In the June 9, 2015 Ask The Headhunter Newsletter, a reader excels at a new job, fixes what was broken, and wants an early raise. Is that possible?
I have been working for a small company for six months. My duties expanded dramatically soon after I was hired. When I got here, I walked into a disaster. It took a lot of hard work, but now I’ve got the department going like clockwork.
I think I’ve demonstrated that I’m worth more than my current compensation. Is it appropriate to renegotiate my salary at this point? What approach should I take? If terms cannot be met, should I look elsewhere? Thanks for the advice!
I like your pragmatic perspective. If you’re worth more today than when you were hired, you should be getting paid more! Some employers will be shocked, but they’re the ones that will lose their best workers to the competition for underpaying them.
Your job quickly turned into much more than you were told when you were hired. That’s actually pretty common — I’ll bet lots of Ask The Headhunter subscribers are in this boat. Management is often clueless about what a job is really all about, or what it’s worth (see Salary surveys: Know when to fold ’em). But a capable new hire quickly realizes how much work must be done — and does it. The added payoff to the employer is significant.
Sometimes, the employer is conniving. It knows there’s much more work than it lets on during interviews, and hopes to gain a much higher ROI on the salary it offered. The new hire gets stiffed, but isn’t likely to quit.
Either way, I think under the circumstances six months is not too early to approach management about a raise, if you can justify your request. (In fact, it may take six months more to actually get the raise, if it is approved!)
If you suspect management isn’t going to respond well, then start a quiet job search before you make your request, not after. This will give you true leverage in the negotiation, if only because you know you have other options.
Use a business plan
Now that I’ve encouraged you, let’s consider who you’re negotiating with. No company wants to feel pulled over a barrel, no matter what you’ve accomplished. So, be responsible and friendly about this. Your presentation for the raise should include a business plan that covers these things:
- What you have accomplished,
- How much you think you have saved — or profited — the company (an estimate is okay),
- The challenges that need to be dealt with next (be specific),
- What your plan is to tackle and meet those challenges and,
- How your next year’s plan will profit the company.
You didn’t think I was going to wave a magic wand and make this easy, did you?
Here’s the key to pulling this off:
Raises are rarely given as rewards for past performance. They’re offered as inducement for even better performance in the future. In Fearless Job Hunting, Book 6, The Interview: Be The Profitable Hire, I suggest that you take this discussion to your boss:
This means walking up to the whiteboard and outlining the steps that you would take to do the job and solve the company’s problems. The numbers don’t have to be exact, but you should be able to defend them intelligently. (pp. 30-32, “What’s your business plan for doing this job?”)
If you think in terms of a business plan that promises profitable performance, you’ll have a potent case. Based on what you’ve already shared, I think you can pull this off if your employer has any integrity and realizes workers like you are hard to come by. (See How to Say It: Mo’ money is the problem!)
Now here’s the beef in this Q&A:
In preparing your little business plan, interview key managers and personnel in the company about your job functions, to establish support for your presentation. This will help you perfect it, and it will also help you test it. (If no one’s very impressed, you may want to reconsider your plan, if not your request.)
If you’ve taken all my advice, and the company doesn’t see its way clear to pay you what you’re worth, you’ll have an alternative already on deck (an active job search), which is better than having to go create one at the last minute.
Have you ever asked for an early raise, when you realized a new job was far more than you were told — and because you blew through the employer’s expectations? Or did you quietly keep doing the job without asking for more money? What should this reader do?
Wait a minute Nick! You are just recycling the mantra that demonstrating how you bring profit to a company isn’t just a strategy for getting the job, it guides your career along the way….it can’t be that simple! How are all those career coach seminars and online tests going to survive?
(Northeast sarcasm alert)
Your Dilbert skit says it all, Figure what is fair and if you come up short, just pull back on the throttle to a fair gait.
@VP Sales: AAaahhh! I’m busted! :-)
I could not disagree more with Dilbert. You have high standards and you need to live up to your own standards regardless of compensation. Don’t ever work down to your co-workers, competitors or your compensation. That is an excuse that the 99% can always use as to why they are underachieving.
I have always believed in working at a level that exceeds my compensation. For a few reasons:
1) Value and equitable compensation are difficult to accurately determine particularly if you don’t know the big picture of how a company is structured and the value they place on different roles/departments/divisions.
2) I believe in taking control of my destiny. Make yourself so valuable that ownership CAN’T AFFORD to lose you. This is how you can control your earnings. If management is too ignorant to appreciate your value or your role is not valued no matter how well you perform, then it is time to move on.
In my 30s I worked for a large defense contractor. My initial responsibility was small, only a few pieces of equipment. Over time I was given responsibility for seven engineers who worked on about two dozen pieces of equipment. At six and eighteen months of performance, I approached my boss for a raise and was turned down both times. At eighteen months my approach was that I clearly was doing a good job at the assignment or I would have been replaced. (There was plenty of precedent for that at this company.)
