Wal-Mart is no altruist on pay.
Wal-Mart WAL-MART STORES INC. WMT -0.59% made big headlines when it announced pay boosts for its lowest-paid employees. Some investors may be appalled by this “altruistic” news, but don’t worry: it makes perfect business sense, and Wal-Mart’s smart to do it.
The Bentonville, Ark.-based megaretailer has made waves by announcing that it’s raising its minimum salary; soon, its lowest paid employees will make $9 per hour and by next year, the level will go up to $10, well above the federally mandated minimum wage of $7.25 per hour.
Some people aren’t jazzed about Wal-Mart’s decision. The stock dropped on the news Thursday, and some analysts have issued downgrades. Those are short-sighted responses, though. Wal-Mart’s doing the smart thing by working on the most controversial element of its business, and the one that makes many consumers believe its low-priced merchandise just isn’t worth the cost to many Americans’ personal bottom lines.
The move is going to cost Wal-Mart about a billion dollars, and Wal-Mart’s CEO Doug McMillon talked up the morale-boosting element of the strategy, as well as the idea of giving employees “opportunity” and a career path. People may feel cynical about his statements, but the spirit there is right on. Employees who are treated well are more engaged, and are more likely to provide a positive customer experience.
Wal-Mart gets a lot more attention for worker strikes than for its customer service, and that’s a problem that’s long overdue for a fix.
Take this job and shove it
As it stands now, Wal-Mart’s rating on job reviews site Glassdoor.com is a dismal 2.8, with only 44% of reviewers willing to recommend working there to a friend. Compare that to Costco (3.9, 80% would recommend to a friend), Whole Foods (3.6, 73% would recommend to a friend), and Starbucks (3.7, 76% would recommend to a friend). We can throw McDonald’s in for good measure, since it often shares the hot seat with Wal-Mart — its rating is 3.0, with just 50% willing to recommend a job there to a pal.
There’s been increasing attention to severe income equality and the fact that many people working for companies like Wal-Mart and McDonald’s MCDONALD'S CORP. MCD -0.04% are making poverty wages (and are reliant on public subsidization, which of course means we all lose). Those in the ivory towers may say the recession’s over, but there are still a lot of people out there who haven’t seen their wages rise much if at all as the economy supposedly “recovered.”
On the other hand, companies like Costco COSTCO WHOLESALE CORPORATION COST -1.19% , Whole Foods Market WHOLE FOODS MARKET INC. WFM -0.95% , and Starbucks STARBUCKS CORPORATION SBUX -0.27% , all treat their employees well — making them anomalies in the modern retail industry. (Starbucks, in fact, began rolling out a round of pay raises to baristas earlier this year.) They haven’t been subject to nearly the same amount of scathing scrutiny on the worker front as Wal-Mart has been.
Even more pointedly, they have managed to do so while being highly profitable, successful companies, and they have done what well-run capitalistic companies should do: they built employee care into their business missions without waiting for a law forcing them to.
Dollars and cents, not heart and soul
There are plenty of pins we can poke into the happy bubble of Wal-Mart’s announcement, not least of which is the fact that we’re still not talking about a heck of a lot of money even with the new wage floors. Wal-Mart’s wages would still leave some subsisting along the poverty line. Many activists have been rallying for what they peg as a more reasonable $15 per hour “living wage.”
Wal-Mart’s also not turning into a big softie. MarketWatch pointed out that the company’s press release not only included the news about the pay increase, but also a one-time $0.05 per share charge related to a “wage and litigation matter.” We all know that Wal-Mart’s been in the hot seat for years, but that is a good reminder that it’s facing dollars and cents risks on many fronts, including in court.
And of course, the specter of the possibility of a federal minimum wage hike hangs over it all as well. The truth is, should the minimum wage increase, companies like Wal-Mart that have already started dealing with it will be in a far better competitive and even financial position than those who haven’t. They — and you, if you’re a shareholder — will have a whole lot of peace of mind as the laggards struggle to adjust their businesses.
Positive reinforcement for positive business
All in all, though, maybe even the most critical among us should probably give Wal-Mart some credit for being on the right track. Business can be a force for positive change, and Wal-Mart’s high-profile move might help catalyze a little more of a voluntary “race to the top” regarding many Americans’ wages instead of the race to the bottom behavior that has been all too common in too many pockets of our economy.
