As you might know, there are two sides to the equation when wanting to be Financial Independent and Retire Early: Saving = income – expenses
When you want to increase your savings, you can either increase your income or you can decrease your expenses. Before I wrote some articles about increasing your income, using side hustles or investing in stocks, bonds or ETFs. Today we are going to focus on the income side of the equation, by teaching you in four steps how to ask for a raise and getting it!
I understand that it might be difficult for you to ask for a raise. For me, it’s always challenging. You don’t want to walk over to your boss to have ‘the talk’. You don’t want to ask for the raise, but you do want it. I would say, go for it.
I see the meetings I have about my salary as an opportunity to develop skills I don’t have yet. When I’m having a higher paying job, there will be more at stake. So this is just getting better and better at it, without losing much when things don’t go as planned.
What’s the worst that could happen? Your boss could say ‘no’, that’s it. They won’t fire you and they definitely will not think any less of you. Probably they will see a side of you that they haven’t seen before, getting more respect for you because you have the courage to ask for a raise!
Getting a raise can be just as easy as walking into your boss’s office and asking for it feeling inner calm and grounded. When you are thinking: I want that but how do I get it, this article is for you!
4 Steps To Ask For A Raise & Get It!
Step 1: Know Your Worth
Many people don’t know what they are worth, resulting in a much lower than expected salary. Go check on the internet, ask your peers, ask your friends and family.
Think about; what is my position within the company? Did I get extra responsibilities over the past year? If your research shows that your market value is too low, talk to your boss!
When you don’t know what you should compare your salary with, go to Glassdoor. People post their salaries there, which you can compare with your current or desired salary. If this number is significantly different, you can bring this to the table when you are negotiating.
If you are in a position where you are getting regular messages from recruiters, use this as leverage. Ask the recruiter for the specific salary for that function, print it out and show it to your boss. Try to time this right. Show your boss, for example, when you are having the yearly performance appraisal. You can ask the upper bound of the recruiters’ offer and you will get it about 90% of the time!
My rule of thumb: if you are getting an average market salary already, don’t ask for more than a 10% raise. However, I’m currently in a position where I’m hugely undervalued. I will get an extra salary based on my performance, probably 8%. Currently, I follow my own advice, doing my own research and I will ask for a 20% total raise. I will let you know what happens! A 20% raise is unusual but not impossible to achieve since I know what my market value is and what I can earn at other employers with similar job function.
Update: I have received a 21% salary increase and an additional bonus. It worked! Also read my articles on:
Step 2: Know Who You’re Dealing With
Before you go into conversation with your boss, know how he/she negotiates. Does all the input have to come from your side? Is the other person open to your arguments? Is the other holding back, or extremely open to looking at the possibilities? Once you know who you are dealing with, you can anticipate and prepare on what the other person might say.
Think about how they can react to certain questions, how they will counter your argument, and how the personal relationship with that person is.
Step 3: Have Your BATNA Ready (Best Alternative to a Negotiation Agreement)
When you are negotiating and your boss says ‘no’ to your initial €400 salary raise, the negotiation doesn’t stop there! This is just the beginning!
Remember that where one door closes, another one opens.
When your boss only wants to give you €200 salary raise, that’s okay. You have to opportunity now to ask for extra holidays or working from home. People who think about their BATNA, and keep it in mind, more often get what they want.
Step 4: Keep The Conversation Going
The reason many people do not get a raise is that they do not ask for it. If you are getting more responsibilities, have to work more hours or your overall work is improving? This is sufficient to request a meeting with your boss and discuss the possibilities.
Sleep on it
Never agree with the deal right away, unless you are very very happy with the current deal. Summarize what you discussed on email and sleep on it. I
f you are not happy with the current deal, you can let your boss know and schedule a second meeting. It’s better to have another conversation and have a good outcome for both parties, not being happy!
You can not figure it out with your boss? If you work in a big company, ask if it’s possible to talk to someone in a higher position. They often have more decision power to give you what you want!
Keep in mind that negotiation is nothing more than a conversation leading to an agreement, view it as such. Your boss wants the best for you, and he/she will always listen to what you have to say. This negotiation is an opportunity for you to express your desires and expectations about your job and your salary.
I can imagine that negotiating your salary can be a challenge. To help you, please let me know:
Do you have experience with negotiating your salary?