Key Takeaways
- Ask for a raise, the right way. Don’t bombard your boss with your accomplishments. Pick three that match your employer’s strategic goals.
- Prepare for a promotion. Visibility and relationship-building are the two best ways to keep your name in the conversation for a promotion.
- When you switch companies, ask for (a lot) more money. Don’t hamstring your salary negotiations by starting with what you made at your previous job.
In the previous article in our “Retire at 55” learning path, we talked about the power of side gigs and passive income for bolstering your retirement savings. But what about your day job? Chances are you could be making significantly more money in your career. However, it requires some strategic self-promotion on your part. In this article, we’ll talk to career counselors and salary negotiation experts about how to make a convincing case for a raise or promotion. Alternatively, we’ll teach you how to know when it’s time to jump ship for a better-paying employer.
How To Ask For a Raise (And Get It)
There’s no hard-and-fast rule that says you have to wait until your annual performance review to ask for a raise, says Karen Chopra, a veteran career counselor with Chopra Careers. “If you got a raise in January and landed a massive new contract in July, feel free to ask for more money.”
However, don’t assume that your manager knows all of your amazing accomplishments and is already considering giving you a raise, adds Kathryn Meisner, creator of Guidance Counseling for Adults.
“Assume your manager doesn’t know what you do and that money won’t automatically be brought up at your performance review,” she says. “Instead, practice saying these magic words: ‘I’d like to discuss my compensation.’ That can open the conversation.”
ShutterstockDo Your Homework First
Before you have that conversation, though, you’ve got some homework to do. It’s up to you to make a strong case for deserving a raise. Instead of waiting until the day before your performance review to make a list of your greatest hits, do it year-round. Meisner suggests creating a Google Doc that you update regularly. You should include your notable accomplishments and wins, especially ones that draw your boss’s praise.
When it’s time to make your case, don’t just email that entire doc to your manager, says Chopra.
“Look at the list and focus on the three strongest arguments,” she advises.
Keep in mind that the three strongest arguments might not be your personal favorites. Ultimately, your boss (or their boss) is the one deciding if you’re valuable enough to the company to warrant a higher salary. Meisner says that you have to see the raise through their eyes. Therefore, try to present accomplishments that align with their strategic goals.
“It’s great news that you saved 10 percent on office supplies, but if that’s not what’s most important to your manager and what they’re trying to achieve, you won’t make a convincing argument for a raise,” says Meisner.
How Much Should You Ask For?
“It’s really important to do some salary research about pay ranges for your specific job description,” says Chopra. She adds that the gold standard is a matching job listing from a competitor, with a posted salary range.
If you mention another job listing to your boss, don’t imply that you’re thinking about leaving, says Chopra.
“Instead, just say, “Someone else is hiring for my position and this is what they’re offering. I’d really like my salary to be commensurate with that offer.’ That puts an anchor down on a number.”
Meisner tells her clients not to limit themselves to what they find on salary comparison sites like Glassdoor or Salary.com. While web searches might give you some useful benchmarks for your industry and role, “There are many other factors that mean you can ask for more,” she says.
For example, is your role a real money-maker for the company? Have you significantly reduced costs? If you manage a team, have you increased employee retention? If so, do some calculations to determine how much money those items are worth to your employer. You may be warranted in asking for a lot more.
ShutterstockPosition Yourself For a Promotion
Many managers have an annoying habit of hiring outside the company for open positions, instead of promoting workers internally. Meisner says that employees can combat that habit by making themselves visible and building strategic relationships.
“When you meet with your manager for a performance review, don’t dwell exclusively on your past accomplishments, but tell them where you’d like to go in the future,” says Meisner. “Most managers actually want to help you develop, but first they have to know what you want out of a higher-level role.”
If you see an internal job posting for a job you’re uniquely qualified for, don’t assume that your boss or manager considers you in the running. Make it clear that you’re interested in the position and make a strong case that your accomplishments and qualifications are a great match for the role.
Be Visible
Visibility to your direct manager is only part of the promotion game. Meisner has clients who pick a new manager or executive every month to reach out to for coffee or a quick meeting. In the short term, this might lead to a promotional opportunity in their department. In the long term, that person might land at another company where you now have a networking contact.
What about pursuing a certification or additional degree in order to secure a higher-paid position in your company? Chopra says there are only a few situations in which this is worth your time. First, the certification has to be an absolute requirement for anyone in that job classification. Second, you shouldn’t pay for the classes out of pocket. “Negotiate for the company to pay for your certification and then it’s worth it.”
ShutterstockHow To Know It’s Time To Go
There are a lot of factors that make a job a good fit: the work is rewarding, your manager and coworkers are supportive, there’s room for growth, and the pay is good. Just as you wouldn’t stay at a job in a toxic workplace environment, you shouldn’t feel beholden to an employer that refuses to pay you what you’re worth.
“If you’re asking for a raise and you get a ‘no’ or less than what you want, that’s a data point,” says Chopra. “That’s useful information and could be a sign that it’s time to move on.”
Instead of dreading the job-search process, think of it as an opportunity to get that raise you wanted, or even more, says Meisner. “When you switch jobs, that’s where you’re going to make the biggest jump in salary.”
The key, says Meisner, is to not base your new salary negotiations on what you make in your current role. “People generally add 10 to 15 percent to what they’re making now, but if you’ve been in a position for longer than a year without a raise, then your skills are worth more than that 10 to 15 percent.”
Instead of basing your salary expectations on what you’re making now, look at the new position and how it fits into the company’s organizational structure. If you’re expected to manage more people or take on more tasks, make sure that you are fairly compensated.
Don’t Worry About Switching Jobs Frequently
Is there a danger to jumping from job to job too frequently? Will it look bad on a resume if you only spend a year or two at each company before moving on? Chopra doesn’t think so.
“You just need to be able to explain why you made each move. ‘It was a great organization, but the job of my dreams came along and I couldn’t say no.’ Or, ‘A year later, there was a merger and my former boss reached out.’ Stay at a job only as long as it’s a good fit for you, then find something better.”
ShutterstockWhat’s Next
Now that you’re earning and saving more money (or at least thinking about it!), it’s time to talk about investments. In the next article in our “Retire at 55” Learning Path series we’ll share expert tips for making your money grow so you can reach your retirement goals.
