It can be incredibly frustrating to feel like you are over delivering at work and being under compensated. So how do you know if you’re ready for a raise or simply wanting (or needing) more money? Here are a few different reasons why you might actually be ready for increased compensation.
1. You have the data to prove you’re not being paid market value.
Just like the prices of other goods are susceptible to inflation, the price of your labor is no exception. However, sometimes your employer fails to keep your pay level with the rate of inflation, and you wind up being paid much less than the market value for your skillset.
In order to communicate this effectively to your employer, it’s imperative you do your research. A little bit of work now can pay off tremendously as a salary bump, increased vacation time, or more equity.
One way you can research average salaries or pay rates for your job role and location without leaving your couch is by using a tool like Glassdoor. Glassdoor allows you to access anonymous, employee-reported data about compensation at various companies.
If you’re feeling a little more adventurous and care to dig up your own data (which can be much more valuable because you can point your employer to exactly where you got the numbers from, rather than the slightly suspicious internet salaries), try polling your peers. If you’re part of a Slack group of similar workers in your area, see if you can send a Google form or other type of survey to collect data (feel free to make it anonymous if that makes others more comfortable). Try attending a virtual or in-person networking event and asking people to share a little bit about their compensation. Phone a friend in a similar role and ask them to give you a range for their compensation. When you are asking others about their monetary compensation, always be careful to maintain their privacy if they have asked you to when sharing their numbers.
However you choose to obtain the data, if you’re being paid significantly less than your peers in your location and nationally, you might be ready for a raise.
2. Your skillset has improved or you’re solving more complex problems.
If you recall back to when you were in primary school, you might remember how course curriculum built upon itself year after year. You knew you were ready for the next grade when you could complete designated course work successfully. When you started learning math, you might not have been able to do multiplication, but a few grades later, you might have been able to triumphantly perform geographic transformations.
This applies to your job now. If your skillset has improved to the point where you can solve more complex issues, it might be time to think about preparing for a raise. Your new abilities qualify you to be able to perform more difficult work, and the more difficult a job is, the harder it is to find someone who can do it. Therefore, your skillset is in greater demand and requires a higher pay, and it might be worth preparing to ask for a raise.
3. Your daily work is directly tied to your company’s revenue.
If you had a tree that necessitated you pay money to care for it, but as it grew, it produced 2x the amount of money that you invested in it, would you give it away just because you needed to invest capital upfront?
You are the tree in this scenario. Your employer might invest $50,000 in you each year (as your compensation), but perhaps they get $100,000 or $300,000 of revenue from your work! When your work translates to dollars for your company, it’s easier to discuss a raise with your employer.
You don’t have to be a salesperson to be directly impacting your company’s bottom line. Perhaps you’ve automated a process that has greatly shortened the time it takes to either hire new talent, train new employees, or retain great workers. Maybe you’ve been able to simply a computing process or switch software providers, lessening your company’s overhead. Or you might have successfully launched an advertising initiative that brought in millions of dollars of sales.
Another way to look at how your daily work might be directly tied to your company’s revenue is identifying what key functions or process you maintain. If you’re a highly skilled executive assistant, you might not be personally involved in building a product your company sells (and therefore generates profits). But, you might be running so many internal processes that losing you would require everyone else to forfeit their time on their positions to start doing what you’re doing.
No matter the type of benefit you bring to your company, having data to back up your claims is critical. Similar to the first item in this list, quantifying your value as an employee can really highlight just how much the company has to lose if you walk away. If your daily work is directly tied to your company’s revenue, it might be time to ask for a raise.
4. You have significantly more responsibility now than when your original pay was decided.
You consented to specific compensation when you started your job based on the assumption you would be performing a fixed set of tasks. As time has gone on, however, you might have found yourself doing much more than was outlined when you were hired for the role. You might have started out in your position with an individual-contributor-type workload, only to find yourself now managing three peers and taking on additional tasks. When your responsibility has significantly increased while your pay has stayed stagnant, it might be a good indicator you’re ready for a raise.
5. Your specific skillset is in demand in the job market.
The law of supply and demand states that in a competitive market, the price for a certain commodity will increase as the demand for it rises. This applies to your job. If your skillset wasn’t in as high of demand when you were hired as it is now, your pay might reflect this economic principle and be lower than what is currently being offered for your skillset.
If you’re in a profession where jobs are plentiful and you can reasonably see yourself getting another job offer elsewhere, it might be a good time to ask for a raise. According to LinkedIn, roles with technology proficiency (such as engineers, digital marketers, UX professionals, data scientists, or AI engineers or researchers) are in high demand. If you work in this field, start researching what additional opportunities are available to you in your area or remotely. Couple this with investigating your market value (as outlined in the first section) to identify just how much of a raise
6. You have recently made a significant accomplishment at work.
What makes something significant to your employer can vary as widely as types of roles do. Some examples of consequential achievements could include the following list.
