What Should I Consider Before Asking My Boss For A Pay Raise?
What Should I Consider Before Asking My Boss For A Pay Raise?
Asking for a pay rise can feel like an awkward thing to navigate. Even more so, as employers have shown wage restraint in the last two years of disruption and workers have accepted a wage cut or freeze in return for job security. However, in light of the Great Resignation wave and the economy on the mend, is it time we start having honest discussions?
According to human resources services company ADP, in its annual People At Work report, workers in Singapore have high expectations of being given a pay rise as costs of living increase amid a sharp labour crunch, with six in 10 Singaporean workers prepared to request a raise. Globally, more than three quarters of workers say they are likely to ask for a pay rise if they feel they deserve one.
Timothy Go & Bharati Jagdish spoke with Adrian Choo, CEO, Career Agility International to find out more about this current trend from the perspective of employers and how you should go about discussing wage raises with your employer.
Timothy Go: Is it really the right time now to be asking for a pay raise?
Adrian Choo: Right now, demand has gone up and companies are out on the hunt for good talent as they are looking to increase their market share and get back into business. So, they need good people and what better way to get good people in by paying more?
In sectors where the labour crunches are very acute, for instance in technology, we see very aggressive poaching and hiring. This is obviously not sustainable because if you keep getting salary increments after a while, you might price yourself out of the market but right now, the demand is still there. Just recently, Microsoft announced that they're going to double their salary budget for everybody this year to improve their stock options, retain talent and attract the best talent in the market.
Bharati Jagdish: But those are companies with all the funds in the world. How about companies who have issues with cost pressures because employers also have to reconcile higher wages with business continuity, right?
Adrian: Yes, there will be a limit to which salaries can realistically increase, that's why some companies are going beyond just money to provide various perks such as option to Work-From-Home, remote working or even career coaching services. Having a good work environment, good company welfare or simply being a good employer does help in pulling in and retaining talent, but money still remains the most important factor.
Bharati: However, workers in Singapore should also take into account the fact that the world has opened up, and companies in Singapore now have access to remote workers across borders, who might be a lot cheaper and just as talented as us, right?
Adrian: That is why there is a ceiling to watch for salary increases for local workers. If the local talents are asking for too much money, at a certain point, the bosses are going to consider importing talents or outsourcing the work to another country where it can be done cheaper, and maybe better. We have to be realistic about salary increases, especially since not every industry in every sector has such good labour demand.
Timothy: With cost pressures and supply issues that many SMEs face, what should employees take note of before they approach their boss about a salary increase?
(1) Consider the timing of when you ask for the raise
If your company is having a great quarter, then that’s a good time to start thinking about asking your boss for a raise. Conversely, if the company is suffering losses, obviously it's not going to happen.
(2) Build a business case when asking for a raise
Quantify how much value you bring, how much revenue you’ve brought in the past year to present to your employer to justify your raise.
(3) Sweeten the deal by giving more in return, especially for companies that are not currently doing extremely well
Offer to enhance your portfolio and increase your own workload in exchange for a pay raise. For example, suggest that you fill in for other employees that have recently left and that instead, you perform those roles. This would be a lot easier for the employer to stomach than just giving you a 20% increase for nothing.
Timothy: As a boss, I would want to hear if somebody is asking me for a raise to justify what I'm getting for giving them a little bit more because, I would think that through the years they've been working with me, they’ve also developed some skills that would be helpful in running my business.
Adrian: It’s true. So, the big question you need to ask is: Am I asking for a salary increment as an entitlement, or is it something that I must earn? Entitlement means “I don't care, I’ve been here for the past year, I demand to have an increase.” Shallow bosses might not take that too kindly. Hence, the importance of coming up with a solid business case to bring to your boss to ask for a more reasonable and equitable salary.
Timothy: Is there a danger to how far an employee can push for a raise?
Adrian: I believe that if the numbers are reasonable, there shouldn’t be too much danger. The reality is that if there are other employers who are willing to pay you money for your work, you can just make a move easily. Your bosses must note and pay you fairly to what the market is paying rather than what he feels is your worth.
Therefore, you must know your market value, with regards to what you could get outside your company. One of the best ways to find out is to talk to headhunters when they call you, ask them how your current salary stacks up in the market for employees in similar industries, levels of seniority and portfolios. Discuss further with multiple headhunters to calibrate an accurate market rate for yourself and use that as the basis on which you can ask for a raise. From your boss’ perspective, either they give you your raise to match the market rates or you’re going to leave the company and they will have to pay a new hire the same market rate.
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This interview was broadcasted on MONEY FM 89.3 on 23 May 2022.
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