The Automatic Millionaire
by David Bach
Five Steps to Getting a Bigger Raise
by David Bach
Tuesday, July 18, 2006
Short of winning the lottery, nothing can change your finances as fast as getting a raise. And sometimes changing your life is as simple as changing your mind about what's possible. Ask a new question, take a new approach, and you may very well get a new result.
So ask yourself this: What would it take for me to get a bigger raise this year?
Not everyone has control over getting a raise, of course -- government workers and union- or contract-based employees with fixed salaries, for example. Everyone else, though, should keep reading.
Why Settle for an Average Raise?
According to the 2005/2006 National Salary Budget Survey from Salary.com, the average salary will rise by about 3.7 percent in 2006.
That's just the average. Many people will get no raise this year; others will get fired. The workplace can be brutal. On the other hand, as you read this, someone somewhere is asking for and getting a substantial raise -- 10, 20, 30 percent or more.
In fact, you probably know someone who earns more then you do but who isn't as good at their job. That's because raises don't always go to those who deserve them most. Frequently, they go to those who ask for them more persuasively and more often, and who plan for them better.
What can you do about this? Start by deciding that you want to earn more, and then come up with a plan to get it. Here are five powerful steps that have helped thousands earn more money.
Step 1: Brand Yourself
Nothing determines your value in the marketplace more than how you position yourself and how you come across to your boss. Ask yourself these questions and answer them honestly:
As an employee, do I stand out or blend in?
Do I come to work early, on time, or late?
Do I have a written plan for my career that describes how I add value at work, or do I wing it?
Do I have a relationship with the person who determines whether I should get a raise, or am I distant -- or worse, actively avoidant?
Do I really care about the company I work for and the job I do, or is it just a paycheck?
Do I take the initiative to spend my own time, money, or effort learning new job skills so I can add greater value to my company?
Do I have a vision of where I want to be with my employer in three to five years?
Does my employer know I have such a vision?
In order for your employer to recognize your value, they have to perceive your value. And they can't perceive you as a high-value brand if you don't perceive it -- and project it -- yourself.
Step 2: Write Your Action Plan
Write the following on a piece of paper: your name, your current annual salary, how much of a raise you want, the percentage of your current salary it represents, your new salary after the raise, and your deadline for getting it.
Don't just pull a new salary figure out of the air. Remember -- you're not going to be given a raise, you're going to earn one by increasing your value to the organization. To get a sense for what pay ranges are for jobs like yours, and for targeted salary advice, check the following web sites:
Salary.com: One of the most widely recognized sources of information for employee pay levels.
PayScale: Provides salary profiles for many jobs (choose "Employee" and click "Select").
Yahoo! HotJobs: Includes targeted salary advice.
Use the salary ranges and advice you find on these sites as guides, not as absolutes. If you find that you're currently earning at or below the bottom of the range, you may have lots of room to negotiate. If you're near or above the top of the range, you can still ask for more -- you'll just have to work harder to demonstrate your exceptional value.
Step 3: Put Yourself in Your Boss' Shoes
Now it's time to determine how you'll add more value to your work. Asking for a raise can backfire if you aren't willing or able to deliver the goods. A sound way to determine your perceived value is to imagine how your boss would respond if you asked what I call the Seven Magic Questions:
What is the most important thing I do for you?
What do you think I'm uniquely talented at?
What are you afraid to tell me about my job or how I do it?
How could I add more value to my job?
How could I be your "dream team" employee?
Knowing all you've learned about me since I've worked here, would you hire me again today?
What would it take for me to get a raise in the next six months?
If you can't answer questions one through six easily, then it's time to meet informally with your boss. When you do, be honest about your goal. Start by saying, "I want to earn more money at work and I'm committed to adding enormous value to you. I want to become clearer on how I can help you better reach your goals and the company's goals." Then ask the Seven Magic Questions
Step 4: Focus on the 80/20 Rule
You may be familiar with the idea that in sales and commerce, 80 percent of your revenue tends to come from 20 percent of your efforts. Think about your own 80/20 rule: What is it that you do with 20 percent of your time and effort at work that creates 80 percent of your value? Once you've identified these high-value tasks, write down your plan for doing more of them.
Identify and maximize your most productive activities, and minimize the busywork that takes up most of your time but produces little of value. Then put your plan into action.
Step 5: Ask for Your Raise
After you've put your plan into action -- and, just as important, demonstrated its results -- it's time to ask for a raise. Make an appointment with your boss, look him or her in the eye, and share what you've done to increase your value and how you plan to add even more value in the future. Then share the salary you want.
It may seem scary, but what's the worst that can happen? Your boss will say no. Even then, you've brought to his or her attention that you're increasing your value as an employee, and that you expect to be compensated appropriately. It also allows you to ask magic question number seven directly: "What would it take for me to get a raise in the next six months?"
What It Costs to Replace You
A final note -- it can cost an employer up to a year of your salary to replace you. Depending on the level of training your company has invested in you, hiring and training a "new you" could cost a fortune, and employers know this.
Compared to your replacement costs, the cost of retaining a highly productive, highly motivated employee with a reasonable if substantial raise is well worthwhile.
The Automatic Millionaire is the registered trademark of David Bach and FinishRich Media, LLC.