The 2022 U.S. labor shortage shows that good help is hard to find. If you’ve been in your current role for a while, this could be good news: your boss has extra incentive to keep you because replacing you would be too difficult. This gives you the leverage to ask for a raise.
No person is irreplaceable, but you can’t deny that hiring is a long and expensive process. Your boss could spend up to 49 days searching for your replacement, should you decide to leave. And by the time the new hire goes through training and company onboarding, your company could have spent almost four times your salary trying to replace you.
In this situation, it’s less troublesome for your boss to give you a raise versus hiring someone new. Not only does this help them avoid onboarding someone new, they would also maintain the institutional knowledge that comes with your experience at the company.
This positions you nicely for a pay raise, but they won’t increase your current salary unless you make the request. And when you do ask, you’ll have to show why you’re worth the pay bump.
Whether you’re negotiating with human resources or directly with your boss, do your homework. This means learning your market value, demonstrating your track record, and learning to project confidence.
You’ll also have to be patient and brace yourself for rejection. But hopefully, with our tips on asking for a raise, it won’t come to that.
Here’s what you need to know.
When to ask for a raise
Timing is everything when asking for a pay increase. Ask too soon, and you won’t have the track record to prove your worth. Plus, you may leave your boss wondering why you didn’t negotiate a higher salary to begin with.
If you ask too late, you risk not earning a fair wage and hampering your career growth. With the rise of inflation, cost of living, and your increased value in a competitive job market, you don’t want to sit for too long.
Here are some guidelines on how to properly time your raise request:
- It’s been at least six months. Asking for a raise before half a year in a role can backfire. Unless you had a massive win in that time, it’s better to wait until you have a stellar track record.
- Your company had a great quarter. If your company is going through layoffs, they’re not likely to give you a salary raise. Wait until they post strong quarterly earnings — they’ll be in a better position to approve a pay increase.
- Your performance evaluation was exceptional. Asking for a raise after a glowing performance review will increase your odds of succeeding. Your recent accomplishments will be on your boss’ mind, making them more likely to approve your request.
- You had a massive win. Did you just land a big client, secure significant funding, or blow past your quarterly sales target? Bring it to your boss’s attention. This is a great time to earn a raise for your contributions.
- You’re being underpaid. People in your role at other companies might be earning more than you. Or, worse still, someone in your organization may have a higher salary despite doing the same job. If this is the case, it may be time to confront your employer.
- You received a promotion or have more responsibilities. Companies grow. Roles expand. After a year at your company, your job may be different than before. It’s only fair that you’re paid accordingly — especially if you earned a promotion.
Asking at the right moment will ensure you have a leg to stand on. You want to strike when your boss is already thinking about your achievements to remind them of your value to the company and your team.
How much to ask for a raise
When you ask for a raise, you’ll either have to name your desired pay or evaluate your employer’s new offer. In either case, you’ll need a firm understanding of your worth. This will help you pitch an appropriate salary or weigh the fairness of your boss’ proposition.
On average, you can expect up to a 4% salary increase in 2023 for inflation — but this will vary based on a few factors. When conducting your research, you should consider the following:
- Where you live. If you work remotely, you can expect a lower salary than others in your position. But if your job demands you live somewhere with a high cost of living, such as a major metropolitan area, you should be paid accordingly.
- Inflation. As prices increase for consumer goods like groceries, gas, and clothes, your paycheck won’t go as far as it used to. Your pay increase should match or exceed the rate of inflation so you can keep the same purchasing power.
- Your industry and profession. An app developer in Silicon Valley will earn a different salary from a policy analyst in Washington. Your raise should match your colleagues in the same industry and profession as you. In your salary research, you should network with people in your field or use websites like Glassdoor to find the going rate for your skills.
- Demand. If you’re in an industry that attracts fewer workers, your skills are rare and thus more valuable to your employer. It’s easier to justify a pay increase when there isn’t a lineup of people waiting to take your job.
- Personal reasons. You may want to buy a house next year, raise a family, or go on vacation. Increasing your salary helps you accomplish your personal goals.
All of these factors will help you determine what a good raise percentage is. Ideally, your employer would already know your worth, but they may try to underpay without you knowing it. Understanding your market value will empower you to negotiate a fair salary based on facts and figures.
How to ask your boss for a raise
Consider this scenario. Over the past year at your company, your boss had nothing but good things to say. Your sales figures were great, you had a strong work ethic, and you’re a great culture fit.
Now would be a great time to pop the question. Here’s how:
- Set up a meeting. This isn’t something you ask your boss in passing. Make sure they know you want to discuss compensation and schedule a video or in-person meeting to do so. If you have an annual review coming up, consider bringing up your salary during that meeting — but only if they praise you for excellent work.
- List all of your accomplishments from the last year. Demonstrate your impact on the company. Listing your accomplishments will help you build a case for a salary increase.
- Don’t rely on longevity. Spending a year in a role helps your case, but it shouldn’t be the center of your argument — especially if you’ve done nothing notable in that time. Focus on your accomplishments or additional responsibilities instead of the tasks you’re already expected to complete.
- Rehearse your points. Preparing your points ahead of time will help reduce your anxiety heading into the meeting. Write down what you want to say, and feel free to bring your notes with you. This ensures you won’t forget anything crucial.
- Have a specific figure ready. You should have your homework done. Prepare to pitch your preferred salary based on your location, inflation, industry, and demand for your skills. Be firm in your desired number.
- Be open to perks that aren’t money. Money isn’t the only way to reward great work. Your boss may offer unlimited paid time off, extra parental leave, or stocks in the company instead. Decide ahead of time whether these are acceptable forms of additional compensation.
- Prepare to negotiate. If your employer is reluctant, it’s not game over. But you may have to lean on your research to justify your raise. Describe your increased responsibilities and highlight the average salary for people in your position to build your case.
- Consider waiting it out. For budgetary and accounting reasons, companies sometimes follow strict cycles for handing out raises. You may have to wait until the next fiscal year before gaining approval. This gives you more time to show your value to the company.
What happens if your boss refuses?
When you ask for a raise, the worst thing your boss can say is “no.” On one level, this could help ease your nerves heading into the conversation — the worst outcome is no changes in your day-to-day work life. But on another level, a raise denial could leave you feeling undervalued and disappointed.
This leaves you with two possible courses of action:
You could also use your new job offer to negotiate a raise in your current role, but it’s risky. Showing your boss what others are willing to pay proves you’re worth more than you’re getting. But if it doesn’t work, you’ll have to commit to leaving.
And even if they accept, your boss may only increase your pay until they can hire your replacement. If this happens to you, you’ll lose more than a raise — you could lose your job. Evaluate your job’s security based on the nature of your contract (like how easy it is to fire you) and your relationship with your boss (whether they’ll take kindly to you shopping for a new job).
The bottom line
It can be hard to know what to say when asking for a raise, but it doesn’t have to be. The secret to successful salary negotiations is preparation. Research your industry, figure out what your co-workers are earning, and use LinkedIn to network with people in similar roles to yours.
When asking for a raise, tips like these will arm you with information and help you have a productive conversation with your boss.
It’s not the end of the world if they refuse. At best, this leaves you in the same position as you were when you started. At worst, it could be a sign they’re undervaluing you as an employee. In either case, you’re not powerless — this is a chance to prove your resilience.
You can choose to gain more experience in your current role and prove you’re worth the raise. Alternatively, you can choose to leave for a higher salary elsewhere.
You don’t have to jump ship at the first sign of trouble, though. Accepting a new job is no small thing, and you may prefer to stay in your current role for reasons other than money. Whatever you decide, we trust you’ll make the best decision for you.