The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “How do you ask for a raise?” is written by Ed Mitzen, founder of Fingerpaint Marketing.
Asking for a raise is never easy, no matter how far up you are in your career. It requires confidence, a sense of timing and self-worth, as well as empathy for your employer.
You should set up a meeting with your boss; mention that you want to talk about your performance, so you’re not catching them totally off guard. Most people go in with a list of what they’ve accomplished thus far, but what they often don’t realize is that most employers are more interested in what your value will be in the future. Obviously, your past accomplishments are a good indicator of how well you will do in the future, so don’t be shy when it comes to highlighting your exceptional achievements. Your boss, however, will be more apt to give you a raise if you detail what you can do for your company in the year ahead and explain how that’s essential to its growth.
Employers won’t want to give you more money if you simply performed the duties you were hired to do at your current salary. Doing a good job and performing as expected are not reasons for why you should earn more money. Employers want to reward results that demonstrate you went above their expectations.
Many years ago, when my company was starting to really take off, we made the decision to hire an in-house finance and accounting person. Prior to this growth, we couldn’t justify an in-house resource. It was simply more cost-effective to outsource this function. After many interviews, we settled on a local woman with an incredible background even though she was still in her twenties. What happened in the first year she joined us is something that will always stick with me.
This new employee came in and in a very short period of time, completely revolutionized our finance and accounting areas. Without hesitation, she took on our cash flow issues, need for better financial reporting, profitability analyses by client, salary and hiring guidelines, capacity planning, etc. As we grew, she hired a full-team to support this growth and didn’t miss a beat. She was doing the work of a 20-year veteran that ran my previous company’s finance and accounting departments.
We realized in a little less than a year that she was incredibly underpaid, more so than any person I have ever hired in my entrepreneurial career. It was unethical to keep her at her current salary, so we went to her and more than doubled her salary overnight. To say she was floored was an understatement. And it felt so incredibly gratifying to reward this talented individual with a life-changing income adjustment. And it was so well deserved.
If you can show that your accomplishments were exceptional, the ball is in your court. Bear in mind that losing you and having to replace your expertise could cost your company. That’s a huge factor for managers when deciding raises and promotions. Of course, never threaten to leave — nobody likes ultimatums, but do demonstrate how important you are to the future success of the company and the implications of your departure in terms of disruption, both from a work and morale standpoint.
It’s critical that you go into a raise discussion with an open mind. No one will react to a pushy or demanding approach. Understand that most bosses want to reward their key players and will appreciate a more thoughtful, honest, and rational discussion. If for some reason the raise can’t happen right away, your boss will appreciate your respectful approach and no doubt give it serious consideration soon.
You should also choose your timing. I wouldn’t recommend asking for a raise if the company just lost a big account or if you are aware that money is tight. Financial difficulties can be extremely stressful for management, and if they see you as out of touch with business realities, it will hurt your chances for success. On the flip side, if business is booming and you feel you are playing a big part in that growth beyond how you are currently compensated, then go for it! Never be afraid to ask for a raise if you feel in your heart it’s well deserved.
And remember, the best time to ask for a raise is during your annual performance review. It’s a time of year when you and your boss can take a step back and review your accomplishments and areas for improvement. If the discussions about compensation can begin at this time, it will make it more likely to happen in the coming weeks versus trying to hit your boss up for more money out of the blue sometime during the year.