Thoughts on pay rise request

[TheChineseChicken]

I intend to ask my manager about a pay rise request, and I just wondered if anyone has made one for similar reasons (or just has any input in general).

I joined the company nearly 4 years ago and took a pay cut (I was happy with this since it was then a new and small company set up by an old colleague and I knew most of the team - so I was keen to join). Love the job, am very good at it. Very senior manager / leadership team if that helps.

Nearly 4 years later the company is very successful, growing every year, no real covid impact. We’re now the size of my previous company when I left. But I’m still not paid the same as I was in my old job. So I really would like to have an increase to at least the same, ideally more since I would have had pay rises had I stayed.

My main argument therefore is that I’m not paid market rate. No issues with performance. No promotions but I am top of the tree so nowhere to go. Get on very well with my manager (the MD).

Anyone had a similar experience and how did it go?

I haven’t, but Harriet Minter has done some good articles on asking for a payrise

@partyatthepalace

I haven’t, but Harriet Minter has done some good articles on asking for a payrise

Thanks, I’ll take a look. Sadly I find this kind of thing tricky so want to make sure I’m well prepared

I think everyone finds it hard. Great you are doing it, and preparation is key.

It’s really hard but you just need to bite the bullet and do it. I had to bring it up a while back and got a decent pay rise as a result - if they think you’re happy on your current salary they’re unlikely to just offer more, you have to ask for it. One thing I’ve noticed is that women find it much more difficult than men - my husband has no qualms about having money related conversations with his work!

Yes, we do find it hard (in general)! One complicating factor is that there are several of us at the same level so would my boss give me a rise unless he was happy to do the same for others? I know he is keen not to have big discrepancies within teams as he wants to treat people fairly

Maybe go in with bench marked information as well as comparison of how much the company has grown and what you have contributed to that.

I understand that your colleagues may also be entitled to a similar raise and if this is brought up you can say, if you think that is the case then maybe a pay review is in order or... that you are here advocating for yourself. ..

Can the business bear the cost of a pay rise across the board? Overall has the extra income resulted in extra investment or are the profits accumulating in reserves?

I know I won’t be the only person in the team in the same situation as quite a few of us came from the same place at a similar level and therefore would have taken pay cuts. So maybe I won’t be the only person having this conversation.

I know that we have a lot in the bank so the company could afford a pay review at this level.

I think this is a fair reason, we started a new business a few years ago - the motivation then was to keep overloads for obvious reasons.
We have not been affected by Covid and we have continued to grow and be successful and although we still wish to keep costs low (who doesn't) - losing good staff is very expensive, finding a good replacement is risky, time consuming and a pain in the butt - we have grown and are now in a place to start raising salaries to exceed market expectations and increasing benefits, to ensure our team always feel they are generously rewarded and are sharing our success.
So I think the timing is good and it is much better to have a conversation now - your reasons are valid, than to go off and get another job to force the conversation - to me if you have to force their hand in this and it means a lot to you - you are better to go and get another job anyway as the trust will have gone.
If they are worried about risk one option to consider...we give our team the option of risk sharing by reducing their salary by "A" (determined by team member) and then tying A to company profits - so far this has resulted in very good gains for them. I realise this wouldn't be for everyone and who knows whether we will continue to offer it to new team members - but we are a very open organisation and the team are encouraged to provide feedback be honest with us about any concerns they have - we want our team to feel they are being paid fairly for the contributions they make - they are not expected to work below market rate just because they enjoy working for us.

Plus.... are the directors reaping the benefits... not as part of your argument but it informs the background for the discussion from your perspective.

@ChateauMargaux

Plus.... are the directors reaping the benefits... not as part of your argument but it informs the background for the discussion from your perspective.

I suspect not really. It’s a group of people I have known for many years and they are an ethical bunch

I mean obviously they will do in the long run as they are invested in the business

Ask your manager if there are any plans to review salaries and benchmark against current market rates. Presumably everyone is in the same boat and they need to get their act together to retain and motivate staff.

Actually that feels like a good way to start the conversation, thank you. They may have plans to do just this I suppose so it feels less confrontational

This affects the senior team more than other levels, since we started when the company was small and we’ve recruited from the bottom more over time - so more new people with no history who wouldn’t have accepted a pay cut

Hate the treat everyone fairly/the same approach. Does you company have pay ranges or market values for their roles? Typically for someone competent and experienced in role you would be receiving market median, strong performers above that. If you can get a hold of that data, I’d use that to help, coincided with your performance reviews/ratings. Try not to talk about specific people, but rather talk about your pay position relative to average by band/role

We haven’t had pay bands to date but have been working towards getting them in place. Unfortunately all focus at the moment has been sorting things out for all other levels in the company in time for EOY reviews so I don’t think our level will be done.

Work in a niche industry so average pay isn’t really available anywhere online to compare with.

Don’t ask for a pay rise on the basis you are paid less than in your previous job. That’s irrelevant and it was your choice to accept a pay cut.

However do ask for a pay rise if you are performing well and are not paid at the market rate. Give evidence of both things.

Thanks for a different perspective @flowery. Wouldn’t I be using my previous role as an indicator of market value?

Market rate

@TheChineseChicken

Thanks for a different perspective *@flowery*. Wouldn’t I be using my previous role as an indicator of market value?

I wouldn’t.

I’m coming from a background working in charities where people would come in from corporate roles magnanimously accepting a pay cut to work in the charity sector, then decide six months down the line that actually they don’t like earning less money and should be given a pay rise based on the fact they used to be paid more...

I realise that’s not you, but you decided to accept a pay cut, meaning you have given away that leverage now.

But that doesn’t detract from a genuine dispassionate assessment of the wider market rate, and I would definitely emphasise that. How much your previous employer (assuming they are comparable) is currently paying for similar roles could be relevant alongside information about other companies.

I see what you’re saying but think the circumstances are a bit different. I didn’t move into a sector where salaries are generally lower, I moved to a start up with limited funds in the same sector. Now it’s no longer a start up and has plenty of money so the same reasons for lower salary no longer apply. I appreciate your perspective though and I’ll definitely think about it a bit more.

And a big part of the reason for its success is the hard work of all the people who took pay cuts

Ask for more than you want so you can a) negotiate downwards and still be satisfied or b) get more than you'd expected.