Hiring people is expensive and risky. Each new hire costs thousands of dollars. This is why companies are often open to “market adjustments”—by paying employees something close to market value, they keep experienced, proven employees at the company, save the expense of hiring a replacement, and avoid the risk of hiring a new person who is unproven.
This chapter is about getting a “big” raise of 8% or more—often described as a “market adjustment”—rather than a standard merit increase or a small “cost of living” increase.
As I discussed in “Do you have to quit your job to get a big raise?”, getting a big raise can sometimes be difficult without changing companies because raises are often predetermined and limited. But it can be done, and there’s usually no harm in seeing how much of a raise you can get.
The raise process
Your manager, her manager, and someone in Finance look at salaries across the company and on your team, and they see lots of numbers. Your salary is one of those numbers, and it’s mostly based on the value you add to the company. Maybe it was set when you were hired, or during your last merit increase, or when you were moved to a new department, but that number—your salary—was set in the past.
When there’s a discrepancy between your current salary and the value of your skillset and experience at your company, there’s an opportunity for you to get a raise. Sometimes management will rectify this discrepancy on its own, but most of the time you’ll have to bring it to their attention by requesting a raise.
The process for getting a raise is similar to the process for getting a promotion—you define your goal, demonstrate that you’ve earned it, and then present your case. But there are differences between requesting promotions and requesting raises. Promotions are mostly qualitative, explicitly focused on title and responsibility, and only implicitly affecting your salary. Raises are mostly quantitative, explicitly focused on salary and implicitly focused on responsibility.
Justifying your raise request
Your primary justification for requesting a raise is that your value to the company has changed since your current salary was set, and that is good reason to reevaluate and adjust your salary to reflect your increased value to the company. This means that many of the reasons people might suggest to justify a raise aren’t very effective. “I’ve been here for two years now” isn’t a very compelling reason for a raise. Why? Because businesses mostly exist to make money, and they pay people higher salaries because those people help the companies make more money. You may still be adding exactly the same value to the company as you did when you were hired two years ago—in that case, there’s no compelling business reason to pay you more money.
But while time in your job doesn’t explicitly justify giving you a raise, it could implicitly help you make the case for a higher salary because you may have acquired new skills, taken on new responsibilities, or otherwise found new ways to add value to the company since you were hired. Those are compelling reasons to pay you more money.
Here are some examples of changes that might justify a salary increase:
- Your qualifications have changed.—You have earned a certification, or a degree, or taken some training, or learned a new skill.
- You have taken on more responsibility.—You are managing people or projects that you weren’t when your current salary was set. Or you’re managing some part of the business that you weren’t before.
- The job market has changed.—There’s been a shift in the market so that your skillset is in higher demand now than it was when you initially took your job.
In all three of these examples, there’s a common theme: You are more valuable now than you were when your salary was last set. That is why you’re asking for a raise.
Here’s a high-level view of our process for requesting a raise:
Ready to get started? Start by defining you goal.