How to request a long overdue pay raise?
July 28, 2018 7:41 AM   Subscribe

With a scheduled performance review coming up, it has been suggested to ask ahead of time for a rate increase. What is the normal timing for this? The company has had some difficulties and for several years had a freeze on salaries. Currently working at the same rate for the last 3 years, with an excellent record and 12 years with the same company. Is asking for a 10G increase on 80G reasonable? Last increase was 5G.
posted by silvergirlwon to Work & Money (11 answers total) 1 user marked this as a favorite
I wouldn't expect to actually get $10,000, but it's a reasonable ask. They'll negotiate you down a bit, of course.
posted by kevinbelt at 7:47 AM on July 28, 2018 [2 favorites]

Response by poster: Good reality check. What do you think about the suggestion of bringing it up in advance of the review?
posted by silvergirlwon at 7:56 AM on July 28, 2018

Best answer: Know your value.

The best way to do that is to interview. You don't need to accept another job. You don't need to want the other job. You need to know what your worth is and what people are willing to pay for it. Have they hired more people since their salary freeze? Did those people get paid as much or less than you, or did the company freeze your pay in order to cover the rising cost to acquire new personnel?

Freezes are short term solutions and companies tend to forget this unless they are reminded If your pay should be 10K more because that realistically is a 5K corrected salary and then 2 years of 3% inflation/merit raises that you've been ignored for... then yeah... its reasonable... otherwise, it is only a negotiating starting point.

I've gone up significantly in pay as I understood this.
posted by Nanukthedog at 7:56 AM on July 28, 2018 [7 favorites]

$80K in 2015 dollars adjusted for inflation is $84,780 adjusted for national average inflation. If you're in a hot housing market where things have been going up fast, it would be higher. That's just to break even with where you were before.

So assuming you've had some professional progress, $10K is not unreasonable, especially given that had you been getting raises during the difficult times, you've have had another ~$8K income in your pocket (minus taxes).

That said, management doesn't always see things that way and getting 12% raises is somewhat unusual. Like Nanutkthedog said, know facts and figures. Is the company public so you can look up the financials? Can they afford to give you a $10K raise? Could they afford to give everyone a 10% raise? Could you make more elsewhere? Network with peers at other companies and find out what they're making. Keeping salary information secret primarily benefits the owners because some of them can get away with underpaying their staff who don't know their worth.
posted by Candleman at 8:07 AM on July 28, 2018 [3 favorites]

As Candleman said, 5K for your overdue raise plus 5K for the mere cost of inflation is not unreasonable, especially if you practice explaining it that way.

"Well, I have two different concerns to talk about...."
posted by rokusan at 8:33 AM on July 28, 2018 [1 favorite]

The thing about regular raises is they compound, like interest.
In 2014, you got an @ 6.6% raise
In 2018, you are asking for an @ 12.6% raise.
If you had gotten 4% raises each year, which barely keeps up with increases in inflation, you'd be at 85K anyway in 2018.

To ask for a raise, show the company that you have value to them. Successful projects, deadlines met. When I have worked for bigger companies, they do salary/ market analysis, so go to glassdoor and industry sites and get an idea of what other employers are offering. I wouldn't necessarily apply at other companies, but maybe call a couple recruiters, you may be surprised at what's out there.

If you are female, you may be tentative about asking, so the research is partly to make you totally confident of your worth and value to your company. Last time I helped a friend think through a salary negotiation, I talked them into asking for a lot more than they started thinking about. They got it. You deserve it.
posted by theora55 at 8:47 AM on July 28, 2018 [2 favorites]

I agree with interviewing elsewhere- and definitely consider taking another job, as it would be the best way to get a significant bump in pay. Find something else you'd really like, get the offer, get a counter-offer from your company if there are reasons you want to stay, and leave if it makes sense.
posted by pinochiette at 9:25 AM on July 28, 2018

10G is 12.5%, or about 4% / year, pretty reasonable.

To be fair it might also be reasonable for them not to agree to that, if there is still a de facto freeze, they are still struggling, or you are in an industry that isn't doing well. But I don't think it's an unreasonable ask on your part.

If I were going in I would ask for it as a salary adjustment since they haven't given you a raise. I would frame it as 4% a year, a bit over inflation*, so it's clear your asking for rectifying a multi-year problem and not just waking up and deciding you want more.

If they said something like "No, we can give you a $5000 increase though" my response & tone would be sincere "Thank you, great, I accept, I assume we will talk about the rest of the increase next year?" The key reason I'd do that is not to get a commitment but so I *can* ask next year without them thinking I'm reneging on some deal we made to put the pay freeze era behind us.

* -> The wording on the inflation thing is tricky because you don't want to debate macroeconomics or CPI estimates, but I think it's worth bringing in. This is actually about twice inflation, but inflation is low so twice is also only "a bit." If you're in a high cost area with housing rises it could be more easily described as "not even sure it covers cost of living around here."
posted by mark k at 10:13 AM on July 28, 2018 [2 favorites]

Response by poster: Thank you for all the excellent points. There are some great suggestions! Much appreciated.
posted by silvergirlwon at 1:32 PM on July 28, 2018

Based on previous recommendations here on AskMe, I read the book Ask For It: How Women Can Use the Power of Negotiation to Get What They Really Want and found it helpful for negotiating. For more advice/tactics that you could apply to your situation and other situations that require negotiating (especially if you're a woman), it's a good place to start. If you're already familiar with BATNA (Best Alternative To a Negotiated Agreement), it does cover that but the other info may still be useful, particularly the various examples given.
posted by rangefinder 1.4 at 2:07 PM on July 28, 2018 [3 favorites]

I've been a manager and based on my experiences I would leave the cost-of-living-in-your-city point out of it. It's fine to mention inflation. It's better to mention the great work you've done and your contributions to the team. I don't know how it is at your company, but where I work, managers have a pool of money they can distribute to their team members as they feel is fair. I had a report once whose argument for more $ was that his rent was going up. I wasn't really able to use that as a reason to give him more money because his rental situation is a personal thing unrelated to his job performance. If he had been performing really well, that would've been a reason I could've used to allocate more to him. Just my experience.

(Plus, if you and your teammates all work in the same city, then *everyone's* cost of living is the same and this is even less of a reason for them to give you in particular more $.)
posted by sunflower16 at 7:02 PM on July 28, 2018

« Older Advice for baby's first loooong road trip   |   How can I know the copper IUD is safe? Newer »
This thread is closed to new comments.