With Q4 around the corner, it’s a good time to start thinking about your performance evaluation at work, especially if you want a raise. When I worked full-time in corporate America, I used to salivate at every thought of getting a raise. Money was a huge motivator for me while I was building my career. I wanted financial independence as quickly as possible.
The funny thing is it took me a long time to specifically ask my bosses straight up for a raise. I didn’t have any issues voicing my desires for promotions, but I relied on my boss to assume I expected a raise along with a new title. Lesson #1, never assume your boss can read your mind.
Anyway, it took time for me to have enough confidence to openly talk about my compensation. But once I got through that first conversation about getting a raise, it got a heck of a lot easier after that. Not only were my efforts were worth it, I wished I hadn’t waited so long to ask for a raise.
Keep your finger on the pulse
If you want a raise, it’s important to be clued in on what’s going on in the economy, your company and its sector, and the global markets. For example, if you asked for a raise the day after Brexit was announced when stock markets around the globe were plummeting and people were (temporarily) panicking that the global economy was going to collapse, you’d come across looking like a total idiot.
So, what is going on these days? The unemployment rate for August held steady at 4.9 percent, the same rate since June. Compared to 5.1 percent a year ago, it’s fairly flat. But we’re still seeing a lot of companies downsizing. My general sense is make the most of your 9 to 5 and be cautious with your money.
If you work for a startup, be especially cautious. It’s shocking to me that so many startups are horrific at managing their cash flow and continue to shut down overnight leaving their employees in the lurch. A recent example is Mode Media, a “unicorn” startup that was once valued at a billion dollars and projected to generate more than $100 million this year, but “POOF!” it’s gone.
The economy isn’t much to holler about either these days and of course the upcoming election – that most of us don’t want to think about – leaves a lot in question about what our country’s economic growth is going to look like in 2017 and beyond.
Recent salary trends and forecasts
Salary budget projections for 2017 are 3.1 percent on average. That’s just a hair higher than this year’s average. While that might not be much to celebrate, the decent news is it’s higher than the U.S.’s target 2 percent rate of inflation.
Top performing employees might expect to see salary increases near the 6 to 8 percent range, but there are a lot of variables to come into play on an individual level. The sense I get is plenty of companies are staying cautious, especially those with international exposure, and many firms aren’t super motivated to increase salary budgets into next year.
However, a few industries in particular are expected to offer nice salary boosts next year, namely tech, legal and compliance. According to Robert Half, these roles are expected to offer the biggest gains:
- Litigation support / e-Discovery professionals: 7.3% (junior level) to 8.9% (senior level)
- Lawyers: 5.8% (senior level) to 6.9% (midlevel)
- Compliance professionals: 6.4% (senior level) to 6.9% (midlevel)
- Data scientists: 6.4%
- First year legal associates (large law firm): 6.2%
- Front-end web developers: 6.2%
- Big data engineers: 5.8%
- Network security engineers: 5.7%
- Contract managers: 5.4%
- Compliance analysts: 5.4%
Asking for a raise
Timing. If you want a raise, don’t underestimate the importance of timing. Sometimes you have to be patient and wait it out if the financial health of your company is dicey. For example, if your company just held a town hall last month announcing they are scaling back and implementing a hiring freeze, they will think you fell asleep in the meeting if you come to them asking for more money right now.
It’s also important to be patient if you’re simply too new at your job. I had an employee come to me asking for a raise after he’d only been at the company about 7 months – straight out of college – and I had to try hard not to laugh in his face. Okay that might sound a bit mean, but he was not a good performer and he totally fit the mold of a stereotypical clueless and entitled millennial. I had to bite my tongue. Asking for a raise when you’ve been at a job less than a year (and bad at your job) can make you look pretty immature and restless. You’ve got to be patient and earn it.
If you have an actual new job offer on the table that you’re contemplating accepting, please negotiate your salary before you sign the contract. If you take the offer as it stands in hopes of asking for a raise in six months, your boss is probably going to roll his/her eyes at your six month mark and say no and wonder why you took the job in the first place.
On the other hand, if you’re a well performing employee and have been in your role for more than one year, start talking to your boss well before the year end review process is nearing completion. Promotions and raises usually have to go through a vetting process with upper management that can take a month or longer to approve. By the time you’re sitting down to have your actual year end review meeting, the cutoff for submitting compensation changes for Jan. 1 is usually long past.
Red tape. Not only does it take time to get a raise approved, it can take cutting through a lot of red tape. I was once in compensation negotiations for over 3 months with one of my employers. Even though the local office wanted to help me, there were so many back and forth hurdles that had to be overcome out of the company HQ. It almost drove me crazy, but there wasn’t any avoiding the various layers of review.
Also, like it or not you’re competing with your peers for money. For example, my boss was given a set dollar amount each year that he had to allocate across our entire department. Not only was the size of the lump sum out of his control, it was small. Even when he wanted to give some employees more, his hands were pretty much tied. Granted, my past negotiations have taught me that if a company is profitable and wants you badly enough, they usually have much more flexibility than they like to let on. The more valuable and likable you are, the more squeezing power you have.
Just understand that you may not be able to score a raise on your first try and it may take jumping through some hoops to get what you want. But it’s worth it if you don’t aggravate your boss in the process and can get a higher compensation in the end. It’s important to know what you’re worth and to be fairly compensated for your skills and efforts.
If you keep hitting brick walls, it’s probably time to consider plan B and start looking for a new job and an opportunity to engineer your layoff. Sometimes even despite your best efforts, a company isn’t able or willing to pay good wages. Changing jobs can be a great way to negotiate higher compensation and increase your happiness and financial security in the process.
In closing, here’s one of my favorite quotes. Randy Pausch was quite the remarkable professor and an inspiration.
“The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.” – Randy Pausch
Be sure to check out these related articles:
- How to ask for a raise in 10 easy steps
- Do introverts or extroverts make more money
- Feeling unappreciated at work? Here’s what you gotta do
Untemplaters, how badly do you want a raise ? Have you ever openly asked your boss for a raise before? What was your experience like? What do the expected salary increases look like for your sector next year?