Need a raise, how to ask?
This is probably a very simple question that a simple Google query can answer, but I'd like to get some opinions on the matter.
About me: - 3 year exp software engineer - 84k/year salary - Ruby on Rails, JS, CoffeeScript, MySQL, HTML/CSS (currently the UI guru..) - Oversee 2 folks on the US side (we also have offshore folks) and we all work under 1 App Architect - Company is based out of Boston - I live and work remotely outside of Boston.
The company has always been fast-paced. I work on everything for the front end. This means: 7 different Rails apps (internal & external), 5 different Rails engines, ~10 in-house built gems, and I also delegate work to 2 folks under me as a tech lead for a new project.
According to Payscale.com (including perks, etc): - Boston rankings: 38th percentile @ 84k/year - Where I live/work remotely: 75th percentile @ 84k/year
I continue to pick up more and more responsibilities, yet the 'cap' for raises is 10%. I'm at a point where I know I can find work that pays more, yet I do not have another offer. I'm currently interviewing with Google though, so maybe that gives me a leg-up?
Anyway, what merits do I have for a raise? Where I live/work vs. where the company is based, my ranking is drastically different. Yet, it'd still be cheaper for the company to give me a hefty raise rather than finding someone with my skill sets in Boston (RoR devs in Boston are super expensive and hard to find, so I feel like I've been taken advantage of).
How can I go about asking for a raise? My plan is to gather different estimates from different websites for both areas and then come up with a solid middle-ground for the pay that I'm looking for. Without another job offer on the table, it's hard to demand anything; however, I know that my company needs me more than I need them (not going into details here).
Just looking for some opinions and thanks in advance for any advice given here :) Get an outside offer from some place you are willing to work at. Either they match it or they don't it's all one to you. Frame it as you having to do what's right for you and that you can't afford to leave that kind of money on the table. Working careers are short and you will never get that money back if pass on it. It's the truth and it's something any half way decent manager can understand. It's not personal it's just a typical business decision for both parties. Expect that they may not match immediately. They will try to get you to wait a year or till the next cycle. The response is that you don't want to wait or leave money on the table due to the time value of money and the risk you are shouldering. Either they concede, sweeten the pot, or pass. If you do end up with future promises get it in writing signed by your manager.
Read it and make sure there are no games. I wouldn't bother with estimates or middle grounds. Where the rubber meets the road is what kind offer you can get somewhere else. You are asking for a pittance from them and for the most part unless it's a failing business they shouldn't care. Agree with the idea to get an offer first, and then try to negotiate. However, I would not put it as bluntly as "give me more money, or I go work there". They may yield this time. Especially if you are an important member of the team with some exclusive knowledge (i.e. you're the only one who knows the codebase for component Foo, and if they lose you they are screwed). But, they will likely be bitter about it. Try to force you to share your knowledge in the next few months and kick you out. Again, I agree that it makes perfect sense to you as an employee to maximize your income, it's just business. But a lot of business owners, especially in startups, may take it personally ("How dare he want to leave us? How about our mission of making the world a better place? He's only in it for the money ????!!!"). So, long story short, I would amend this advice with not disclosing that you have an other offer and not setting an ultimatum. I like this approach, it's the most careful one. Though if you truly know that you are valuable to your company and they are going to pay you what you're worth when you make the ask, no need to even get another offer. If it's such a good market you should have no problem finding another gig. I'm in SoCal doing Ruby, Rails, JavaScript stuff and I was underpaid for the first 1.5 years at a new gig. Since I was confident I could get another gig paying 20-40% more with ease, I didn't bother getting an offer first, when I made the decision, I just went in the next day and took care of business. Told my manager I have an offer on the table for FIFTY PERCENT more than what I was currently earning (no such offer existed), they matched it (including other perks), and then I was paid 1.5x more. Been here for another year since then, no problems. YMMV, make the best decision based on your situation. This risk may not be worth it, but it sounds like you're in good standing with your company and provide them good value. Okay, very interesting... I like the way you think. Luckily, I built various components and the entire CSS layer (which gets very complex) is really only understood by me... which is a nice monopoly from time to time. But yeah, if I leave I know I'll be forced to continue doing the same work but also forced to educate the entire team, etc. on my knowledge. But you're right, I don't want to make anything personal, it's purely a business and career growth decision on my end. I love the company and what they stand for, but I don't like feeling like I'm being taken advantage of by being underpaid for my skill sets. After working here for a while, I've noticed that the interviewees are lacking in skill sets and we can't seem to gain or retain top talent... which also leads me to think I have a leg-up on this as if I leave, they're screwed in certain areas. You might be surprised. Management can be very bad at economics and negotiation resulting in them paying in recruiting and on boarding costs more than what you asked for. This is why it's key to always have an offer some place you are willing to work. Never bring up an offer some place you aren't willing to work. That said you have to respect an employer's investment in hiring and on boarding. Switching jobs every year is a problem for employers. I think 2 years is a minimum and 4 years is what I target. I also hate interviewing. After 4 years all bets are absolutely off and my tolerance for making less than what I could