Personal finance pop quiz: What's the most important single number in your household budget? Answer: Your income. And while you don't have as much control over how much you earn as you might have over how much you spend, you do have some. Now, one of the more effective ways to get a pay raise is to ask for one, but that can be a difficult conversation to start in any organization.
So, in this episode of Motley Fool Answers, hosts Robert Brokamp and Alison Southwick are joined by Lee Burbage and Kara Chambers of The Motley Fool's People Team to discuss their best tips for making your case for more money. In this segment, they discuss a few techniques for reducing the stress in the room when you're going to bring up salary and how to calibrate your value and expectations.
A full transcript follows the video.
This video was recorded on July 17, 2018.
Alison Southwick: OK, you've done your research, and you've put a time on your manager's calendar to sit down and talk. What's your advice for making this conversation go as smoothly as possible?
Lee Burbage: I would start with understanding what everyone's mood is going to be in that meeting. We like to think about it from a recruiting standpoint. When you're interviewing, remember that the person interviewing you is often just as nervous as you are because they don't do it all the time. These are conversations that bosses, managers, don't have on a daily basis. Compensation is often way more complicated than anyone realizes at any company. Just know that this probably isn't a conversation that your boss is perfectly set up to have. They may also be a little bit nervous, as well.
Southwick: Do you give them a heads up? Do you say, "I want to have a conversation about my compensation?" Rather than be like, "I would like to have a conversation! Put it on their calendar!" Just let them guess!
Kara Chambers: [laughs] In that tone.
Southwick: Let them guess what they're going to blindside them with!
Chambers: [laughs] Quick chat.
Southwick: [laughs] Yeah, a quick chat.
Burbage: I think I would make it a little broader. "Hey, I'd like to talk about my compensation, where I'm at in the company, the development path that I'm on, be sure that we're aligned around the places where I'm adding value." I think you can use Kara's checklist that she so well articulated to set up the meeting in a way that the boss is going to feel more prepared.
Southwick: Often, you're going to find that maybe your role and what you do is so important to you, but maybe not so valued by the company and the company's goals, right?
Chambers: Yeah. I think that can happen. Some companies have very strict job descriptions and checklists, some jobs do. For a lot of us knowledge workers, it's a little more fluid, so you don't spend the time -- unless you're actually recruiting and interviewing for a job -- really defining it.
What I'm hoping some people might uncover on Ask For A Raise Day is, a person has written down a list of all the things that they value, and they could say something like, "I am the best brain surgeon. I could make $X as a brain surgeon." Be prepared that the company might say, "Wait, we don't use brain surgery here. This isn't a valuable skill to us." There's a calibration going on about how you could be valued in the external marketplace vs. how your company values the work that you do. That calibration's important. Again, it's important not to take it personally and say, "You don't value me!"
Southwick: [laughs] How do you not take it personally?!
Chambers: It's painful, of course.
Southwick: Yeah, it's so hard.
Chambers: But, saying, "We don't value those skills," and then you have enough information to make the choice -- do I prefer to stay here and do this job, or ... What you're walking in saying is, "I could make more money elsewhere doing this," and making sure, if your company chooses to value that role in one way or another, that's just a good point to have. Or, if they say, "Actually, it's that other thing you do that's so valuable." Right. That's where it's really helpful.
Southwick: When you go into your meeting with your manager, do you think they should ... should I ... well, not me, but ... this is funny. I'm being like, "Hypothetically speaking," but, it's like, no, actually, this is literally something I'm going to be doing. [laughs]
Robert Brokamp: [laughs] Just asking for a friend!
Southwick: It's the reverse of that, it's like, "Oh, wait, no, I am asking for myself, I guess. This is going to have a very practical application." Do you go in with, "I want 4%," and then hope that they're going to come in around 2-3%? Lee, you talked about maybe even getting more creative in how you might want to negotiate, like bargaining for more time rather than more money.
Burbage: We do recommend that you come in with some sense of the marketplace, or some numbers. Just know that you might not get the specific number that you want. But, coming in with some data is helpful. I think there are lots of things available. It depends on the company you work at. It could be anything from, "I want more vacation time," if you're a company that tracks that strictly -- which we do not recommend, by the way.
Chambers: Don't do that, Alison. They're going to say yes. [laughs]
Southwick: "Kara, I want more vacation time!" "I don't know, Alison. Let me go send that up the flagpole. I don't know if Lee is going to go for it." [laughs] For those who don't know, we have unlimited vacation here at The Motley Fool. We have a no-policy vacation policy.
Burbage: Yes. Thank you for that.
Southwick: [laughs] Sorry!
Burbage: It could be just days in the office. More and more every year, people are working from home or other locations. Maybe a flexible work environment schedule. Maybe you want to come in later and leave earlier. "I want more management," "I want to work on a special project," "I want budget. I have a pet project that I want to do, and I'd love to get budget to do that."
Just be open that it might not be a base salary increase. Maybe your company is going through financing, and you'd like to participate, you want some equity. That could be a discussion point, as well. I think we're trying to pull people from just, "I want 4%," to a deeper development and alignment conversation with their boss that could go a lot of different ways, that it's just healthy and fun.