When to ask for a raise (+ tips to make sure you get one)
Despite the ever increasing cost of living, many workers still fear asking for a raise simply because they do not know when to do so, nor how to ask for one.
In this guide, I’ll walk you through the best time to ask for a raise and leave you with practical tips that will help you confidently approach your employer for a raise.
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What Are The Odds Of Getting A Raise?
While every worker’s situation is unique, key findings include, but are not limited to;
- An estimated 37% of workers have asked for a raise with women now just as likely as men to ask for a raise.
- 70% of people who ask for a salary increase successfully gain a raise of some kind, even if it’s not to the level that they wanted.
- In 2022, companies increased compensation costs including raises and bonuses by an average of 3.9%
- Most workers who ask for a raise can expect a 3-5% increase in their salary, although this can depend on a range of factors including the industry.
- Your location can impact the level of your pay rise. In 2020, workers in Los Angeles saw a 6.5% increase compared to 3.3% in San Jose.
The above statistics show that the thought of asking for a raise needn’t fill you with fear as there is a very realistic chance of seeing your wages climb by at least 3%.
The extra $1,500 (minimum) on a $50,000 salary should be more than enough of an incentive to pose the question – not least because inflation is more than twice this rate.
How Often Should You Ask For A Raise?
Following this, you should not ask for a raise more than once per year – except when certain situations occur.
Knowing how to negotiate your salary can be particularly useful during the recruitment stage. After all, employers will want to hire the best candidates for their companies, especially in response to the great resignation.
When Is The Right Time To Ask For A Raise?
You may feel that you are deserving of a salary increase, but it counts for very little if you are unable to convince your bosses that you are not currently compensated to the level that you deserve.
The following five instances are all good indicators that your hopes of securing a raise will be high.
1. The Market Rate Is Higher For Your Position
Perhaps the most effective way to determine whether you’re underpaid is to compare your salary to the earnings of other workers who do the same job. There are plenty of online platforms to value your resume while checking job listings and speaking to other people in your industry should provide further clarity.
There are other factors to consider, such as your experience and location, any clear discrepancy between your earnings and the average salary for someone in your role should not be ignored.
2. It’s Time For Your Annual Review
An annual review is the opportune moment to bring up your hopes of an increased salary. A lot can change in a year ranging from living costs to your experience and achievements. It is particularly useful when you have gained positive feedback from your boss or when you have successfully completed your first year with the company.
If it is your first review while working for the company, you should ask for advice on how the meetings are usually handled. This will help you prepare and find the opportune moment to raise the topic.
3. You Have Had An Increase In Workload
When your employer expects you to complete more tasks or take on more responsibility, you are well within your right to ask for a pay rise. In most cases, it is a sign that your boss trusts you as a worker. As such, they will want to keep you happy, not least because happy workers are 13% more productive.
Whether the increased workload has been formal or informal, the fact that you’ve noted it suggests that you deserve a pay rise. So, this is a good example of when to ask for a raise from the company.
4. When You Consistently Exceeded Performance Goals
At the time of accepting your job role, you will have been expected to hit certain targets. In fact, you may have had a probation period. If you have consistently outperformed those expectations, it could be a clear sign that you are due a raise. It is particularly noteworthy if your innovations were a catalyst for success.
If your output has contributed heavily to the company’s success and strong quarterly review, you should have no fear about asking for a raise. After all, your successes deserve to be rewarded with a suitable salary.
5. Your Employer Will Lose Money When You Quit
When thinking about salary negotiations, it is always wise to consider your employer’s perspective. Every decision is financially motivated. If you are an asset to the company, losing you could cost them dearly. Not least because finding your replacement is very expensive.
Having already analyzed your worth to the company, you should know whether losing you would cause issues for the company. If it will, you are strongly positioned to leverage success from this fact.
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What If They Refuse?
The statistics show that worthy candidates have a very good chance of securing a raise, not least because we are currently living in an employee’s market. Nevertheless, there are many reasons why your bosses may refuse the claim. Some of the most common reasons include;
- The company has encountered financial difficulties and simply cannot afford to provide salary upgrades at this time,
- Your boss may feel that your performance does not merit the financial rewards of an increased salary,
- The company may be preparing to restructure its pay scale for the entire workforce over the coming months,
- Your boss does not agree with your rationale or believes that your current wage is in line with your role and experience,
- The business is in a transitional period or cannot dedicate more capital to employee wages for the foreseeable future.
If your request is denied, you must stay calm and avoid showing anger. Asking your employer to provide their reasoning can be very useful as it will give you a better understanding of their perspective and ask for advice on what can be done to secure a raise when you revisit the topic later on.
Prepare To Offer Alternatives
When a pay rise is out of the question, there are a number of alternatives that may be proposed. For starters, you could ask for a promotion, which would mean taking on added responsibilities in return for a higher salary. It could save your employer time and money if they are actively looking to recruit for a new role that’s above your current position.
Another option is to look for ideas that indirectly increase your salary or will reduce your overheads to support your financial wellness. Popular choices that bosses may accept after rejecting the initial request include;
- Suggesting that you work from home on a permanent basis. Over one in three workers can now complete their tasks exclusively from home. If you fall into this category, it can be a great way to save time and money on commuting. You may even want to suggest working an extra hour per day under this model, which would help you earn more money.
- Ask for additional vacation time. An extra five days of vacation per year, for example, can improve your quality of life. It could potentially open the door to trading them in for extra earnings.
