Asking your boss for more money can feel quite strange. Financial expert Eric Rosenberg and curious writer Sydney dig into this taboo topic and cover everything from how to prepare to ask your boss for a raise, to how much you should ask for, and why a raise should come with every job change. There’s a lot of ground to cover, so we split this conversation into two episodes. Don’t forget to subscribe to the Good Cents Podcast by Payactiv wherever you get your podcasts to stay in the loop!

Eric Rosenberg:

Hi, I’m your host, Eric Rosenberg. I’m a personal finance expert and consultant. I love all things finance and I have my own blog and podcast at personalprofitability.com. For a quick heads up, I am not a registered financial advisor, and this podcast is for information purposes only.

Eric Rosenberg:

Hi everyone. Welcome to the Good Cents podcast by Payactiv. We’re so excited to have you listening along today. I’m thrilled to be joined by our good friend, Sydney, as we talk all about things that you would need to know to get a raise or a promotion at work. And what you might want to think about if you’re looking for a new job and want to get a pay bump along the way. Before we start chatting with Sydney, make sure you open up Spotify and hit subscribe.

Eric Rosenberg:

I’m thrilled that the Good Cents by Payactiv podcast is listed in there. Just search for Payactiv, P-A-Y-A-C-T-I-V, and you should be able to find the podcast in just a moment. Also, if you could tell a friend that you like the show, that would be a huge help for all of us. Well, enough about subscribing on Spotify. Let’s dive into our fun chat with Sydney. All right, guys, we’re back with my pal, Sydney. So, we were just talking about getting a raise and Sydney was saying that it doesn’t always feel comfortable asking, or she doesn’t really know the steps. So, Sydney, what do you feel about getting a raise? What do you think about raises?

Sydney:

It feels honestly, so yucky to ask for money. My gut instinct when thinking about how to get a raise, it’s yucky, is the best way to describe it.

Eric Rosenberg:

All right. Well, I bet you there’s a lot of people out there who agree. Yucky or intimidating or scary, there’s a lot of words people might throw out that I think are pretty common. That little feeling in your stomach when something’s wrong, when you’re really nervous, like the idea of walking up to a boss and saying, “Hey, give me more money for coming in every day.” It’s hard, right?

Sydney:

Yeah. Do you think you come into this job, you do it well, why would they give you more? And maybe that’s a bigger question, why do you think you don’t deserve more? Let’s unpack it.

Eric Rosenberg:

Yeah. Well, I actually think there’s some really good tactics that I’ve learned along the years that you can use that definitely work to get a raise. And I have been lucky in my career to have gotten a bunch of raises. One time, I got a big promotion that got me a 20, 25% raise at the same company. That was early in my career. And once I got a huge raise, even bigger percentage when I changed companies and that was a scary move, but it ended up paying off well. And I’ve talked to a lot of career experts and I even did some interviews with some people about what they look for when they’re hiring and considering raises. So, let’s dive into those questions you have, because I bet a lot of other people have those same questions.

Sydney:

Well, yeah. I guess I’d like to backtrack a little bit. You just said that you have gotten a bunch of raises and right there that’s like, “Whoa, really?” Because I have maybe gotten one before within the job I was working, I was then promoted. But then as you were talking, you also said that you got promoted by changing jobs. So, in your mind, when you think about raises, is that all included in one job or does that include jumping horizontally to a different job? Tell me more about some of the raises you’ve gotten in your life.

Eric Rosenberg:

Sure. Yeah. So, in my mind, a raise is a raise if you get that at your same employer. I think that’s what we traditionally think of as a raise. But for your career, it doesn’t matter if it’s at your current employer or a new employer. And there are actually some statistics out there that say it’s healthy for your career to change jobs around every two to five-ish years. And if you stay with a job longer than that, you could actually be holding back your income. So, while our grandparents used to have a mark of pride that they worked at the same company for their entire career, they also used to get pensions and other benefits that we don’t get anymore, unless you work for the government, but most people will not get a pension these days.

