This week, the Wall Street Journal published an article about the lack of science in salaries. Or as they put it more bluntly, “When it comes to pay, most companies are making things up as they go.”
If this is true, as one study of over 7,500 corporate compensation data schemes by PayScale suggests, then the bad news is that getting a pay raise is far more arbitrary than one might suspect. The good news is that, armed with this information, you know that you have the ability to take your destiny into your own hands. Though it may feel like an overwhelming responsibility, at least you know you are probably not frozen into a small lock-step pay raise by any formal corporate rules that are written in stone.
Payscale’s study found that nearly 60% of employers have no formal compensation structure or philosophy guiding their pay decisions. This means that negotiation becomes that much more important to getting the pay raise that you want. It also means that if you are looking to move between jobs and employers, your salary history can only hurt you if you’re looking to make a significant step change in salary levels. (Incidentally, Massachusetts just passed an equal pay law this week making it illegal to inquire into a job applicant’s salary history, which will help anyone who is looking to change the amount they make in the future, away from the anchor of a previously low salary).
If you’ve decided you want a pay raise, it’s time to start preparing yourself. Since many year-end reviews are a logical time to discuss things like past performance and year-end bonuses, this means you have 4 months to get ready.
What can you do in order to order to make sure you get a pay raise by the end of the year? Assuming you haven’t just started your job and the timing for discussing these things is appropriate in December, you can start preparing to do these 11 things now:
- Do your salary research. Make sure you get a sense of the maximum amount you could be earning and dig into some compensation data.
- Decide what your “number” (i.e. salary goal) is going to be. You can’t succeed in getting a pay raise if you don’t have a firm number in mind to work towards. This is especially important if you believe you will have to negotiate.
- Consider the decision-makers. Who do you have to convince in order to get a salary raise? Is it simply your manager, or is the decision actually not hers / his to make? Don’t spend all your time trying to make the case to the wrong person if there’s actually someone else you need to convince who holds the purse strings.
- Identify your allies. Who will support your getting a pay raise? It may be a manager with whom you’ve worked, it may be a VP of the department or even just your team members. If you believe you have allies, consider whether they have any leverage or can show their support for you.
- Ask for help. Though it may feel awkward, in some situations (e.g. you are pretty sure you are underpaid or you have effectively taken over a promotion-level’s worth of new responsibilities) you may even want to let your supporters know your goal is to ask for a year-end pay raise. You may not feel comfortable doing it for fear of the negotiation or ask falling through, but consider the potential positive impact of social pressure and awareness of your case.
- Prepare for a negotiation. How you do this is up to you: there are many options available to learn how to negotiate your salary. There are career coaches, there are online courses, and there are in-person training sessions. It seems inadvisable to try to wing something you’ve never tried before if getting that pay raise is very important to you.
- Document your successes and business accomplishments. If you are not sure what they are, you need to start setting some work goals for yourself now that you believe are achievable within the next 4 months. These may be goals that go beyond your day-to-day responsibilities. You may have to raise your hand for additional projects and responsibilities and really deliver on them. That’s why getting months of a head start on asking for a pay raise can be critical.
- Practice your ask for a salary raise until you can do it with confidence. You may know why you deserve a pay raise but if you can’t articulate it and be confident in stating the reasons, it will be hard for others to believe you deserve it.
- Anticipate the arguments against you. Be aware that there are larger factors out of your control such as a recession, a bad financial year for the company, a restructuring, or even layoffs. Knowing this context will help you assess your probabilities but don’t assume defeat just because some of these macro factors are at work. Instead, try to frame your pay raise request in a way that is sensitive to these topics.
- Create a back-up plan if your Plan A for a salary raise doesn’t pan out. Ask yourself if you’re willing to walk away. If you don’t get what you want, will you still stay at your company? If not, now is the time to make interview preparations in parallel.
- Consider getting a counter-offer or anticipating that you may have to leave your job or company in order to get salary raise you’re looking for. While you may or may not want to leave your employer, it’s a powerful marketplace tool during negotiation if you have an offer in hand from another company.
There’s no sure-fire way to guarantee you will get a pay raise but having 4 months to prepare yourself with the facts, allies, information and emotional fortitude you will need gives you a running head start on the process.
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