- Suggest a performance-based improvement. If you work in sales, for example, you could negotiate an improved commission rate or secure a bigger bonus for hitting certain targets during the week, month, or year. This takes the risk away from your boss as you’ll only get paid more if you actively boost the company’s bottom line. Meanwhile, it removes the ceiling on your potential earnings.
If your boss continues to reject your suggestions, it may be time to start looking for a new job. Do not hand your notice in yet, though. Wait until a better offer is made and then resign.
Why Asking For Too Much Could Hurt You
When entering the salary negotiation process, it is unlikely that you will get everything that you ask for. Therefore, you need to think of yourself as a salesperson trying to sell your time and experience. Despite knowing that a 5% pay rise is usually considered a success, you should probably try to achieve more.
It is generally suggested that a 10-20% pay rise is a good starting point for the negotiations, depending on how long it has been since your last raise. The percentile scale is more useful than setting a monetary target because securing a $2,000 raise in a high-paying job will seem far less impactful than in a low-paid role.
Conversely, if someone on $40,000 suddenly asks for a $30,000 raise, it’s likely that the salary negotiation will lose all credibility before you’ve even started.
Knowing Your Worth As An Employee
Honesty is always the best policy when attempting to secure a raise. Therefore, it is vital that you prepare for the situation by knowing your worth as a value. Almost half of all US workers have quit at least one job due to feeling undervalued or unappreciated. Ask yourself the following questions and you will quickly determine whether your wage is fair;
- How much do other companies pay employees completing similar jobs?
- How much do your co-workers get paid for similar or comparable roles?
- What is your value to the company due to your experience?
- What achievements and accomplishments have you made during employment?
- Has your salary grown in line with inflation over recent years?
5 Tips to Use When Asking For A Raise
If you think that now is the time to ask for a raise, you should trust your instinct. You should try to view the process in the same way that you would view applying for a new job because the right preparation will optimize your hopes of success. The following five tips will help:
Plan Ahead To Negotiate That Raise
Asking for a raise is a big moment, especially as you will probably only get one shot at it per year unless your boss asks to put the idea on ice for a few months. Therefore, it is vital that you take a run up at the process. It will allow you to make a compelling case and feel more organized.
Your plans may include listing the reasons you want a raise. This could mean documenting the average salaries at other companies, highlighting your time at the company, and showing that your wage hasn’t increased to the same level as inflation.
Use Your Work Contributions As A Leverage
Perhaps most importantly, you need to prove your value to the company to confirm that you are worth the increased salary. If you have achieved great things for the company, you should list the accomplishments. Whether it’s an Employee of the Month award, boosting sales, or preventing a company disaster is up to you.
It is very easy for successes to go unnoticed but this is your chance to stand out and stake your claim. On a side note, if you have an offer from a competitor, this can be used to gain further leverage.
Determine When Your Workload Increase Merits A Raise
The research you complete during the planning phase doesn’t only prove your worth to the employer. It also promotes a sense of self-value and will help you understand how big your pay rise expectations should be. Settling for the Cost of Living Adjustment (COLA) rate isn’t really a pay rise.
Of course, it is also a chance to be truthful with yourself. If you don’t honestly believe that your work is sufficient for a salary increase, it might be better to go the extra mile over the coming months before revisiting the notion.
Be Confident
Casting a confident figure and maintaining an authoritative voice throughout the negotiation can have a telling influence on your hopes of getting a raise. If your bosses think that you will fold at the sign of resistance, they will probably reject your plea. It is another reason to plan what you wish to say.
Confidence can also manifest as being willing to seek alternative employment and ask your current employer for a referral. However, you may want to leave this until all hopes of a pay rise have been lost.
Deliver Your Intent Through Writing
When you ask for a raise, it is likely that your line manager will need to seek permission from their superior or the business owner. Therefore, it makes sense to put the request in writing. It will support your initial requests and prevent the threat of unfulfilled promises or bosses “forgetting” about it.
Actively putting your request in writing will additionally give you the chance to check that all achievements or key points have been listed. So, it can boost your hopes of getting the raise you deserve.
Asking for a raise is the easiest and fastest way to make more money. But it’s not that simple. Here’s my ultimate guide to how to ask for (and secure) your next big raise!
Frequently Asked Questions
Can I Get Fired For Asking For A Raise?
Technically speaking, an employer may sack you for virtually any reason outside of protected characteristics. However, it would be very bad practice from them because it can harm worker morale across the team. Unless you respond angrily, losing your job is unlikely.
How Long Should You Work Without A Raise?
Every worker is different but most find that they should expect a raise every 1-2 years. However, comparing your salary against those of your coworkers and industry as a whole will highlight whether you are underpaid or not.
Can You Be Paid Less For Doing The Same Job?
Yes, although it is bad practice, an employer can reduce your wages, although they would need to pay you at the agreed rate for any completed work. Also, if an employer pays you a different salary to a coworker who completes a similar job, they must be able to justify this.
Can I Refuse To Take On More Work Without A Raise?
Employees have the right to reject extra work without extra pay. But you will want to stay respectful when rejecting the request. Explaining that it’s someone else’s job or could disrupt you from your primary responsibilities. Be clear but kind in your delivery, always.
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Ramit Sethi
Host of Netflix's "How to Get Rich", NYT Bestselling Author & host of the hit I Will Teach You To Be Rich Podcast. For over 20 years, Ramit has been sharing proven strategies to help people like you take control of their money and live a Rich Life.