Eric Rosenberg:

I had one in my very first job for about four months and then they just ended the pension program. So, I just caught the tail end. It was a telecom company. So, pensions are not that common anymore, so it’s up to you to save for your retirement. We’ll probably do a lot of talking about retirement over the episodes. It’s up to you to handle a lot of your financial health for the long term. But if you get a raise, you will likely get that raise for every job going forward. For better or worse, a lot of employers will look at what you made at your old job and base your future salaries on that. And a little tip, you should do whatever you can in the interview process to avoid answering if they ask what you made in your last job. Instead, you should focus on the value you provide and what they typically pay for that position.

Eric Rosenberg:

And now we’re not talking about raises, we’re talking more about changing jobs. But you can go and there’s great websites out there like Glassdoor and I think salary.com. There’s a few of them where you can get information on what employers pay for different positions and you get that because past employees went in there and they put in their salaries. And it’s all anonymous, so they’ll ask you to put in a salary from an old job to get access to all the data. But that means when you’re looking for your next job, you know exactly what people are getting paid, but also for your current job, if you work for a little company, it doesn’t work as well. But if you work for a big company with a lot of employees, you can look and see what other people who have your same title or same job level, what they get paid.

Eric Rosenberg:

Now, we’re going to get into the raise at your current employer part. So, if you look at that data and you see you’re getting underpaid, or you’re at the very bottom, you might be thinking to yourself, “Ha, well, I work just as hard as everyone else.” Unless you’re one of those people who ends up on probation and gets in trouble a lot, if you’re that kind of person, you might not do so well getting a raise. But if you show up and do a good job every day and your boss is happy with your work and you generally have positive reviews, there’s no reason you should be on the bottom of that scale.

Sydney:

And I guess what you’re saying too, because we’re talking a lot about or we’re saying, “Here’s how to get a raise.” But also think about changing jobs completely. What we’re saying, I think, boiled down is that no matter where you are in your career, what job you have, what you’re being paid, you always want to be thinking about your job in terms of your career and not just this job, isolated in a vacuum, because your whole career, it’s your life, it’s your livelihood. And when you think about your current job in terms of your whole career, then it’s much easier to say, “Well, look, I’m being underpaid compared to the rest of the market.” And to be open to the idea of maybe changing jobs or asking for that raise, so that you are being paid what you’re truly worth and not letting someone take advantage of you.

Eric Rosenberg:

Yeah, being fairly compensated is what people should be after. I mean, of course everyone wants to get paid millions of dollars, but that’s probably not very likely for most of us. But we should all work to be fairly compensated. That’s the important part. So, if you’re not being fairly paid for the work you do every day, your biggest options are talk to your employer, figure out a way to get paid more or find another place that will pay you what you think you are worth. Another little career tip. It’s probably better to find the new job before you quit the old one because you don’t want to be stuck without income for a while.

Sydney:

Absolutely. So, let’s put ourselves in the shoes of someone who, say, really likes their job right now and wants to stay, wants to work with the same people, maybe is ready for a little bit more responsibility. What would you say are the first steps of broaching that subject with their manager or their manager’s manager? What does that look like for you in your mind?

Eric Rosenberg:

Yeah, that’s a great place to start. So, when you are working every day, you should always be thinking about that next step. And yes, there’s always going to be days where you’re just trying to get through the day. But like we said, you’re thinking about your job now in terms of your career. You’re thinking about every day at work in terms of what trajectory am I on? And a lot of days will just be average days, but some days you will finish a big project or you will do something where you are recognized for a big contribution or you’ll have an outstanding day. Sometimes you have big wins or big victories. And every time that happens, you should write it down somewhere. In my old days where I used to have a cubicle at work, I would have a file on my laptop there that was a word document.

