Saving and managing your money is a great discipline to have, but to maximise your wealth you need to be constantly finding ways to grow your income.
For most people the first step in growing their income is to ask for a pay rise at work, so here are some great strategies and tips to help you convince your boss to give you the raise that you deserve?
Work two levels above your pay grade
I work in the consulting sector and one of the earliest pieces of advice given to me by my mentor was that I could grow my career and salary much faster by constantly working two levels above my pay grade.
What this meant was that I should constantly strive to get myself involved in difficult, high profile projects where I would learn new skills and develop my experience. At the end of each project, I would be able to demonstrate the benefits I delivered, the revenue generated and how my responsibility had grown – plenty of tangible reasons to justify a pay rise during my annual review.
To begin growing your career, talk to your employer about finding ways to develop your experience and increasing your responsibility. For example you might be given line management of other colleagues in your team or be able to spend some time working in a different role within the organisation.
Whatever new responsibility you are able to take on, try to manage your expectations around receiving an immediate pay rise. Normally your employer will expect you to take on the work, prove that you can do it well and then talk about the pay rise.
Raise you profile within the organisation
Whilst you are busy building your experience, it is also very important to raise a positive profile of yourself within your organisation, ensuring people are:
- aware of you
- understand the benefits that you provide to the business
Raising awareness of yourself amongst other staff and senior managers is less of a problem in a small business where everyone tends to know everyone else. However in larger businesses, raising awareness is much more difficult and even if people do know you, they may not fully understand what you have been working on and how you have helped the business.
I remember delivering a large, multi-million pound project and chatting to a senior manager about my next move and being shocked to find out that he did not even know what I had been working on previously. Obviously in this situation, my profile management had failed and it was a real lesson learned in not being complacent about what people think and know about you.
Some great ways to raise your profile are:
- Use internal communications such as email newsletters, presentations at staff briefings, senior management briefings and reports to let people know how well things are going in the area you run, what you & your team have achieved and any upcoming events or deadlines that people should be aware of.
- Make the most of formal and informal networking opportunities to spread the word to your colleagues. Most companies have away-days or training courses providing plenty of networking opportunities or there may be leaving drinks or after work events that you can attend. The great thing about these activities is that everyone has a common interest – they all work for the same company, so it is easy to talk about the work you do, no matter how social or anti-social you might be feeling.
Asking for a pay rise
Working two levels above your pay grade and raising your profile are powerful long-term strategies, but sooner or later it will be crunch time and you will need to pro-actively ask for a raise.
How you go about doing this will depend on the company you work for. Some organisations will have an annual performance review process in place that is used to determine incremental pay rises and bonuses. If this is the case for your organisation, then you should aim to use this process as the approach for negotiating your rise.
If your organisation does not have such a process then you will need to open up the discussion with your line manager, explaining that you would like a raise and ask what process the company recommends for discussing this in more detail.
Before asking for a raise
Before you ask for a raise, draft a letter outlining:
- The benefits (e.g. revenue growth, cost savings, new innovations, recruitment and training, team management) you have delivered to the organisation over the last couple of years.
- The amount by which you would like your salary to increase (ensure you do some research on recruitment websites to get comparative salaries for similar roles and levels of responsibility).
- The benefits that you feel you will be able to bring to the organisation in the future, such as bringing new clients into the business or further improving processes to increase cost savings.
Avoid using any self-pitiful reasons for justifying a raise, such as struggling to support your family or bad debts. Whilst the people who have to approve your pay rise will be sympathetic to your cause, they need to be convinced of the business benefit in order to justify the raise. Therefore help them to help you, by clearly stating the business reasons why they should approve an increase in your salary.
Request a meeting
This is important – do not submit your letter straightaway, instead request a meeting to discuss a pay rise. If you have a formal review meeting, request that the meeting should include an agenda item to discuss your pay rise.
You should then bring the letter into your meeting and use it as framework to negotiate your raise. The letter is a powerful tool to have, as it lays out your thoughts into a well structured justification for the raise and helps you to be a better negotiator.
On top of this it is also much more difficult for somebody to say no when speaking to a person face-to-face, than it is to say no when responding to non-personal communications such as letters or emails.
Be prepared to compromise
It is important to be aware that you may not be able to get the full amount that you asked for and ultimately you and your employer will come to a compromise over your revised salary.
Bear this in mind when selecting your negotiating tactics – if you want a 10% raise, then ask for 15%, but keep your expectations realistic as very few people are able to double their salary in one meeting and going in with too high a figure will do little for your credibility.
Avoid getting too emotional during the negotiations - yes this is a personal subject to you, but at the end of the day it is just a business deal and you should treat it as such. Be professional and avoid making threats about leaving the company if you don’t get the deal you want, as this approach rarely has the desired effect and can sour the working relationship.
If you cannot achieve the full figure that you originally wanted, think of alternative tactics to use such as asking for other benefits like additional paid-leave or coverage of your travel expenses in order to substitute the difference. You may also want to suggest another review meeting be set up in six-months where you can negotiate a further increase based on hitting some specific targets.
Remember growing your salary is often best done in small, regular, incremental steps, rather than just hitting a home-run every now and again.
Get it down in writing
Bring a pen and notebook into the meeting and be certain to document all the key points and agreements.
Once the meeting has finished, re-draft your letter to summarise those key points and agreements and send it to the person you met with.
Your employer should have done the same thing during the meeting, but it does not hurt to be pro-active and you should always avoid relying on other people to capture such important details.
Get written confirmation on the meeting outcome and if you agreed any additional review sessions, get them booked into the diary as soon as possible.
Ensure you continue to deliver
Having got your pay rise, don’t sit back and get complacent. Keep looking for more opportunities for personal development and ways to leverage future pay increases, in order to grow your wealth.
