These days there’s a lot of talk about company values, employee engagement, retention — but, conveniently, no one in HR wants to talk about salary. It’s actually quite funny how companies will spare no expense trying to fix things that aren’t real, instead of just giving their employees a pay bump.
Since HR and management like to complicate the whole process with noncommittal phrases and smokescreens, it’s up to you to figure out when is the best time to ask your boss for a fatter paycheck. Unless you own a business or work for a very, very cool company, you shouldn’t rely on your manager or boss to just offer you a pay rise. In this article, we’ll share with you the best moments to ask for a raise so that you can properly time your request and hopefully catch everyone in the right mood.
Do you deserve a raise?
Before we dive into the different scenarios, it’s important to figure out if you actually deserve a raise. Of course, everyone would like to be paid more, but is that a good enough reason for a pay bump? No. As much as I don’t like taking the side of the company, not every employee deserves a pay rise year-on-year. This is especially true for low-skill jobs where people are easily replaced.
This information will be more relevant to white-collar workers with a specialised skill set, who have the ability to progress through multiple salary bands and jump from title to title as they gain more experience. Before you figure when to ask for a raise, you should read about how to ask for a raise.
When to ask your manager for a raise
Negotiation is all about leverage. If you have no leverage, well, then you’re just asking for a favour – and that’s not really how business works. Business is exchange — it’s trading one thing for another. You are offering the company more value, and they are offering you more cash.
But just being a good employee who does their job doesn’t give you leverage. So let’s discuss the scenarios that will give you leverage to ask your manager or boss for a pay rise.
1. Performance review
Generally, your manager will hold performance reviews once or twice a year. This is a meeting where they discuss your work and if they are happy with everything. In most cases, your manager will say, “keep up the good work,” and that will be that. If you think you’ve done an exceptional job (i.e. better than your peers), and you can prove it, this is your opportunity to float the idea.
Your manager will probably be expecting the question, and will be armed with some type of made up excuse like, “we are not doing pay increases until X date” or “we’ve got limited budget for pay increases this year.” Sometimes this is true, and sometimes it’s just HR gobbledegook — you’ll never really know, so you have to push and push until you get a direct answer and a solid reason. The thing is, if you are a valuable employee, the company will make exceptions to accommodate you. If you’re not, then don’t push too hard.
Tip: It’s best to plant the idea of a raise well before the performance review for two reasons. Firstly, you want to broker a deal with your manager and secondly, everyone is going to ask for a raise at the same time. So get in early and float your name to the top of that list. There’s always a limited budget, not everyone gets a piece of the pie.
2. Excelled in your role
Ideally, you would have already had initial conversations around KPIs and target goals. If not, get on this. You can spell this out in advance so that you know what you’re working towards and also what’s going to be a great outcome for the company or team. This is negotiating 101. You always find out what something costs or the expected rewards before entering a deal. That way everything is clear and when the time comes to collect the reward (or pay) no one is surprised or disappointed.
Unfortunately, for most of us, we do a job without outlining the bonuses and when the job is complete, we get offered less than expected. This can be avoided by managing expectations from the beginning. Okay, so now you’ve hit a goal or exceeded expectations, this is a great time to reopen that past conversation and talk about a raise. If you’ve hit those goals earlier than expected or the outcome were greater for the company, that’s going to put you in an excellent position to ask for a raise. And the great thing about this tactic is that you’re not asking at the same time as everyone else.
3. Job offer
If you’ve got another company competing for your employment, you’ve got negotiating leverage plus a safety net. This is the ideal position to be in and can, if played correctly, spark a pay rise whatever the month. Basically, you take the offer to your manager and say, “this company is going to pay me X, would you be willing to give me a better offer?” If you are a good employee and there’s a market shortage for your skill set, the chances of getting the pay rise are high. You also kind of get bumped up twice if your current company offers an even higher salary, so you could be looking at a $10k increase.
How hard should you negotiate? The answer to this depends on how much you like your current company and how integral you are to your team. If you’ve got a lot of company knowledge, and you like your current company, then don’t back your manager into a corner. The goal is for them to match the offer. On the other hand, if you don’t really care about burning bridges and just want to maximise your value, then you can start playing each company against each other. This requires some tact, but if you pull it off, you’ll be left with a sizable increase.
4. Legacy knowledge
Legacy knowledge can be having specialised knowledge in company systems that no one else in your team has. It could also be a person who designed a product or system and simply knows it better than anyone else — they are the go-to person for all things related to X. This person is in a unique situation. They have a lot of leverage over the company, simply because they are irreplaceable (or hard to replace). A company will through whatever they have to their way to keep them happy.
Acquiring legacy knowledge is really something you should always be working towards in your career. As with many specialisations, the more niche a skill set, the fewer people for the job. Even if a company wanted to replace you, they would have to spend months and months searching for a suitable candidate. Having legacy knowledge is the ultimate job security. This is also true, on a smaller scale, for employees that are seen as a jack of all trades. They can kind of handle any task you through at them, and are therefore highly useful. The question is, “is your usefulness easily replaceable? And would it cost the company more to hire someone new than simply give you a raise?”
5. Title change or added responsibilities
Title change and responsibilities are two different points, but since they are so interconnected, it makes more sense to talk about them together. Let’s start with the title change. This might sound shocking, but a title change does not mean you’ll get a pay rise. A company might through you a title change without a raise for two reasons, 1) they don’t have any money, 2) you’re vain and are easily swept away by made up positions. In both case, they save money. That being said, getting a title change without a pay increase isn’t necessarily bad for you. They give you a manager title, now you can apply for manager positions, which in the future will lead to a higher paying job.
If the title change doesn’t come with additional responsibilities then, who cares, right? In the case you’re given more responsibilities, you should always push for a pay increase. You have a legitimate case and management understands you deserve more money for the extra work. Whether they pay you or not, that’s going to come down to your negotiation skills. A lot of the time, management will make it seem like these extra responsibilities are a reward for your hard work. But recognise this is just a sneaky tactic to stroke your vanity. If you get added responsibilities with the notion that you’ll get a raise at review time, MAKE SURE IT’S IN WRITING! Make sure they put the amount and date on a signed piece of paper. The word of a manager means nothing because they are not the final decision maker. The real decision makers are the execs, HR, and accounting.
Being underpaid is the most common reason for wanting a raise, but, unfortunately, presents the weakest case for actually getting the raise. If you are underpaid, it’s likely you’re in an entry-level position or working at a company that sucks. The problem is that you already committed to the salary when you accepted the job. Which means you’re desperate. So, given your situation, you don’t have much leverage at all. The only tactic would be if you worked with a company for a couple of years, then you could make the case that you deserve a raise because your skills have increased, and you understand the industry and job better than anyone else. In this case, even if you have a low-skill position, it’s easier to pay you a little more than hire someone new. Anyhow, you should always double-check your expectations here.
Timing your request is everything. There are good moments and bad moments, and we want to make sure that you are not the bearer of bad news, but a persuasive individual with an enticing offer. Try to implement these strategies as soon as you can, so that when the time comes, you already know how the conversation is going to play out. You won't overplay your hand or misjudge your value.
We highly recommend that preparing for salary negations, you read our article Asking for a Raise in 2023. It will help figure out how to have the conversation, which is just as important as timing the conversation. You’ll learn how to build a persuasive case and, more importantly, what number to ask for. Good luck out there ✌️