Get that paper, Part 1: finding your market rate for a raise

Let’s be clear: what you are inherently worth has absolutely nothing to do with how much money you make. 

You are priceless. 

When prices go up faster than earnings, your dollars can’t buy as much as they used to.
(Source: CNBC)

However, since you cannot be paid in unicorn milk and angel tears, you should absolutely be compensated at a fair market rate based on your unique skills and experience. And there’s a good chance that’s not happening—especially as nationwide living costs are quickly outpacing wage growth

Over the past year, Redfin reports that US buyers need a 34% increase in income to afford median-priced homes. In my home city of Charlotte, it’s 39%. We’ve seen some wage growth over the past year, but inflation is eating away at those gains. If you’re feeling the pain, it’s time to take action. 

In many cases, the most common way to increase your pay is to change jobs. You may feel more comfortable negotiating when you start with a new employer because that feels like you’re supposed to ask for money.

But if you like your current job and want to stay, it’s worth it to ask for the raise you deserve—especially in the currently-tight labor market. You’re harder to replace right now! Once your current employer has hired and trained you, it is more cost-effective for them to retain you—and your wealth of institutional knowledge—than to try and find another you. If you’re a good employee (and I’m sure you are), your value to your employer increases with time; however, your yearly raises may not have kept up with your market value.

Although many companies don’t make an intentional effort around this, your pay increases should both reward your performance and reflect inflation and cost of living increases. If your pay doesn’t keep pace with those, you’ve essentially taken a pay cut. 

Tenured people at a company are often underpaid compared to their newer peers. It’s frustrating but true; the pay increase you get from switching to a competitor is usually higher than the pay raises you get by staying put. 

But it doesn’t have to be that way! 

Does anyone actually do this? 

Heck yes they do! 

This past year, I’ve helped one client—let’s call them a gender-neutral “Blake” to keep the mystery alive—to increase their salary dramatically without switching jobs. 

Our initial discussion began when Blake realized they were underpaid compared to a newly-hired work friend with nearly identical roles and responsibilities. After some additional market-rate research, they approached their manager for an in-cycle pay raise in line with their responsibilities. Blake received a decent increase, and they were tapped for an expanded role soon after. (Blake is a rock star.) 

While managing a project for this expanded role, Blake was provided with the pay data for everyone in their department and realized they were still well below the median salary for their position. 

Blake thought about looking for a new role but decided to take action instead. They pulled out all the best-practice stops, and their salary is now a full 50% higher than it was a year ago. 

If you want to be like Blake, your to-do list will look like this: 

  1. Determine your true market rate 
  2. Identify the people involved in your pay decisions
  3. Find the right time to ask
  4. Make your case for better compensation
  5. Get that paper, get creative, or GTFO 

In Part 1 of this two-part review, we figure out your market rate; this is primarily geared toward people with roots at a place of employment, but many of these tips work for determining what to ask for at a new job. If you already know your market rate, sit tight. Part 2 outlines the best ways to ask for that money to maximize your chance of getting it. 

Determine your true market rate

One starting point for pay analysis is, of course, the internet. If nothing else, you can—and should!—ensure you’ve been receiving cost-of-living and inflation adjustments for your salary. 

The US Bureau of Labor Statistics (BLS) has a simple but clear calculator here that can tell you if your pay has kept pace with inflation. Enter your starting salary in the top box and the date you started your job, then compare it to what you’re paid now. 

Cost of living increases will vary by your area. You may need to get nerdy about it and dive deeper into BLS statistics by state, but if you’re required to work in an area where living costs have shot up faster than average, it’s worth it. Don’t sleep on local and regional journalism, either. I often see headlines from Axios Charlotte and the Charlotte Observer about changes to the cost of living here. (Let me know if you need help with finding sources to figure out your local costs.) 

Remember: If you’ve been getting “performance raises” for excellence, and your pay is simply on track with the above calculator, that means you haven’t really been getting performance raises… just cost-of-living increases. It’s ok to ask for more. 

As far as calculating the market rate for your specific industry, there are a few good salary information sites (like these) that can help you find a range relevant to your industry, area, and experience. But if you’re working for a midsize or larger company, your coworkers are your best and most realistic source for salary expectations. 

Most of the people I know who successfully gathered ground truth on their coworkers’ salaries were then able to confidently ask for—and obtain—a raise. That knowledge typically came from friendships, transparent managers, and former colleagues. 

In one memorable case, an extremely talented woman I know—let’s call her Lilly, like the fair pay activist Lilly Ledbetter—was promoted to a role managing people making way more than she was, despite those subordinates having fewer qualifications and a smaller scope of responsibility. This happened because Lilly started near the bottom of her company’s ladder and blazed her way up. Despite numerous top-tier performance reviews, her company’s pay increases were pegged to percentages. Because her starting salary was so low, her increases were smaller. 

