In this special Making Sen$e edition of Ask The Headhunter, Nick shares insider advice and contrarian methods about winning and keeping the right job, on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards or salary negotiations. No guarantees — just a promise to do his best to offer useful advice.
Question: My three-year performance evaluation is coming up. I feel I’m worth more than my current salary. How do I communicate that my job is worth more and ask for more money?
As my company has grown, so have my responsibilities. I’ve really stepped up to the plate. I’ve earned recognition, but it’s not reflected in my pay. Through discussion with peers in the industry, I have learned that the average salary is much higher. Could you please advise me how to approach my boss during the evaluation, so I can convince him my request is justified? What should I say and not say?
Nick Corcodilos: There are entire books written about this topic, and compensation experts will offer negotiating strategies galore. But I’m going to refrain from a long lecture, because I think you can figure this out yourself if you keep some basic ideas in mind.
You can’t just walk into a review meeting, show some salary surveys, and expect your employer to cough up more money “because that’s what other people who do my job are being paid.” You must justify what you’re asking for.
A salary renegotiation is pretty simple conceptually: It’s best done with a business plan. In other words, do an analysis of your role as though your job constitutes an independent business. Don’t talk about your qualities or about what others are being paid. Talk about your company’s business and what you add to the bottom line — and what you will add in the future.
- How do you contribute to revenue?
- What does it cost to have you do what you do? (This includes not only your compensation and benefits, but the cost of your tools, the cost of your team and support personnel who help you, and so on.)
- What’s your history in terms of the profitability you bring to the company? (That’s right: Your contribution to revenue matters, but how you impact profits matters more. Even if you can’t calculate a specific number, you need to outline a defensible case that goes into the profit factors you influence.)
- What are your profit projections for the next two to three years? That is, make some projections of how you will contribute to profit. You’ll need solid evidence to back these estimates up.
A job is a business. That’s the key to thinking about this in terms your management will understand and respect. As in any business plan, your goal is to demonstrate how an added investment will pay off. You must show a rising return on the company’s investment in you.
The longer you’re working for the company, the more profit you should yield. A lot of this is number crunching, of course, and there’s seat-of-the-pants estimating involved.
Please read that last part again: There’s seat-of-the-pants estimating involved.
This will scare a lot of people off for fear their employer will challenge the estimates. That’s exactly what you want! A dialogue. A debate. A roll-up-your-sleeves talk about your job! If your boss is worth working for, then your boss will see that you are worth a good raise because you’re thinking about the company’s bottom line and that you are prepared to discuss future plans intelligently.
It will help enormously for you to interview people in the company who factor into this plan. In the process, you not only build your case; you influence (and remind) other key players about your worth. Then ask them to put in a good word for you with your boss.
Check this article for a caution: “Salary Negotiations: Know When To Stop.”
Dear Readers: Is your raise overdue? What are you going to do about it? How would you advise this reader?
Nick Corcodilos invites Making Sense readers to subscribe to his free weekly Ask The Headhunter© Newsletter. His in-depth “how to” PDF books are available on his website: “How to Work With Headhunters…and how to make headhunters work for you,” “Keep Your Salary Under Wraps,” “How Can I Change Careers?” and “Fearless Job Hunting.”
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