And even the investors who are appalled at Wal-Mart’s doling out raises should think twice. Anyone who cares about capitalism and free markets should have always considered the idea that companies like Wal-Mart and McDonald’s actually weren’t doing any of us any favors by squeezing profits out of people and hardly budging over what the government demanded by law — resulting in a state in which so many citizens’ pay was so pathetically low that they have had to rely on public assistance.
Wal-Mart’s no altruist — it’s doing what it has to do, and it certainly seems like it could do more. Given Wal-Mart’s massive scale, though, this move will hopefully nudge more corporate managements to see the risk of not moving on this front. Not to mention highlighting to corporate American the importance of investing in its own employees. That would be a win for all of us.
These 5 moves can help you make sure you get what you deserve.
Two corporate giants have made headlines recently for perking up their workers’ paychecks.
Last month, health insurance provider Aetna announced it would be raising the lowest wage it pays to $16 an hour, effectively giving raises to 5,700 of the company’s workers. On Thursday, Walmart followed Aetna’s lead, revealing it would be giving 500,000 associates a salary bump of at least $1.75 above the federal minimum wage.
While across-the-board wage increases such as these are unusual, other corporations are also expected to be more generous with pay this year. Among mid- and large-sized employers, the average increase in base pay is expected to be 3.0% in 2015, up from 2.9% in 2014 and 2.8% in 2013, according to HR consulting firm Mercer.
You can help your chances of boosting your pay with these five tips:
1. Ask at the Right Time
Choosing the optimal time to approach your boss about a raise will significantly increase your chances of success. Stay on top of your own industry’s salary trends and consider whether your company and division are doing well enough to afford what you’re asking for. It’s also a good idea to ask for a raise a few months before performance reviews so that salaries aren’t already set.
2. Know What Others are Getting
Before you ask for a raise, you’re going to need to know what kind of raise is reasonable. Check sites like PayScale.com and GlassDoor.com to get an idea of the industry standard for your position, then consult your colleagues to see what the story is internally. For women, that means making sure to check with your male mentors as well. As MONEY’s Margaret Magnarelli writes, female employees tend to be underpaid relative to their male counterparts, and often remain unfairly compensated because they compare salaries with female colleagues who are also underpaid. Gathering a broad cross section of salary data can help break through the ceiling.
3. Be Able to Prove You’re Better than Average
The 3% average bump that Mercer projects isn’t bad, but being better than the norm can be very lucrative. In 2014, Mercer said the highest-performing employees received a 4.8% raise—more than 2 percentage points higher than the average for that year. How do you show you’re the best of the best? Gather a portfolio of past endorsements and ask satisfied clients to write testimonials. Then do your best to quantify your accomplishments so that your boss has the hard numbers as well.
Read more: 5 Ways to Get a Big Raise Now
4. Identify Your Added Value
Think about what you do that no one else at the office can do—either where you’ve particularly excelled or what highly marketable skill you bring to the table—and then frame your ask around this added value. Jim Hopkinson of SalaryTutor.com suggests framing your requests as follows: “Not only do I have [all the standard requirements that everyone else has] + but I also possess [the following unique traits that make me worth more money].”
5. Just Ask!
As Wayne Gretzky said, you miss you 100% of the shots you don’t take. According to CareerBuilder, 56% of workers have never asked for a raise, which is a shame because 44% of those who did ask got the amount they asked for, and 31% still got some kind of salary boost. It might seem daunting to ask for more money with the economy still in recovery mode, but job openings are the highest they’ve been in a decade, almost three-quarters of employers say they’re worried about losing talented workers, and raises are gradually getting larger. Being assertive can be scary, but don’t let fear stand in the way of a bigger salary.
More from Money.com:
When companies battle for talent, workers win
Raises are back—finally. A new report says roughly 90% of companies will give raises this year, but workers are going to have to earn those fatter paychecks: More than half of companies responding to PayScales’s annual Compensation Best Practices Report say their main reason for giving raises is to reward performance; only about 20% say the increased cost of living is the main reason they give raises.
