Lean in to your earning potential. This is my call to action for you this year.
What do I mean by this? If you’re spending time at work, then own it, including fiscally. It means taking risks, going for positions, projects and promotions that will pay more. It necessitates putting your hand up, negotiating and stretching yourself.
Securing a salary increase is a fabulous way to achieve financial independence that much sooner. Plus, let’s face it, it will give you a buzz if you go for something and get it rather than simply going through the motions of showing up for work and doing the same old thing.
This week I had a conversation with a professor of business. He was telling me how he instils certain values in his students. His students have job offers before they finish their degrees, which he admits sometimes backfires because the impetus to achieve their best can be diminished.
He’s doing a lot right and his "kids", as he calls them, stay in touch.
The professor shared the story of two alumni that played out recently. One had two-and-a-half years of work experience and had been approached by a firm with an offer of $90,000 (Dh330,525).
The same firm approached another alumnus with 18 months of experience under her belt. She was offered $85,000.
The $90,000 person wanted to stay on with his company because it meant he could relocate with them to a place where his soon-to-be fiancée was getting a big career break. So, he turned down the lucrative offer in favour of his personal life.
The $85,000 person said she’d accept the offer if they matched the $90,000 being offered to the other candidate. Her professor had shared the inside intel with her.
The amount was matched. This took guts because it meant a $25,000 increase on her then salary.
During an exit interview with her existing employer, they matched the $90,000 pay, and she stayed. So she managed a $25,000 higher pay because she decided to be gutsy. That’s a 38.5 per cent salary increase based on one moment of bravery.
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This means that if she gets the 4.5 per cent salary increase for 2020, that the global consulting company Mercer projected in a study conducted at the end of last year, she will be earning an additional $4,050 instead of $2,929. On it goes from there with incremental increases piling up, and of course the next rise means she'll bag more again.
Almost two thirds of people never ask for a raise, according to a 2018 survey by the US career site PayScale. Of those who did, about 70 per cent reported receiving some sort of increase.
If you don’t want to count every penny or use extra time for a side hustle, then pushing hard, taking risks and earning more in your current job is another way of speeding up your journey to financial independence. I’m sharing a few pointers on how you can go about it:
Do your homework
Research salary comparison websites. Talk to HR or job recruitment firms and find out what pay your position receives.
The person who decides your salary might know very little about what you do and the value you add to the company. Have hard evidence to back up your request, such as the targets you've reached and the contracts you've signed.
Have an answer
Make sure you can answer this question: “Why should we give you a pay rise?”
Find out when budgets are being planned and make your request before things are finalised. Ideally, match this up with the feel good factor of a project being successfully completed.
Research at Columbia Business School, published in the Journal of Experimental Social Psychology, finds that asking for a specific and precise salary works better than putting forward a rounded up figure. It indicates, or is assumed, that you have thought things through and have reasons for your precise figure.
Make sure you can justify it. Imagine putting forward a figure of $50,250 without being able to explain what the $250 was for.
Always have a Plan B
If you don’t get the pay increase you want, ask for something else. It could be flexible work, an extra week’s holiday every year or training and development.
I don’t know of anyone who got fired for asking for a pay rise. I’d say it has the opposite effect – it shows you have ambition and want to stay with the company. As long as you don’t go about it by getting a job offer first, then threatening you’ll leave.
You have more earning potential than you think but you have to take some risks to unlock it. Remember, 70 per cent of those who asked in the PayScale study got an increase. Go for it.