Many of us assume that if we work hard and are effective, salary increases and career opportunities will follow. However, the reality is that doing well in your current position is necessary but not sufficient to grow your wealth.
In this post, we’ll explore the four steps to asking for a raise. This is particularly important for women, who face a pay gap relative to men. Growing income is one of the two levers to building wealth, so let's do this!
First, define your business case. Do not pass go, do not collect $200 until you have clearly defined why your achievements merit a raise. If you’re gunning for a pay increase, you need to document the heck out of the business value you deliver to your employer.
Your comparison point is your current salary. What and how have you earned more than that? Consider things like extraordinary effort, taking on new processes or tasks, implementing solutions that saved the company money, or introducing services that result in more repeat purchases.
Don’t freeze up in this first step. Don’t minimize your achievements. Reflect on the value you contribute and think creatively. If you're unsure about the quality of your business case, a savvy friend, family member, or mentor can pressure-test your thinking. They may see more impact in what you’ve done or help you think about it differently.
Use the “Situation, action, result” format to create your business case. For example, “The new client survey process I designed helped client service levels,” isn’t specific enough.
Try: “In 2016, client service satisfaction was 5% lower than 2015, which hurt Alpha Company’s revenue and reputation. I designed a new client survey, trained our customer service staff, and implemented the measurement system in order to capture client feedback in the first 30 days of their contract. This allowed our client service teams to identify service risks earlier, which improved client service satisfaction scores by 15%. This improvement contributes an estimated $1.2M in annual revenue.”
The first sentence describes the situation, the second describes the action, and the last sentences describe the result. Do your best to quantify results, and be okay with making informed estimates. Businesses are built usin estimates and models to inform decisions! Your case for a raise is no different.
Second, identify your negotiables. You've got the case for your pay raise. Now what? You need to come to the table with what you want. The good news is that technology is your friend in this effort. Just a few years ago, we had to rely on general industry studies, government data, or asking colleagues (yikes!) to benchmark our salaries. Today, pay data is increasingly accessible. Online sources like the Fairygodboss salary database provide more precise data on what your role is worth.
Decide the exact amount you’re asking for, and then increase it by at least 10%, because women don’t ask for enough. Then, prepare at least 3 other non-salary items that you will negotiate for, in addition to your pay increase. I recommend asking for the salary increase and one other item at a minimum as your “first ask.” Then, you’ll have 2 other items in your back pocket to introduce if you don’t get the full increase you’re requesting.
What else could you ask for? More paid time off; Better expense account - things like taxi service to/from work, flight upgrades, airline lounge memberships; Administrative support or a summer intern; Funding for conferences or classes for ongoing education; Working from another office location on a regular basis (say, you’re based in DC and you want to work from the London office once a quarter).
Next, practice! Once you have your business case and negotiables, practice with a savvy friend who can role-play your boss’ reaction. Prepare for objections like:
- “We don’t have budget at this time.” Ask follow-up questions to understand when and how budget could be freed up, and confirm that budget is the only barrier.
- “I’ll need to speak about this with my boss or HR.” Ask what your boss’ boss/HR needs to see, and how you can help prepare that case. Suggest speaking directly with other decision makers.
- “Your last raise wasn’t enough?” Clarify that this ask doesn’t come from a place of ungratefulness, but business value. Reiterate your business case and understand whether your boss supports your request.
Your goal in the discussion with your boss is to understand if she agrees with and supports your case. If not, confirm what she needs to see in order to support you in the future. Practice “closing” the conversation to ensure you leave with clear next steps to continue the discussion.
Finally, ask (and ask again). Set time with your manager and ask! Don’t wait for the next review cycle. When your case is ready and you’ve practiced your pitch, confidently approach your boss with the business case for why you have earned a raise. Take careful notes and be prepared to continue the conversation - I find it is rare to come to an agreement in just one discussion. Follow-up in writing with a summary of the discussion and next steps, to ensure you and your boss are on the same page.
A “no” or “not right now” with defined next steps is progress. A study of Australian workers found that women were 25% less likely to receive a pay raise when we asked for it. I’m not convinced this study is globally representative, but be prepared to persist with your case. You will need to own the next steps to secure that raise over time, if need be.
With that, I wish you very good luck. And, I look forward to sharing my experience on the other side of the table - when my employees have asked for a raise. I’ll share the good, the bad, and the ugly! What other advice do you have for securing a raise? If you used this approach, how did it work for you? I look forward to hearing from you.
xoxo, Ms. Financier
Women Don't Ask: Negotiation and the Gender Divide, by Linda Babcock and Sara Lashever
Ask For It: How Women Can Use the Power of Negotiation to Get What They Really Want, by Linda Babcock and Sara Laschever
High Performance Negotiation Skills for Women, Lecture featuring Professor Leah Thompson, Kellogg School of Management