And don’t hold your breath for a windfall. The vast majority of these say raises will be 5% or less.
Still, this is an improvement. In its annual Compensation Best Practices Report, compensation research company PayScale finds that 85% of responding companies gave raises last year and 89% of companies say they’ll give raises this year. The percentage of companies doling out pay increases has crept up for the past few years, after hitting a low of roughly 30% in 2010, and was above 80% last year. In addition, three quarters of responding companies say they’ve adjusted their compensation structure within the past year.
Smaller companies are more likely to dole out raises to keep valuable workers on board — something to keep in mind if you work at one. Small firms also are more likely to have individualized salary ranges for each position.
About two thirds of respondents say they gave cost-of-living raises last year, with this practice most common in the healthcare and social assistance sector — almost three quarters of these companies gave cost-of-living raises. On the flip side, this is the sector least likely to give workers bonuses.
Companies that rely on large labor pools of lower-skilled workers may give cost-of-living pay increases because there’s not as many good ways to measure performance, and the relative competitiveness of the work often doesn’t demand it. “However, even in industries like retail and healthcare which have a lot of minimum wage positions, there are still highly competitive jobs in segments of their workforce,” like management and IT, PayScale vice president of marketing Tim Low explains.
In more competitive sectors, though, talented workers can command even more. Just over three in five companies said they’ll increase pay for jobs that are in high demand. “We see a strong trend towards pay for performance,” Low said. Professional, Scientific and Tech Services, along with Information, Media, and Telecommunications are the two categories — as defined by PayScale — in which companies are most likely to report that over 50 percent of positions are competitive.
“The trend has been emerging for a while, but it’s part of a greater connection between compensation and business outcomes,” Low says. “The current economy in many sectors gives employees more choices now than they had just a few years ago.”
The economic picture continues to mend, but workers still looking for better wages.
The U.S. economy added 257,000 jobs in January, the 12th consecutive month employers hired more than 200,000 workers. Meanwhile, the unemployment rate rose slightly to 5.7%.
Employers also added more employees in the end of 2014 than originally thought. The Labor Department revised November’s employment change to 423,000, compared to 353,000, and December’s to 329,000, from 252,000.
The positive monthly employment report is another sign of a building economic recovery. The four-week moving average initial jobless claims recently fell by 6,500 to 292,750 The employment cost index, which measures salary and benefits, increased by 2.3% in the last three months of 2014. And the gross domestic product grew by 2.6% in the last quarter of 2014 after climbing by 5%. This good news, along with cheap energy prices, has also pushed up economic confidence.
The economy still is not back to a pre-2008 definition of normal, however. The headline unemployment rate measures only people who are looking for work. Since the post-crisis recession, however, many people dropped out of the work force, and they have been slow to come back in. Today’s report shows the labor-force participation rate at 62.9%, a marginal increase from a month ago, but still in line with a long-term decline. The rate is five points lower than it was at the turn of the century.
Another sign that the job market recovery remains soft: Average hourly wages in January were only up 2.2% compared to a year earlier. (While that’s an improvement over last month, wages grew around 4% per year prior to the Great Recession.) Long-term unemployment is also still at elevated levels.
Modest wage growth helps to explain why inflation has remained low, even after stripping out the effect of falling prices at the gas pump. Core inflation, which strips away volatile energy and food prices, was up 1.6% year-over-year in December. That’s well below the 2% the Federal Reserve says it is targeting in deciding whether or not to raise key interest rates.
The Fed has been holding short-term rates near zero since the crisis, and is widely expected to begin raising rates this year as the economy improves. But they’ll have to weigh the encouraging signs from the new unemployment numbers against continued low inflation and wage growth, as well as the mounting economic troubles in Europe.
Sam Bullard, a senior economist at Wells Fargo Securities, shares the Fed’s belief that the labor market and economy are repairing, and thinks more hiring will push down the unemployment rate in the months to come, which will result in more money in worker’s paychecks. Eventually.
“Overall, we’re looking at an economy that’s improving,” says Bullard. “The one missing piece is a pickup in wage growth.”
