How to get a raise (hint: it’s all about your ROI)
Getting a raise is a lot easier when you can demonstrate you’re making a positive difference to the bottom line
One of the questions I get most often from junior and intermediate workers is this:
“How do I get a raise? I’ve been working at this company for a year now, and they seem to like me. Shouldn’t they give me more money?”
Well…no, not necessarily. A raise isn’t a prize you get for showing up to a job every day for a year. With a few exceptions (like cost-of-living increases built into your contract, for example), raises are supposed to be a reflection of the increased value you deliver to a company.
In other words, if you want a raise, you have to demonstrate that while a year ago you were worth $X to your employer, now you’re worth $Y.
How to demonstrate your increased value
A lot of people find this part difficult, mostly because it can somehow seem awkward or uncomfortable to assign a dollar value to ourselves. But put yourself in your employer’s position: They’ve got a budget to balance, P&L statements to defend, and possibly shareholders to appease. So while they may love you as a person when it comes to your salary, you’re really a line-item like anything else, and they’re looking to get maximum value for minimum expenditure.
But don’t panic – there are lots of ways to demonstrate that you are delivering a better ROI (return on investment) than you were a year ago!
Here are some strategies to try:
- Demonstrate how you’ve increased revenue. Have you brought in a new client? Increased the spending of an existing client? Contributed to a new business pitch that generated new business (and new revenue)? Did you create a website or Facebook group that generated some new business? New business means new revenue – and there’s nothing wrong with asking to share some of that revenue.
- Demonstrate how you’ve reduced costs. Not every role is in a position to generate new business or revenue, but most roles can contribute to reduced costs. Did you come up with a new process that resulted in cost efficiencies? Did you find a new supplier that cut the office supply costs in half? Did you spearhead an energy-saving initiative that reduced utility costs across the organization? Quantify the savings you helped achieve – it’s easier to ask for a raise when your manager can see you’re focused on the bottom line.
- Demonstrate how you’ve increased productivity. Have you implemented a system that allowed the company to reduce the need for freelancers or contract workers? Are you now processing significantly more orders than you were a year ago? Raises are supposed to reward increased efficiencies, so make up a chart showing how productivity has increased during the past 12 months as a result of your efforts, and your ‘raise conversation’ will go a lot more smoothly.
- Demonstrate your indispensability. This is a tricky one because ultimately, no one is irreplaceable. But if you’ve taken on tasks that languished for ages because no one else wanted to do them – like, say, spending a month of late nights cleaning up and reformatting a huge database, and of which you are now the undisputed expert – it can be helpful to gently point out that were you to leave (for a better-paying position), your employer might be up a creek without a paddle.
Your best approach is to write it down
The best way to ensure that salary negotiations don’t get weird and emotional is to approach it like any business meeting: Prepare a list of the points you want to cover (your accomplishments, revenue generation, productivity increases, etc.), and then make your case calmly, clearly and succinctly.
The more you can demonstrate that you see the big picture (“I know the company only had 5% revenue growth last year, so I know none of us are coming in for huge raises this year…”) and that you’re making a rational business case (“I’m more valuable now than I was a year ago, and here’s why…”), the more likely you are to get what you want.
BONUS TIP: Sometimes managers can’t offer you more money because they’re constrained by salary caps imposed upon them by their managers. That’s okay – there are other things you can ask for: increased vacation, car allowances, professional development/education credits (which may come out of different budgets than salaries), getting included on the trip to ComDex, performance benefits…you’d be surprised.
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For more information on navigating your next IT career move, check out our Guide to Finding the Perfect Tech Job.