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 reflect on what you should do after your manager has agreed -- because you don't want to let the issue of why you're valuable to the organization (and how you could become more so) get forgotten for another year or more. Hence, their tips on how to lay the groundwork for the next conversation, all year long. Plus, they consider the question of whether today's low-unemployment environment makes this the right time to go hunting elsewhere and how managers should be dealing with compensation proactively.
A full transcript follows the video.
This video was recorded on July 17, 2018.
Alison Southwick: So, you've had your meeting. It could go in a number of different directions. It could become a conversation about development, it could be a conversation about your career, it could be about coaching you out. It could go a number of different ways! That's exciting! What a fun time for you! [laughs] But, assuming that everything goes well, and you get some amount of a raise or something, what's your advice as far as going forward? After you've gotten that raise, how can you do a better job of making sure that you're communicating to the company how awesome you are, so that it doesn't end up being another year before you're having a development conversation and you're going through this stressful exercise all over again?
Kara Chambers: We tested this on one team already before we went into this craziness, and they came up with a great idea. They built an internal resume for themselves. Each person at the team created a living document where you wrote down all the things that were the most valuable, where you think you can develop.
I think probably the best advice is to show that you're open to feedback and that you want to grow. I've had people write down this list and then use it regularly. Maybe you and your manager use it your one-on-ones, or you bring it back six months later and say, "Hey, here are the things I wanted to accomplish." That was one thing our test group piloted. That's one way to do it.
Also, HR wisdom tells everybody to never have a tough performance conversation in the middle of a comp conversation, but that still happens. Be emotionally ready for that. Just be ready for some tough feedback. What you said at the beginning, sometimes they're tough conversations. Being ready for that if it happens, and then being ready to handle it, however you go about being ready to handle it. [laughs] Use your own techniques.
It's a risky move. That's why people don't do it. It's not only socially risky. There's a chance someone says, "No! In fact, I can't believe you make this much!" or something crazy. [laughs]
Southwick: Has that happened here?!
Robert Brokamp: [laughs] "You're making that much? What were we thinking?!"
Chambers: No, no! I was just thinking, worst case scenario, playing those scenarios out in your head, like, what is the worst case scenario? Be ready for that. You know it's risky. If you hear no as an answer, don't leave angrily or something like that. Just saying something like, "How can I plan for this conversation to go better next year?" Or something like that.
Lee Burbage: I think that answer could vary depending on who your boss is. Understand, what are the metrics or signals that your boss is paying attention to? That's how to manage things long-term. You may be winning in one metric, and it turns out your boss is deciding your comp based on something else. Understand how you're being measured, pay attention to that, and how your boss likes that to be reported back to them. That's what I would be highlighting -- the things that your boss wants to see, that they're measuring you on. That would make sense.
Brokamp: Alison kicked off this segment by talking about the low unemployment rate. Implicit in that is, it's harder to find employees. Since you two are in the HR world, is now a good time to be going out and shopping around?
Southwick: Asking for a friend, Bro? [laughs]
Brokamp: Not at all! But, we're talking here about getting a raise from your current employer. Is now a good time to be going out and see what else you can get, testing your skills in the marketplace?
Burbage: I think that's a really hard question to answer. It depends on the person, the role you're in, the type of company you work for, the geography that you may or may not be tied to. That can vary wildly by city, industry, where you are in your career, the things that you're looking for. When I talk to people today, they tend to be more specific than I've ever experienced, in terms of what they want. I think what people are finding in a good marketplace is the ability to find, "I want to work on Mondays and Wednesdays, and I want to commute from the beach from these other two days, and I want it to be in the tech industry." I'm not sure specifically related to comp, but more so the type of job that you're looking for. I think those things are out there. What do you think, Kara?
Chambers: I also think, if you're listening and you're a manager of people, it's helpful to think about what you might do if someone came to you and asked for a raise. I like to think about, what would happen if that person came in tomorrow? Again, the way some people ask for raises is to say, "I just got a better offer." That's more likely to happen these days.
If you're a manager thinking about how you're working to keep that person so they don't have to come to you when they're unhappy -- because, again, most people aren't brave enough, even if we declared Ask For A Raise Day. So, just pay attention that silence doesn't mean happiness. Make sure you're going out and doing that if you want to retain an employee. Knowing your options is always helpful.
Burbage: We've talked a bit today about an individual going to their boss and asking for a raise. I would also encourage anyone out there who is a boss, have an open conversation with the people that work for you. "Hey, how are you feeling about your compensation?" That's probably not something that most managers or team leaders do, and I would encourage it.
If you get to the point where someone comes to you and says, "Hey, I got better offer somewhere else," oftentimes, we find that's too late. That person has already moved on in so many ways in their mind. As a team lead, you can also proactively have a difficult conversation.
Southwick: And have awesome results, right?
Burbage: Of course.
Burbage: I don't see a huge downside, really. As Kara said, it's possible the person says no, but then you're not really in a different place than you already were.
Southwick: You just know it. [laughs]
Chambers: Which is really important.
Burbage: Maybe you're not happy about it, but I do think you're in a better place, because then you know -- to Robert's point -- maybe you should be looking elsewhere. At least you know where you stand there. Otherwise, you could waste a lot of time, even years, waiting for something to happen that isn't going to. Have the conversation.
Southwick: There you go! Alright, listeners, go out there and do it! Lee believes in you, and Kara's excited, because you have your checklist and you're data-driven!
Chambers: Everybody do this tomorrow.
Brokamp: [laughs] And let us know how it turns out.
Southwick: Tomorrow's the day!
Burbage: That would be fun. A national day of Ask For A Raise, that'd be fun.
Chambers: Let's start a movement here.