Throughout our financial wellbeing series over the last few weeks, we’ve tried to prioritize information that’s actually useful and practical. Cue: a conversation around negotiating salaries, promotions, and rates. There’s tons of information about budgeting tools, saving money, and making investments. The truth is, however, you can’t do any of that if you aren’t being paid what you’re worth. Knowing how to ask for a raise when you are underpaid is a key component of financial wellness and money management.
Instead of simply telling you how to budget, we’d like to give you some actionable strategies for those difficult work conversations and when it’s appropriate to, say, ask for a salary increase or promotion. It’s one way to ensure workplace equity for yourself, especially if you’re part of a marginalized group that’s historically underpaid. Thegender pay gap affects marginalized groups to varying degrees, but you can take action and take control of your financial wellbeing!
When is the right time to ask for a raise?
This is a big question many employees have when it comes to salary negotiation. Am I asking for a pay raise too soon? Too late? What should I say? First of all, let’s talk about when to ask for a raise.
If you’ve applied for a job in the last couple of years, you’ll be familiar with Indeed.com. Their career advice FAQ says new hires should wait at least six months to ask for a raise after joining a company.
“Most employers are more likely to give you a raise if you have been with the company for at least a year or more. If you have been with the company for multiple years, then you can ask once a year,” Indeed says.
The once-a-year strategy is common advice and can help if your company doesn’t offer annual reviews or hasn’t had a conversation about performance and salary negotiation in quite some time. If you don’t have a review coming up, stick to the one-year rule as often as possible. If you do have an annual performance review, or even a semi-annual review coming up, your employer will hopefully give you feedback that helps you develop in your role and give you an idea of how you’re doing. If you’ve added lots of value to a company, increased productivity or revenue, or simply exceeded expectations, you’re on a strong footing to ask for a raise.
Most employers or managers will mention salary and salary increase at the end of a performance review, but if not, this is the time to ask! Prepare for your review ahead of time and consider keeping a journal of your wins, accomplishments, and obstacles you’ve overcome. This will make it much easier to point to specific times, projects, or places you’ve created value and proven yourself as an employee.
Indeed echoes this, saying, “Try to quantify your achievements if possible. For example, show how much you increased customer satisfaction with a percentage.”
To make your chances of getting a yes more likely, Indeed also recommends:
- Waiting for the right time
- Applying for a promotion
- Making a compelling case
- Showing your value before asking
- Using a positive tone
How to ask for a raise when you are underpaid
According to Clever Girl Finance, not asking for a pay raise can result in hundreds of thousands of lost salary dollars in your lifetime. Not good! According to their website, using your boss’ method of communication and setting clear calls to action help get the raise you deserve; they also recommend and echo Indeed’s advice about preparing for the conversation by being able to quantify or qualify your ask with examples.
“Don’t get trapped in the belief that you have to be more stuffy and formal in your approach because the subject is money. How do you and your boss normally interact?” Clever Girl Finance says, “Go with that.”
It’s easy to get flustered or feel nervous about these conversations, especially if you’re looking at a new job offer, but don’t let it throw you off. Remember that your boss, manager, or employee has heard this request many times; you’re not bringing up anything wild they haven’t heard before, and you aren’t the only one asking for a raise. Being straightforward is helpful in this situation!
“Present your case and why you deserve a raise,” Clever Girl Finance says. “Know your professional worth and capitalize on it. Talk about your accomplishments so far, what you’ve created or improved upon, and the success that your work has driven.”
If you really struggle with conversation and your boss likes email communication, you can also present your case in a message, and ask to talk in person later. No matter what method you choose, though, having a clear call to action, like, “I would like to request a $5,000 per year raise,” ensures there’s no confusion or lack of clarity—and your employer will have to give you an answer. They may try to negotiate that number with you, and that’s okay, but not being clear and direct about what you want means you’re very unlikely to get it.
How much of a raise should I ask for?
This question is going to boil down to a bit of research. Business Insider says a general rule of thumb is to ask for 10%–20% more than what you currently earn, which means someone making $50,000 a year now could easily ask for $55,000 to $60,000 per year.
However, it’s possible you’re being underpaid in your industry if you’re in a marginalized group, and you may wish to do some research on sites like Glassdoor, Indeed, or by casually asking social media connections in similar roles what they make per year. Yeah, it’s a little intimidating, but if you know someone making $40,000 more per year than you are (and it does happen!) it’s worth asking why. If they have similar responsibilities, education, and experience, you may be underpaid! If so, bring your research (with specific data points) into the conversation about a raise with your boss.
How do I get a promotion?
One of the simplest ways to get a promotion or pay increase is by applying for one! Many times, employers will be hiring new directors, managers, or for general positions that sit above your pay grade and current responsibilities. If you feel like making a change and taking on more responsibility, upward mobility is your best chance — and employers often like to hire for these positions internally (meaning, somebody already on the team) because they already know and trust you.
When applying for a promotion, it helps to prepare in essentially the same way you would for a raise. Write down your accomplishments, goals, obstacles you’ve overcome, and thoughts on how you’ve added value and benefit to the company. Use percentages, like increases in customer satisfaction or decreases in wasteful spending, to drive your points home. You might also ask for a letter of recommendation from a colleague or other manager who knows your work, especially if you’re applying for a position in another department where the hiring manager doesn’t know you very well.
Whether you choose to ask for a raise or promotion, we hope you don’t sell yourself short — you are worth it! Salary negotiation can be stressful, but raises, promotions, and a higher salary create big opportunities that add up to thousands of dollars over time, and improve your financial wellbeing.
Sure, you could listen to advice that just says, “Save more! Invest more!” But you need the tools of empowerment and a compensation level that can help improve your quality of life first. So, get out there and ask for what you’re worth!