make elsewhere for equivalent work is close to zero. Gotcha that makes sense. Part of me feels like I'm being greedy and part of me actually feels like I'm being taken advantage of in certain ways, so I'm personally struggling with whether or not to ask for a raise anyway... you make very good points here, thanks! Greed is good. You can be greedy you just have to be fair and respect your employer's time and investment. They are not entitled to your labor in perpetuity just because they hired you. You have to give them something or risk burning bridges and not developing a professional network. Feeling like your being taken advantage is something I think you should never express. One HN poster put it very eloquently. At the end of the month when you are paid you and your employe are square. You don't owe them anything and they don't owe you anything. By continuing to work there you are agreeing to trade the next month for what they have promised to pay you and no more. Stay away from talking about the past. You can't collect on perceived past debts. That's also why I don't like to make compensation about performance. It's up to my employer to decide whether the business value I deliver is worth what I cost. If you have an offer in hand this is what you cost. It's not ambiguous or nebulous like performance and that's why managers love to talk about performance. Don't indulge them. Sure I have felt taken advantage of, but it's not really your employer. It's the game. It's crap and we all have to work within it to maximize the value we can realize. Your employer is doing it and so should you. And don't think I haven't lost with that strategy before. I have worked for people who did not recognize the business value I provided. It's not a big deal. It happens. You move on and maybe they are right or maybe you are right. Maybe the next thing is better than what you had or maybe it isn't I agree there is a risk but the rewards are massive over the course of a career. Unless you work for a select few companies with passable compensation practices you will lose millions of dollars once you take into account saving and investing the money you earn earlier in your career. There is an element of knowing who you are talking to. You may even be the one to educate them on the economics of retention and BATNA and so on. I have found that even emotionally invested people can understand the economics of it and the need for their employees to do what is right for them. It's a strange one that thinks that their mission is more important than someone's future. Probably someone you don't want to be working for anyways. Okay great, that makes sense. Thanks for the advice! > I know I can find work that pays more, yet I do not have another offer Read the true story I wrote below [1]. You don't want to look like a mercenary ("give me a raise or I quit"). But you do want to be paid fairly. Get an "informal" offer. Then tell your boss that you really want to stay with them, but the "outside market" is telling you that you are underpaid. That approach has worked for me in real life. [1] https://medium.com/@alain94040/how-to-negotiate-a-raise-9166... Great advice, this is really what I'd like to do... propose that I have an offer that I don't really want, but the money is better - hoping that they can match it, since the offer proves my worth Here's how I do things: If an employee comes and says she or he has a better off I let them take it. If they're looking, they're looking, and I want people who want to work with us. I am not at all unhappy if someone comes and asks for a raise. I believe everyone is paid fairly, but if there's a mistake, well I'm glad to find out and fix it. But I'm happy to explain why the pay people are getting is probably fair. I use hiring info to keep abreast of salaries: if candidates seem to need more than I had planned to offer then I level the appropriate employees up as well. I.e. you don't have to try to get a new job just to get a raise. It means people are paid fairly (e.g. your company's cap on raises is stupid). Apparently publishing everybody's pay adds stress for some reason, but I try to set the pay as if they were published -- so if someone does find out they won't be surprised ("Woah, Jane gets 20% more than me? Crap, I guess she is the one we all go to when we are having trouble finding the right algorithm; I should pick up my game"). Note that there is nothing wrong with looking around at other company's hiring pages, linkedin etc; it's no different from keeping your other skills up to snuff (learning new technologies or whatever). I just don't like being presented with what's essentially an ultimatum -- it means the asker isn't really thinking about the issue. If they're looking, they're looking, and I want people who want to work with us. And what do you think motivates people to work for you? Why not pay them nothing and only take people who are willing to work for nothing? If your SaaS provider raises prices do you pay to move to a new SaaS provider when it is cheaper to just pay the new rate vs paying to move to a new provider? Why do you think your employees should be held to a different standard from any other vendor you do business with? You manage a team to get work done. If someone is too expensive compared to your alternatives then sure let them go. Letting them go when they offer what you want at a price you are willing to pay is just crippling yourself for no reason. Even if you only retain someone for an extra year or two that can be a big chunk of their total tenure and that further reduces hiring and on boarding costs. I use hiring info to keep abreast of salaries: if candidates seem to need more than I had planned to offer then I level the appropriate employees up as well. I.e. you don't have to try to get a new job just to get a raise. It means people are paid fairly (e.g. your company's cap on raises is stupid). It's awesome that you do this even if it's not economically rational. I think you are a unicorn both in that you do this and that you manage somewhere that allows you to have that policy. However hidden in that statement is "the appropriate employees." Odds are all your inappropriate employees are going to have to get an outside offer. If that churn is cheaper than the alternative then sure it's totally rational. I don't know why you consider it economically irrational to pay people this way. And by "appropriate people" I mean if I discover our analog EEs are being paid less