Eric Rosenberg:

I called it my big wins file. And anytime I finished a big project or figured out a way to make the company a bunch of money or save the company a bunch of money, anytime I was able to prove my value and show how I was contributing and helping, I’d write it down. And that way, when it came time for my reviews, which were your quarterly, semi-annual, annual, those are already going to be scheduled at most employers, you have that big win sheet and you can come sit down and tell your employer, “Hey, look, these are all the things that I’ve done to help the business.” So, you’re not saying, “I feel like I should get paid more.” You’re saying, “These are the reasons that I should get paid more. This is the money I’ve made this company.” Because at the end of the day, it all comes down to value.

Eric Rosenberg:

And that’s the same thing when you’re in your interview. You’re not talking about why you’re going to be their best friend. You’re talking about why you’re going to help the company, why you’re going to do a good job in that role. So, it’s all about value. So, make a list, think about all the value you contribute. Also, look at those things that you do regularly that really help and make a difference to the company. If you’re a key employee or a key player on a team, where if you were gone, it would be a huge problem. Make sure your employer knows that, put that on your big win list too. Like, “I’m the only person who can do this, this and this.” Make sure that your boss knows that.

Eric Rosenberg:

Again, when you come back to those reviews, you have that list ready to go. And that is really the best time I think, to ask for a raise because you’re already in a situation where it’s natural to talk about your career. It’s less awkward than just walking up to your boss on a random Tuesday afternoon being like, “Hey boss, I think you should pay me more money.” Yeah, I mean that’s-

Sydney:

Walk away.

Eric Rosenberg:

Yeah. They’ll say, “Yeah, I think I should get paid more money too. We all want to get paid more money.” But if you prepare, like we were talking about, have that big win list, be ready to show the value you bring, and you have the right timing, which reviews are great. But if you don’t have reviews or it’s a really long time until your next review, and it’s kind of the end of spring right now, so if your annual review isn’t going to be for another nine months or something, you don’t necessarily have to wait. But also I would schedule something with your boss. Don’t just spring it on them. Don’t just surprise them in the hallway. If you’re in the men’s room and they’re at the stall next to you, don’t be like, “Hey boss, I want to raise.”

Eric Rosenberg:

No, no surprises, nothing awkward. And we want to make it professional and formal and something serious. It’s not an informal discussion. It’s something that you want to be truly prepared. And if the idea of having that discussion makes you really nervous and kind of shaky and get that roller coaster in your stomach feeling, practice with your dog or your cat or your best friend or your mom. I know that sounds funny, but it’s just like when you were practicing for a presentation in school, you had to stand there at home and you’d go over it a few times with your parents and get ready. Hopefully you did something like that when you were a kid.

Eric Rosenberg:

You can do the same thing right now with whoever is in your life. Maybe it’s a coworker you really like or trust and someone on your team, and you think they’re a supporter and they’re on the same team as you, and they want to see you succeed and grow in your career. Maybe they’re someone you could take them out for a happy hour after work and go over your pitch to the boss. And say this is why I’m worth more. So prepare and get ready, so when it comes time to that conversation, you’re comfortable.

Sydney:

What is professional speak, just a little side note, for “I would like a race”?

Eric Rosenberg:

I would just say those exact words. I would be very direct and forward. And I would say, “Here is my current compensation. I’ve looked at the typical compensation for this job. Here’s my big wins list. Here are a list of things that I do to contribute. And based on this information, I think I am worth either an amount you want to propose or I think I’m worth more.” I’d probably be more specific. Personally, I’d say, “This is kind of what I’m targeting.” Although, the downside of that is you could be limiting yourself also. They might be willing to give you a $2,000 raise and you might say, “I want a $1,000 raise.” And they’re like, “Oh, sure. I’ll give you a thousand dollars raise,” thinking that you would’ve wanted more. So, don’t limit yourself necessarily by saying a specific number that’s too low. The whole point of a raise is to get more, so don’t limit your raise, get as much as you can. So, try to be open and let that boss do some of the talking.

