Why Now Is a Good Time to Ask for a Pay Raise

If you feel that you deserve a pay raise, then this is the right time to approach your boss. Employers are increasingly struggling to find qualified employees, raising their salaries to fill the many open positions.

In 2021, a record number of workers quit their jobs which is known as great resignation, A Pew Research Center survey found that employees quit because of low pay and lack of opportunities for advancement.

Current labor shortages give workers an advantage in the job market, especially as remote work has opened up more opportunities. This is a good time for those who believe they should be making more money to ask for a raise.

Workers also have another advantage: It’s usually more expensive for your employer to replace you than it is to increase your salary.

“The hiring process is very long and expensive, and with labor shortages it is in the best interest of employers to retain the people they have,” says Nicole Victoria, a money coach and author of an upcoming book on financial advice for Millennials. the author said. “It’s easier to retain an older employee, and it makes you an easier sell if you’re a good employee.”

Here’s how to successfully negotiate a higher salary.

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display your results

Replacing workers is expensive, given the time and resources companies spend interviewing and training new employees. Inevitably, there will be a period of time during which a new employee will not be as productive in the role than a more experienced individual.

“Keeping the same person can result in higher productivity, higher profit margins for the company, so overall it’s in their best interest to try to retain you,” Victoria said.

But if you want a raise, be prepared to demonstrate your value to your employer.

Start by doing a self-review, evaluating your performance over the past six months or a year. Highlight how you have made your company more profitable or otherwise added value to the organization. Victoria also recommends being prepared with a handout that provides these types of metrics.

“Showcase your results, what you’ve accomplished and what it means to the company or your boss. Sometimes your employer doesn’t realize all the things you do,” she said.

Know your indemnity limit

It’s okay to ask your peers what they make to determine whether or not you are underpaid given your role and duties. Also consult more senior consultants as to what they think your salary range should be.

“Salary transparency should be discussed among all employees,” said Nick Meyer, a certified financial planner with SHARE Financial information on the social media platform Tiktok, “It’s important to know how much you’re getting paid compared to your peers, because it’s an argument you can use with your manager if you’re getting paid less than people doing the same job as you.” Have been.”

It’s also perfectly legal to ask co-workers about their salaries.

“It’s not illegal to ask others what their salary is. It’s a good way to find out if it’s in line with what the company typically pays for your position,” Simonette Financial Group, a wealth management said Bill Simonette. strong.

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Also refer to sites like Glassdoor to learn what compensation is appropriate for your job title and industry in your field.

Some industry organizations publish reports with compensation ranges for different positions and experience levels. You can bring these up in a meeting with your manager – learn where you are in terms of your job responsibilities and experience. fall. Another option is to find out what other companies are paying for lateral positions,” said Hannah Szarzewski, founder of Blue Mountain Financial Planning.

look for a competitive offer

You may have an added advantage if you present your boss with a competitive offer from another firm at the desired salary.

“Before the meeting, get an offer from another employer. Tell the current employer that you’d love to stay, but you’ll need them to match another offer. If they don’t, take another job,” JP Geisbauer, principal at Centerpoint Financial Management.

“It always helps if you’ve applied for other jobs and have a competing offer, even if you’re not thinking of leaving,” Mayer said.

Make It About Them – Not You

Inflation at highest level in 40 years raising the price of many goods and services, But your own increased cost shouldn’t be your main argument for a salary adjustment.

“It’s fair to mention inflation as a reason to increase compensation, but you’d need more reasons than that because everyone is facing inflation. So it doesn’t separate any one person from their peers,” Szarzewski said.

In other words, your employer cares more about how your work affects the organization, and less about your own costs like rent or car payments.

“Put together all the things to show someone why you’re seeking that compensation, so you’re not saying it’s costing me 10% more for my rent, so you should pay me more.” . Maybe it will work, but it’s kind of shaky,” said online financial advisor Katie Brewer.

“Don’t say my car payment is going up or my mortgage is more expensive. Walk in and say, ‘Here’s what I’ve done for the company, here’s how I’ve helped increase profitability metrics. Victoria said. “Give everything a number if you can, talk about the value you bring to the organization. Those are the things that are going to make them want to keep you, versus telling them that What’s going to benefit you?”

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beyond pay

If there isn’t room for the pay increase you’re asking for, consider how else you would like to be compensated.

Victoria added: “Negotiate other points as well, such as increased contributions to your retirement plan, the ability to work from home or an extra week of vacation. Think about what you want, and ask for those things.” The ones that are most important are of no importance. Additional cost to the company but important to you.”

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