than market I bring them up; just because front end javascript jockeys are in demand and their price is going up doesn't imply that marketing people are also underpaid. You appear from this one message to be extremely cynical. I'm sorry. Read the post carefully. I am not looking. But every time I have a drink or lunch with a friend, they make me offers that are hard to resist, with specific amounts way above what I'm currently making. Again, I am not looking, but the market is telling me what my fair price should be. My loyalty to my employer is still 100%. The cap is crap of course. That is just their mechanism to avoid paying market. One of the reasons that is hard to get raises is that employers find it hard to adjust their perception of your new worth once you "level up". You may be a brain surgeon now but to them, you're still the kid who used to mow their lawn. It is quite possible that you might not be worth the same to them as you would to another company i.e. market. You may not have a future there if you want to get paid what you are worth. :-( I was interviewed for this article on the General Assembly blog, and it is a direct answer to your question: How to (successfully) ask for a raise: https://generalassemb.ly/blog/how-to-successfully-ask-for-a-... In your paragraph that starts with "How can I go about asking for a raise?", I think your plan is very good. Estimate your market value, adjust that market value for the specific value you add to your company (accounting for things like your statement that "...it'd still be cheaper for the company to give me a hefty raise rather than finding someone...") and make that your goal. List the additional things you're doing to add value to the company since your current salary was set (you've basically already done this in your post here). Find examples of praise that you've gotten from colleagues. Bundle that all up and there's your case for a raise. I recommend talking to your manager about it (requesting your raise in a 1-on-1), then following up with a written request via email so it can be circulated to the deciders. That's about the best you can do as far as making a case for a raise. The real question is whether you'll go elsewhere if you determine that you're significantly under-paid and your company can't adjust your salary to reflect the value you add there. And of course that's something you'll have to determine on your own, but looking elsewhere (Google) is a good start. Good luck! There is no such thing as "you need a raise" There is only "Holy crap, we cannot afford to lose John, we better give him a raise NOW" You don't need an outside offer to ask for a raise. The cap for raises is nonsense. It may present a psychological barrier to your manager but mostly it is a prop to point to; so your manager can say "not my fault- see there's a sign that says no raises above 10%". The trick is they can give you more than 10% if it involves a promotion. The other trick is that raises are difficult to ask for. You have a cogent argument for a promotion and raise. Ask for it. Present your argument minus anything that could be viewed as a threat (like interviewing at Google). Employee "What do I need to do in order to [be paid X/get Y promotion]?" Boss "Are you sure you want to [be paid X/get Y promotion]?" In a sane organisation, this conversation should be possible. As you're working remotely, the boss may be unaware of creep with more and more responsibility you're taking. They should be reminded. Most people I've met are incredibly bad at managing directs remotely. I think I've decided to take a different approach... I want to know what I can do to be inline with the rest of the industry. I think it makes sense to propose this as a question to my boss(es) after highlighting my accomplishments, etc. At least, if they respond: "You'll never make that much money" - then I know where I stand. And this way, they know that I'm currently sizing myself up to the rest of the averages out there. Also, just stating that if Google throws me an offer, I'm obviously going to take it... but I'm not banking on that. This pay raise demand would be the latter if/else in the Google offer edge-case! You know already: without an offer, you are worth what you are currently paid. That said, raising informally the issue with your boss will let you know where you do stand. Why do you need a raise? I feel as though I need a raise because my responsibilities have changed drastically since my last raise. I'm now managing people and leading a project. On top of that, my pay has always been less than that of other folks in the industry doing the same work. These other folks that I've talked to also don't have to deal with the pain points of working with offshore folks in a timezone with a difference of 12 hours. I'm on meetings at 6AM and my day ends at 5PM if I'm lucky. Yet, I know people who do less work, for companies with 100% in-house teams that work 9 - 5. > I need a raise because my responsibilities have changed drastically since my last raise. This is entirely fair, as your contribution and value to the company has also increased. At the very least, the company should be paying market rates for your services. As a benchmark, median RoR guys in Boston are getting $115k > http://www.indeed.com/jobs?q=ruby+on+rails,+supervise+offsho... How to Ask- Understand that perceptions dominate all parts of negotiation. It's important to take the emotional temperature of your boss and deal with it. Is he happy with your performance? On this subject, Stuart Diamond is masterful > https://www.youtube.com/watch?v=liCOqUQzpQs Awesome, thanks for the feedback. I've literally never had anything negative come from my bosses, it's only been praise about how much I've grown and to keep up the good work. When I moved away to go remote, none of my bosses were worried and they all skipped my 1-on-1's with them for the entire first 6 weeks after I started working remote... to me I felt like they felt as if I was capable and there were no worries on either end. I agree, market value in Boston is very high and thus why I feel like I'm being underpaid for my work and responsibilities - even if I'm living in an area where the average is slightly lower. That's a silly question? Is the utility of money in question? Utility of money is probably assumed - the question is meant to force the OP to find credible reasons for a raise that would reduce any potential objections when he articulates his request to the employer.