That doesn't even count the many endorsements, new player contracts, and increased merchandise and season ticket sales that surely would have resulted had the Seattle Seahawks won their second consecutive Super Bowl.
The “worst call in Super Bowl history.” That’s how the decision of Seattle Seahawks coach Pete Carroll to throw the ball on the 1-yard line rather than hand the ball to the NFL’s best power running back, Marshawn Lynch, will be remembered.
The decision, which resulted in a stunning interception by the Patriots, lost the Super Bowl championship for the Seahawks. It also cost Seahawks players and the team as a whole a huge chunk of change. How much?
Last year, according to CNBC, 63 players on the Seahawks roster were collectively awarded $5.8 million in bonus pay after the team won the 2014 Super Bowl. On the other hand, the game’s runner-ups, the Denver Broncos, received bonuses to the tune of “just” $2.9 million. The exact number of players that get playoff and Super Bowl bonuses varies because players on the injured reserve, and even some who are traded during the season but played a significant number of games with the team that year, receive bonuses alongside all of those on the official game-time 53-player roster.
This year, the salary bonus for players on Super Bowl teams has inched up a bit to $97,000 (up from $92,000 a year ago) for each winning player, compared with $49,000 for players on the losing squad ($46,000 a year ago). So the total gap between the game’s winners and losers should be a bit higher than it was last year, when the difference was just under $3 million.
Then we must add in the fact that each of the 150 or so players and coaches on the winning team gets a blingy Super Bowl ring. The NFL allocates $5,000 per ring, but the winning teams are known to spend much more on them. Given how rare and collectible they are, a Super Bowl ring is easily valued at $50,000 to $75,000 and sometimes is worth in the hundreds of thousands if it’s owned by a notable player or coach.
All in all, the Seahawks collectively just lost something north of $3 million—likely far, far more—because their coach, Pete Carroll, blew the game with a shockingly inexplicable play call.
Use this one sentence to prove your worth, says SalaryTutor.com's Jim Hopkinson.
This is the sixth in a series of six posts on salary negotiation published in partnership with PayScale.com.
If you’ve ever been told, “We’re sorry, we really liked you and it was a very difficult decision, but we ended up going with a slightly more qualified candidate,” you know that it’s not a great feeling. You can drive yourself crazy wondering, “What did the winning job-seeker say or do to gain that slight edge over me to land the job?”
Or perhaps you did manage to beat out every other candidate and receive an offer, but weren’t able to negotiate the salary that you wanted. What could you have said to earn what you truly deserve?
Fortunately, there’s a simple framework and phrase to keep in mind that might give you the extra edge you need. Not only will you distinguish yourself from the competition when looking for a job, but you’ll also be able to negotiate a higher salary when you get the offer or ask for a raise.
In fact, I just demonstrated it in the last paragraph!
The framework is: Not only this… but that…
If you were to write it out as a formula, it might look like this:
“Not only do I have [all the standard requirements that everyone else has] + but I also possess [the following unique traits that make me a better candidate and worth more money].”
Let’s look at a few examples…
In some cases, you don’t even need an extra skill, you just have to show up. If you sense that a company is in a massive rush and has had a difficult time filling a position, or others are giving them the run around in terms of start dates, you might simply say, “Not only do I have the skills necessary for this job, but since I won’t require any training, I can hit the ground running, make an immediate impact, and start tomorrow.”
To be most effective, however, you’re going to want to cultivate and mention unique, valuable, and complementary skills.
So if you know that the company you’re working for is looking to expand internationally, and they offer you a starting salary of $70,000, you might reply, “I appreciate that generous offer. However, since I’ll be coming into this position not only with proven marketing and team-building skills, but also as a multi-lingual manager with experience building out teams internationally, I was seeking a salary closer to the $80,000 range.” If the hiring manager knows that this will be an asset in the future, or saves the time and cost to train a similar manager in language skills, you’re likely to get that additional salary.
I once worked with a client that received a five figure increase from a single email exchange. The position was at a prestigious art museum and there was a lot of competition for the job. At this level, every candidate was extremely well educated, had extensive experience working in museums, and a passion for the arts.