Sydney:

Can we inflate the number by a lot, so that if they cannot even come near it, then you can see what their true colors are? Is that a good idea?

Eric Rosenberg:

It sounds good in theory, but I’d probably not do that because they could look at you and say, “Well, that’s not serious. Yeah. This is this isn’t going to work.” And it might backfire and end up-

Sydney:

Not too much, but if I’m looking at, maybe I ask for $5,000, when they really could do 2, won’t they have to disclose that?

Eric Rosenberg:

Oh, they don’t have to disclose anything. They could say whatever they want. And they can say yes. And the worst thing that happens most of the time if someone asks for a raise is they say no. In most cases, it’s not, “I need this raise or I’m quitting or getting fired.” It’s usually amicable. Hopefully you’re asking for a raise because you want to stay there and you don’t want to leave. When you go into the conversation, if you shoot way too high, that’s not realistic, it’s not going to look good for you.

Sydney:

If you go way too low.

Eric Rosenberg:

That’s why I was saying, be prepared, go look at the data, go see what other people comparable to you get paid. And if you’re at a smaller company, you’ll look at other small companies in your area to try to see what people with a similar position or role are getting paid. That’s a really good way to see if you’re underpaid. I mean, if you’re already near the top of the pay scale, you’re going to maybe have trouble getting a raise, if you’re already near the top of what that employer can afford. Then smaller employers generally have a smaller payroll budget. Bigger employers generally have a bigger payroll budget.

Eric Rosenberg:

So, those are some of the times when you might think, “Oh, do I need to move and find a new home for my work days that has more upward potential.” But if you really like where you’re working and you want to stay there in the long haul, then remember keep it very amicable, try to be realistic with your numbers. It’s okay to aim a little high. I encourage that. As I said, don’t restrict yourself, but you don’t want to go so high that they’d laugh it off and think you’re not serious or think less of you for proposing that number. So, you want to be in a reasonable range.

Sydney:

What would happen? So, let’s say this imaginary person, they’ve gone to their boss, they said, “Here’s my realistic number that I would like. Here’s why I deserve it. Here’s how I provide value to the company.” From there, let’s say their boss says, “Awesome, great, fabulous. Here you go.” So, we can say that happens, but let’s say that [inaudible 00:16:46].

Eric Rosenberg:

High five. Congrats, you just got raise.

Sydney:

You just did it. But I feel like what happens more often is the boss says, “I don’t have that kind of power. I understand where you’re coming from. And if I could, I would do it for you, but my hands are tied.” So, at that point, what would the next steps be to try to get that raise either within the company or moving on to a different company?

Eric Rosenberg:

Well, Sydney, that is a really good question. And I have some good news and I have some bad news. The good news is I have an answer. The bad news is we’re all out of time for today. Wah-wah. I know that’s a huge bummer. But we will finish this topic. We’re going to answer that question and a handful more in the second half of this episode, and that’s going to be coming up on June 14th. We’re going to have some more tips and tricks for helping you get the raise you deserve in part two. So you don’t miss it, make sure to hit subscribe wherever you’re listening, probably Spotify, Apple Podcasts, whatever podcast app you enjoy. We’re working on making sure we are in all of them. If we’re not available, send us an email. You can go to payactiv.com, let us know where you want to find it.

Eric Rosenberg:

And we will make sure we get there. Also, make sure to tell a friend, that’s the best way to help this show grow. And if you have not already, head to the Payactiv app, you can download it in the Apple App Store or the Android store for your favorite device. It’s a free app that helps you manage your money and save money and do all these great money things, so definitely you’ll want to go check that out. All right, that’s it for today. We’ll talk to you in part two on June 14th. Again, make sure to subscribe, so you don’t miss out. Thank you. And thank you Sidney for hanging out today. We’ll talk to you next time. Bye-bye.