I did a Teams call with my boss. You close the door and start explaining that you haven’t had a raise in 3 years and would like to get an increase. Your boss explains that the company doesn’t have the finances to give you a raise.
The theme that you can’t be given a raise is a recurring problem in everyone’s professional life. Some people become complacent or ignorant until they cannot survive on their existing salaries, whereas others just leave their current employer searching for greener pastures. There has to be a better way to get a raise, right?
One of my friends owns a software development company. There was a mass exodus of developers from his company even though he did everything right. He had regular 1-on-1s, paid market-related salaries and even gave Friday afternoons off. The issue was that the staff did not speak up about issues they experienced (including their salary expectations) and therefore, nothing could be done about their concerns.
Where should your salary increase come from?
Imagine being an employer and being randomly asked for more money. In that situation, any employer’s automatic reaction is a simple no. From their perspective, they would need to balance the books and get that money back in another way. This might be through raising prices or cutting the budget on other things such as coffee and work functions.
What employers need to give you a raise
I remember from my employment days when I told my employer about how terrible the software code quality was. I explained to him in big terms that it doesn’t have dependency injection, the patterns weren’t followed and the shared libraries were breaking multiple systems with a small change. In my KPI review he responded with “well, it’s working!”. The lesson is this: when you speak to a manager or employer, you need to speak in terms of things that they understand. This includes conversations on legal implications, the performance of systems, time management implications and the financial impact that you’re having on the company.
For example, if you show your boss how many deals you’ve saved with the support that you provided and the amount of money this brought into the company, the conversation is a bit different than standing there like a beggar.
To avoid these types of trade-offs, it is best to prepare a good case of why you need a raise and why you deserve it. When an employer understands the value you add to the company and what you’ve done to make him more money – they are more likely to come to an agreement.
Be careful when you’ve carved out a niche with your current employer. If you then ask for a raise without anything substantial to base your raise on, it can be perceived as corporate blackmail.
How to measure your performance
Employees need a way to measure if it is worth working for an employer. Most of the time this is measured by money. In some cases, employers upskill their staff and provide extra value-added services such as child care and lunch. It’s important to take into account everything that an employer offers and communicate what your expectations are.
Employers’ expectations are often centred around doing the work they hired you for. For example, if you were hired to give support to clients, then this is what is most important to them. If employees are able to optimise the process and do better within the same timeframe, employers are able to do more.
Employees that are more skilled means that employers can make more money. This win-win situation builds better relationships between employers and employees. But if we don’t have a way to measure the value of an employee, then employers opt to maintain the status quo.
Career growth is not only good for you, but also for your employer. For example, if you become more senior in your role, you get things done faster and contribute more to the business.
How to start the conversation about an increase
To get your increase, you need to speak the language that your employer understands – money and time. A great way is to schedule a meeting to understand what your boss and company value and what you need to improve. You need to make your intention clear that you would be looking for a raise in a few months and want to add value (revenue, optimising processes, delivering dial lifting change or support) to justify the salary increase. When I had this conversation, my boss told me that “the company doesn’t have the budget for this” to which I responded: “Yes, that’s why I am starting the conversation ahead of time“. Take notes of what it is that your boss requires for you to get a raise. Make sure you note these down and formulate them into a measurable structure.
In some cases, your boss will not budge. If this is the case, you could either stay at your current rate, escalate this higher or look for a new job. You should however never blackmail your company by saying that you will leave if you don’t get a raise – rather just leave.
After the meeting, you need to have this in writing. Email this out to your boss with a note like this:
Thanks so much for the time yesterday. I am looking forward to the coming months to work with you to grow the company and become more than what I am today. As per our meeting yesterday, I will be working to achieve the following in the coming months:
1. Increase the turnaround time on support tickets to 1 hour during working hours.
2. Close x more deals
I look forward in making this a success!
How to gather evidence for your increase
If you’re working for a psychopath, then you will know about getting evidence together for your performance review. If you’re not used to collecting evidence, you might need to build routines to check and get the evidence you need. For example, I used to do daily morning exercises on what I needed to achieve and do a close of business at the end of the day where I moved emails to a folder on my desktop for every goal I had to achieve. Here are some of the other evidence you need to look for:
- Compliments from clients and co-workers – this can be on Hello Peter, emails or verbal. Note the date and the time and keep it in a word file on your desktop.
- Achievements and goals reached – you can show screenshots of JIRA/Trello, timesheet logs, project launches or other tangible proof
- Financial impact – Show sales numbers, number of deals closed or saved – whether a report, log, written case numbers or excel extract
- Legal proof – where legal cases were avoided by your efforts.
I know that many companies don’t do KPIs, as they find them restrictive and confusing. I’ve worked at companies where this is a mere formality for the Human Resources department! If you have a KPI, make sure you have the document at least 6 months before your KPI meeting.
All your goals have to be Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART). It doesn’t help if your boss wants you to build a space rocket, but you’re a secretary. Make sure that you can measure the outcome. For example, if you have more than 10 bugs from code written in a 3 month period of time, then you can only achieve a maximum of 3/5 for that measurement.
Preparing for the goals and performance review meetings
When I was employed, I didn’t like rating myself and sending the document to my boss. This felt unfair, as they had the opportunity to pull me down. I prefer a 360 where everyone around you can give their opinion about you. This makes sure the process is fair and impartial.
How to talk about the raise
Have your proof ready when you’re going through your KPI or chat after the defined period. Remind your boss about the conversation you had with him on date x. Keep the email trail with you in case he ‘forgot’. Explain that these are the goals that you both agreed upon and show how you have achieved them.
Your boss might say that there is no money. It might be worth asking if your improvement has impacted the finances, processes and service of the company for the better. If he says that it hasn’t, you have a problem. If it has, you can then start talking about money.
When your boss doesn’t want to give you a raise
It is also worth having industry-related job postings similar to your job with you during the discussion. You need to show your boss what is the going rate for your skill. Make it clear that you just want to be paid what the industry standard is. This is one of the last resorts, as they might tell you that they just cannot afford you. Here are some options for this before looking for a new job:
- Decide if the environment is worth the lower salary.
- Are you able to move to a different department or a different boss that would treat you better?
- Am I willing to sacrifice the bit of security I have here for more money?
In some cases, bosses play hardball. They will not tell you that you’re valuable until you resign. I had that in a previous job where I wasn’t told how valuable I was until the day I left. If you are willing to risk this job, you can resign and see if they will make a counteroffer. If you accept a counter offer, you will need to make sure that you get what you asked for and more. I have found counter offers to create a weird atmosphere in the office, as the loyalty that some employers expect is broken.
If you accept a counter offer, then your employer owns you
Getting a raise should never be asking for it and accepting the answer. You need to prepare and add more value to the company over time to prove that you deserve a raise. You need to align your language and deliverables with topics and outcomes that your boss and company find important. Use fields such as financial impact, legal impact, cost-saving, profit and streamlining when having the chat with your boss.
Take the time to build up proof of why you deserve the raise.
And have the chat.
If they don’t want to give you a raise, then you need to decide if you want to continue working for them.
Don’t make hasty decisions!
Frugal Local runs his own company (Effectify). He does software development and helps small businesses and startups with digital solutions. He enjoys writing articles and simplifying complex things – such as the article you’re reading!