Lilly has fantastic relationship skills, and she cultivated honest and transparent pay discussions with friends and coworkers and gathered valuable information about what fair pay for her role should be. Along the way, she shared her knowledge with her coworkers to help lift others up, too. Lilly built her case for a market-rate adjustment, and she had a supportive manager who advocated for her to receive a solid increase that aligned her with her peers. 

It made my blood boil that Lilly even had to ask for that adjustment, but most companies assume they’re paying you enough to stay until you bring it up. I’ve even heard managers triumphantly call a productive employee “so cheap!” when they outperform a too-low salary. (Oof.) Assume your employer is underpaying you until you find evidence to the contrary. Not because they’re trying to harm you; that’s just how the system is set up.  

Let’s talk about pay, baby

Talking about money with your work friends may feel strange—and that’s okay! Cash chats don’t come naturally to all of us. But it’s not your fault, either. Some companies create a culture that makes workers feel like it’s wrong to discuss salary.

Typically, employers don’t like pay transparency because it can trigger negotiations for better pay and benefits, but your right to talk with other employees about your salary is protected by federal law. Pay transparency is good for workers and especially for women, mothers, and minorities, who are more likely to be underpaid. There’s nothing wrong, disloyal, or inappropriate about discussing money, and it’s your best tool for discovering what you can expect from your current job. 

However, it’s still awkward for many people, so we want to respect that. Most people will not feel great leaving “receipts” or discussing this over the company network. Talk about pay in person, on the phone, or in a video chat. As with any sensitive discussion, ensure you create a safe environment for all parties. If you’re talking with your work bestie, it’s probably not going to be hard to do that. If you’re approaching someone you don’t know as well, consider asking them to grab a cup of coffee, choosing a quiet moment when the store/office is empty, or formally requesting time on their calendar.

If you aren’t especially close with the coworkers you’d like to ask, I also recommend that you invest in building some rapport with them first. Pay is a discussion that feels private to most people, so don’t be a stranger. Asking for advice, perspective, or even mentorship on the job in general before asking about money may open the door to a more organic discussion (and you may get some good advice out of it!). It’s ok to be a little vulnerable about your desire for growth in your role and salary. 

When you ask, it should go something like this: 

“I’m: 

  • trying to figure out realistic expectations for salary growth if I stay in this role/department
  • concerned that I’m being paid below market rate for this job
  • not sure if my pay is keeping pace with the cost of living for this area 
  • <whatever feels authentic to you and your situation>

“Do you mind if I ask how much you make? I understand if you don’t want to say; I’m happy to be transparent about my salary, too, and I’ll keep this between us.”   

You should be prepared to share your information and reassure your colleague that you will treat any disclosures with discretion and care. 

Also, don’t be mad at your colleague if they happen to make more than you. (It’s not their fault, and it’s not your fault; it’s late-stage capitalism’s fault.) You might still feel some kind of way about it, and that’s ok. A helpful reframe: if they’re being paid more than you, they’ve created a benchmark that allows you to ask for more money. 

Slightly indirect options 

If you decide to go the colleague route but you’re not quite ready for full disclosure (baby steps, sweetie), there are various approaches that I’ve found helpful. One method is to use hypothetical or actual ranges for a role. It’s easier for some people to say, “I’ve heard the pay range is $70–90k” than to say “I got hired at $70k and now I’m at $80k but the guy in the cubicle next to me let slip that he’s making $90k.” 

Another is to use percentages. Your friend might feel weird telling you they got a $5k raise but feel safe saying their raise was 5%. This approach is personal without fully dishing details, provides helpful information, and may open the door for more specifics later. 

One of my absolute favorite low-risk sources for salary information is to talk with people who are leaving your company or department. Offering to go for a farewell beverage and asking about their decision to leave is sometimes all it takes. They don’t have anything to lose, so they’re usually willing to spill the tea. 

If you have a good relationship with your manager, this may be a conversation you can have with them too. Not “hey, am I underpaid?” (although this can work, depending on your relationship) but more “I’ve been thinking about my future here; what’s a realistic expectation for salary growth for this role type/at this company?” 

Finally, network with recruiters and compensation reps in your field. They can give you expert insights to the market and salary information. If you wind up in the market for a new role or can send friends their way, it can be a mutually beneficial relationship. 

I think I have a number; now what?

Well done! You’ve done your research and the math and now have a good sense of what is realistic for your role, company, and/or industry. Gold star!  

In Part 2, you’ll research exactly who and when to ask for a raise, and learn how to create a request that will be really difficult to turn down. 

If you need any support with this, don’t hesitate to reach out. This is one of my favorite things to help clients with. Salary investigation is an incredible tool, and I always enjoy hearing about what works in different situations. If you or someone you know successfully negotiated for a raise, I’d LOVE to hear from you. (Don’t worry, you can have a cool anonymous nickname.)

Big thanks as always to my favorite editor. Any incorrectly-crafted dashes are mine alone.

Stock photos by Pixabay, August de Richelieu, and Christina Morillo on Pexels.com.

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