After two years, I was finally given recognition of my role and a small raise. It was slightly larger than the average raise at the time.
I was very bitter about this, but did not find another job. Although I did continue to perform at a superior level as Chad has suggested.
In retrospect I file this under “Learning Experiences” and would now take the approach Nick has outlined. Staying in a position when you are bitter and discontented doesn’t make sense. It’s always going to impact your performance, even if you’re conscious and alert to the distraction.
In my experience it’s absolutely true that you must approach any salary increase as a business proposition, regardless of which department you work for. At the very least it shows that you are not asking for your own gain, but have given your role in the company some consideration.
Thanks again for a great article, Nick. As always, your advice is pragmatic and helpful.
I think this is a brilliant approach. Definitely planning an out but approaching with solid proof of what you have done, currently doing, and plan to do. It will make you feel more in control of your career.
It’s a terrible feeling to know that you are severely underpaid. My current employer does exactly what you described Nick! They are a small startup. Two bosses run sales and I do all the marketing and customer service.
They want a higher ROI even though they rely on my expertise and ability to wear many hats since they refuse to hire anyone else. I have asked for a raise and they said they were thinking about that but 6 months later, nothing!!
I have and will continue to look for a better job. Your blog posts are helpful, so thank you!
@Chad: I didn’t intend the Dilbert cartoon to be the answer. It’s my attempt to point out the situation employers put themselves in. I think your approach is correct, but it leads to a make or break situation with your employer – which is good. I published this Q&A because I think many people get to that point, but do nothing to assert their interests. I want people to think about it and choose. Larry B’s story says it all: “Staying in a position when you are bitter and discontented doesn’t make sense.”
Glad folks are finding something useful in my advice – thanks for the kind words! Just remember to tune it so it fits your own style and needs.
Chad – the Dilbert cartoon is the extreme. I offer the following, though
“1) Value and equitable compensation are difficult to accurately determine particularly if you don’t know the big picture of how a company is structured and the value they place on different roles/departments/divisions.
2) I believe in taking control of my destiny. ”
You cannot do (2) if you don’t understand (1) in todays’ world.
Good advise. But I think there’s a key piece missing. Which is especially true for new hires as the writer was.
When you seek raises, promotions you need to know how your company plays that game. The “pay administration system” The context for the adjustment you’re looking for.
Right now, I work for a small privately owned company, and the systems is old school, & unstructured and lends itself nicely to the writer’s desire to ask for a kicker, and Nick’s advise. That is, if you think you can make a case for a pay adjustment you ask your boss & he in turn if convinced will take your case to his boss, who in most cases is the President of the company. And there’s no rules on the frequency. You can go to the well 5 times a year if you can back up your pitch. All of Nick’s points fit right in. Self assess, & if you don’t think it will fly, line up your fall-back with some quiet job hunting.
But most of my life I worked for major corporations with tightly regimented pay systems. Regimented means pre-defined job classifications and related pay ranges, scheduled & hardwired wage reviews periods, supported by budgets.
I’ll give you an over-simplified worse case scenario for managers & staff. Which is labor costs were already budgeted, usually at least 3 months before a new fiscal year kicks in. Meaning your raise was pre-ordained up to a year before you received it. There was wiggle room of course. If a manager sees you’re going to blow past his/her projected performance/raise, the plan could be modified..usually by a trade off. If I give you more than planned, someone gets less than planned & the budget remains on target. Managers are expected to stick to the plan/budget. If you could make a case you could appeal to your manager to cut you some slack, but in so doing your manager would be playing the trade off game, but from a larger pool.
I said worse case because companies evolve to this from unstructured scenarios, and if they’ve been high flyers bleeding money, they don’t pay much attention to rigid pay systems..unless parsimonious by nature, or they get into financial trouble.
The above doesn’t mean you can’t make a change. Once you understand the system you work with, You can work the system. But that means you need to understand what your boss has to work with.
When you do you now are positioned to follow Nick’s advice. The 1st thing you need to remember is your boss usually can’t unilaterally award you change in pay..usually they go to their boss and the bigger the company up the ladder. So what you need to do is arm your boss with the ammunition to make it happen.
What Nick called the Business Plan is a form of the ammo. It’s much the same as a performance appraisal. What you’ve done, and what you plan to do.
And what you are trying to make happen is what’s called an “out of policy adjustment” Your boss & bosses above would rather be shot they rock that boat.
What works well and what’s inferred, is in for a penny, in for a pound..is to shoot for a promotion, and per what was described by the writer, promotion to a new job. I mean creating a new job, not on record, tailored by & for you. And if you take that route, go for the enchilada and define it’s growth path higher levels entailing greater scope and responsibility that you can grow into.