- Directly closing a large sales deal (perhaps 6 or 7 figures).
- Completing a sizable project.
- Managing a severe software incident.
- Automating an expensive, time-intensive process.
- Managing a team unexpectedly or with less help than anticipated.
If within the past few weeks or months you’ve successfully completed something along the lines of what’s suggested above, you might be ready for a raise. A profitable outcome demonstrates you’re able to deliver quality work in a timely manner, suggesting you are potentially a more valuable asset to your employer.
7. You’ve received a higher job offer from another company.
If you apply for a job and receive a higher offer than what you’re currently making, it can suggest a couple of different things highlighted on the list: it could propose you’re not being paid market value or that your skillset is in high demand. No matter the reason, applying for and being presented a job offer with better compensation could insinuate it’s time for a raise.
However, there is a major caveat to be aware of in this scenario. If you are applying for and receiving job offers simply as leverage to use against your employer, you should tread lightly when having compensation conversations. No boss wants to feel like they’re being manipulated. If they do feel that way, they might reject your petition for higher pay and fire you right then and there. If you are actively applying with other companies, but only for the purpose of negotiating up your salary, be prepared to walk away from your current role and actually accept a different job offer you have received.
8. You’ve hit a tenure milestone with your current employer.
Some employers are excellent about holding performance reviews and regularly assessing compensation on a biannual or annual basis. On the other hand, some employers won’t bring up compensation or promotions without it being initiated by you. If your company falls into the latter category, and you’ve recently hit some sort of appropriate tenure milestone (such as one year, two years, five years, or ten years) it could be an appropriate time for you to be ready for a raise.
If you’re in this scenario, consider using principles outlined above such as quantifying your market value and your impact on your employer’s bottom line. Make a list of real accomplishments you’ve attained since your last tenure milestone (perhaps in the last two years). If your employer isn’t going to start the conversation about offering a raise, think about responsibly taking matters into your own hands and presenting the data around why it’s time for you to get a raise.
9. Someone in a similar position with similar tenure recently received a raise.
Though we don’t advocate for comparing ourselves with others (each person has divine worth and unique talents), it can be helpful to compare your job situation with a colleague in a comparable position to determine if it’s time for you to receive a raise.
If you’ve been at your company for three years, and another member of your team performing the same functions as you started within a couple months of you, and they recently received a raise, you can use this data as a benchmark for assessing whether or not you might be eligible for a raise as well. Ask yourself a few questions, such as those listed below, to understand how your work and accomplishments contrast with theirs.
- Have I been able to drive the same amount of revenue as this person?
- Have I managed the same size team?
- Have I taken on the same amount of responsibility?
If you’re able to answer yes to questions like this, and the person you’re thinking of recently received a raise, it might indicate you are also for a raise.
If you find yourself in this scenario, it’s important to be conscious of your colleagues’ preferences regarding discussing compensation. You might not know when someone receives a raise directly, and it can be inappropriate to bluntly ask them if they received a salary increase or how much it was for.
10. You received a promotion.
It might seem counterintuitive, but some companies will promote employees without offering an associated pay raise. If you’ve received a promotion and will be undertaking more responsibility, it can be a natural time for a raise.
Luckily, in this case, your employer already seems to think you’re ready to handle additional work. You probably won’t need to convince them why you’re ready for a raise, but rather why a raise is appropriate. As suggested above, follow the guidelines to quantify your value and demonstrate your market value. Find ways to highlight the disproportion between the amount of work you’re doing and the amount your wage has increased.
11. You’ve undergone formal training to enlarge or improve your skillset.
According to the U.S. Bureau of Labor Statistics, workers with graduate degrees had the lowest unemployment rates and highest earnings of workers with education levels ranging from less than a high school diploma to a doctoral or professional degree. They found that the more schooling one received, the higher one was paid. If you’ve recently received formal training such as secondary education or trade school or bootcamp program, think about whether or not you’re ready for a raise.
The law of supply and demand applies here as well. If you now hold a more specialized skillset, your labor is in higher demand because it is in shorter supply (as not as many people have the same knowledge as you now have). Because of this, your work deserves to be compensated at a higher rate.
Conclusion
Whether you’re not being paid market value, you’ve recently made a significant achievement at work, or you’ve received a higher job offer at another company, you might find yourself in a handful of situations that suggest you’re ready for a raise.
Climb on, FinBase.
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