company.

Also check out sites like Glassdoor to get a sense of fair compensation in your area for your job title and industry.

“Some industry organizations publish reports with salary ranges for different positions and experience levels. You can take these to your meeting with your manager — know where you stand in terms of your job responsibilities and experience. Another option is to find out which it’s the other companies paying for laterals,” said Hannah Szarszewski, founder of Blue Mountain Financial Planning.

Look for a competitive offer

You may have extra leverage if you present your boss with a competitive salary offer from another company.

“Before the meeting, get an offer from another employer. Tell the current employer you’d like to stay, but you’ll need them to match the other offer. If they won’t, do the other job,” JP said Geisbauer. director at Centerpoint Financial Management.

“It always helps if you’ve applied to other jobs and have a competitive offer even if you’re not thinking about leaving,” Meyer added.

Make it for them – not you

Inflation is at a 40-year high, raising the prices of many goods and services. But your own increased cost of living should not be your main argument for a pay adjustment.

“Citing inflation as a reason to raise compensation is fair, but you’d probably need more reasons because everyone is dealing with inflation. So it doesn’t make any one person stand out from their peers,” Szarszewski said.

In other words, your employer cares more about how your work affects the organization and less about your own expenses, such as rent or car payments.

“Put all the things together to show someone why you’re asking for this increase in compensation, so you’re not just saying it’s costing me 10% more for my rent, so you should pay me more. Maybe that will work, but it’s kind of weak ,” said online financial advisor Katie Brewer.

“Don’t say my car payment is going up or my mortgage is more expensive. Go and say, ‘Here’s what I’ve done for the company, here’s how I’ve helped raise the bottom line,'” Victoria said. a number in all if you can, talk about the value you bring to the organization. Those are the things that will make them want to keep you, rather than telling them how it will benefit you.”

Beyond the salary

If there is no room for the pay increase you are seeking, consider how else you would like to be compensated.

Victoria said: “Negotiate other points too, such as increased contributions to your pension scheme, the ability to work from home or an extra week’s holiday. Think about what you want and ask for things that are more important that aren’t worth extra costs to the company , but they have value for you.”