Don’t ask your boss/bosses to slog through a bureaucratic obstacle course for a renegotiated base salary and raise. Most likely they won’t do that.
Going for out of policy changes in regimented environments is shooting silver bullets, they are rare and you don’t fire them off lightly. Out of policy brings scrutiny..also to be avoided. and in the environments I’m describing, it’s suggesting you didn’t plan well.
But going for a new role, that by definition improves operations, spots and develops talent, shows initiative, and best of all promises an ROI that pays for itself..that can be presented very positively even by the worse managerial wussie around. That’s worth a silver bullet.
Timing is everything, again knowing the system & budgetary schedule is very helpful. As Nick says, you shouldn’t think of it less than 6 months. It takes that long for people to find their way to the bathroom and hit their comfort zones. And he’s right, assume 6 months to make it happen. If you know when the budgets have to be submitted and back up about 6 months, your proposal will hit just about the right time for an OK. and in so doing it’s not out of policy.
Great advice to create win-win situations for large companies and their employees.
In a previous job, they only gave yearly performance reviews in March for the previous year. You did not receive an increase % until May. People that wanted to give their notice waited until after they received their % increase/and any bonus. It was funny to see how many people would leave the company in droves: some people in my department even took bets on how many people would leave. It wasn’t a great corporate culture across the board.
There was a bonus pool the managers can give out and they chose to give more to the management than the workers who deserved it the most. I even came prepared to my performance review with a business plan on what I accomplished and plan to do in the future and my boss told me he didn’t want to hear it. I later found out from a HR executive how much money was allocated to my department and how much he put in his pocket.
Oh and one more thing…I wanted to mention how much I like the Dilbert cartoon.
I feel it’s equally important to point out that while Dilbert is an excellent example of a highly disillusioned and disenthused engineer, it is actually the trashman in the Dilbert cartoons who invented the time-machine, which clearly has incalculable value. There is a moral there, somewhere.
Every good and talented hire puts on the after-burners to make a good impressions in the first six months. Assuming there are performance bonuses available at this company, the new hire should show some patience and appreciation for the new opportunity. I assume the new gig is better paying than the old one (or is much better than unemployment was).
I realize that the Head Hunter commission is generally based on completing a 6 month probationary period and increasing the odds that a high performer back on the market has its advantages to your bottom line.
It is what is not mentioned in the Question that should be the decision factors for renegotiation. Was the “disaster” what the new hire was brought on to fix? In which case he has met expectation. Is the new hire getting recognized as the change driver and thus his/her value is demonstrated and recognized? Does the new hire like the job, working environment and projected growth of the company? In a small company there is often more long term upside for advancement and compensation as the company grows and become more successful than focusing on the short term salary increases. Did he feel the salary offered was too low when he accepted it? Or, does he/she just feel that every time he/she accomplishes a goal there should be a bump in pay? Should he/she be fired if a target date is missed?
In short, the decision should come down to whether the company is a fit for the new hire, and he/she should wait to see how they plan to recognize his/her contributions to success (bonus, raise, promotion, profit sharing, perks, ata boys, etc). After a performance evaluation, if he/she feels that their contribution is not adequately recognized, salary negotiation is unlikely to bring job satisfaction, so it is time to start contacting a Head Hunter again.
@Gregg: You ask very good questions. I wrote the column based on the limited information the reader submitted – you know what I know.
Most headhunter guarantee periods run 30-90 days, not six months. And any headhunter who places then plucks a person out of a client’s company will not have a business in a year. Some do it, but they quickly destroy their reputations. My advice had nothing to do with placing the person twice.
Brilliant approach indeed, if you are secured with your job, of course. Otherwise, you can just stand up and go with your requirements straightly to the other employer. The point is, the market today is so instable and even tottering that you may end up with no salary at all if you push with the approach too hard. I consider this strategy perfect only for reliable companies and highly secured positions. Apart from monetary value, there’s always a clear understanding of personal value at your position. I mean, if your salary can’t go up because the company just can’t afford it, still you love what you’re doing and this place gives you all moral satisfaction, you don’t have to go to any pawn shop or lender to get over till the next payroll (more on loansmob.com) probably, making your position unstable with trying to get a salary raise just doesn’t worth it!
Up the Organization! had a great answer for the indispensable person who’s underpaid. Townsend’s advice:
Reapply for your old job, with your salary target in the ‘Salary Expected” space. If you’re right, you’ll be far and away the most qualified applicant, and they’ll have little choice but to rehire you at the right wage.”
Of course, if they’re dumb enough to underpay someone in an essential position, they’re dumb enough to not hire them back because it makes them look bad.