During her interview, she had noted that the executive director was charged with building out something new and exciting. Not only did she land the offer, but she used that language to bump her salary $11,000 by saying, “Since I will be bringing not only curation and management skills from the art world, but also have the experience you desire in building a new program from the ground up, I am seeking a salary that would reflect those additional skills.”
One area you certainly don’t want to stand out in, however, is a lower price.
While it might feel good to finally land a job by saying, “Not only can I do the necessary work, but I’m willing to take a salary $10,000 less than anyone else,” that feeling will be fleeting. Yes, you got the job, but in doing so you completely devalued your worth and won’t be happy for long.
So take a few minutes to really highlight what makes you unique…
Maybe you’re an accountant not only with CPA and Excel expertise, but you’re also a specialist in finances for companies with 10,000 employees or more.
Perhaps you’re a social media marketing manager that has run campaigns on Twitter and Facebook, but also has a deep understanding of the reports, analytics, and data science behind your posts.
Or let’s say you’re a project manager that people love working for and you always bring in your projects on time and under budget, but you also have a history of launching mobile apps and getting them to trend in the app store.
The key is to find something that your employer needs—and is willing to pay extra for—and then utilize it during a negotiation to distinguish yourself from others and get paid what you deserve.
Jim Hopkinson is the author of the book Salary Tutor: Learn The Salary Negotiation Secrets No One Ever Taught You. His website, SalaryTutor.com, offers a series online salary negotiation courses to help students and professionals effectively negotiate a raise or new job offer.
More from this series on Money.com:
- The 10 Commandments of Salary Negotiation
- How to Tell If Now Is a Good Time to Ask for a Raise
- The Best Answer to the Question, “What Are Your Salary Requirements?”
- The Ultimate Millennial’s Guide to Negotiating Salary
- The Single Best Thing Women Can Do to Bust through the Glass Ceiling
More on salary negotiation from PayScale.com:
Your boss's decision to grant—or deny—your request could be influenced by a lot more than your performance.
Perhaps you’ve resolved to make 2015 the year that you finally get a big bump up in pay.
If so, you’ll first have to clear the biggest hurdle standing in your way: You.
Less than half of working Americans ever even ask for a raise and close to 30% are uncomfortable negotiating salary, according to a new study by Payscale.
It may help you feel more confident to go after what you want if you know the odds are generally in your favor. Of people who have put themselves out there to request better compensation, three quarters saw their paychecks go up: 44% received the amount they asked for and 31% got an amount that was less than they asked for. (Hey, that’s still something!)
That Payscale study also broke down the likelihood that those who ask shall receive based on annual salary, job, degree level, college major and state of residency.
You’ll have the best shot if you…
Once again, it’s good to be rich. The higher your annual salary, the more likely you are to have asked for a raise and the more likely you are to have received the raise you requested.
Individuals earning $150,000 or more a year were the most likely to see their employer match the exact raise they requested, with a 70% success rate. Only 8% of these high-earners saw their request for a raise go unfulfilled.
Meanwhile, only 25% of those earning between $10,000 and $20,000 saw their incomes increase by the amount they asked for, while 51% had their request for a pay raise denied entirely.
Somewhere in the middle? The good news is that if your annual income tops $70,000, you have at least a 50% chance of getting the pay raise you request.
Unsurprisingly, those who work in higher-paying jobs also have a better shot at having their compensation wishes granted.
Chief executives were 76% successful in getting the exact pay raises they wanted. First-line supervisors in the construction trades had their requests granted 62% of the time. Other high-wager earners such as financial analysts and electrical engineers rounded out the top five professions most likely to receive a requested raise.
Those with jobs that commanded lower annual salaries tended to have their requests for raises denied more frequently. Nursing aides and orderlies have the worst chance of getting the raise they want followed by security guards and cashiers. Below are the top five and bottom five occupations for getting a wage increase.
While the level of education a person has obtained didn’t have much impact on their willingness to ask for a raise, it did affect the likelihood that their wish would be granted.
Those with post-graduate degrees were most likely to be successful in their requests, though success rates were highest for those with an M.B.A. (55%) and a law degree (59%).
Go figure that attorneys are good at negotiation.
Surprisingly, English language and/or English literature majors were the most likely to have asked for a raise (51%)—call it their way with words. Their requests paid off 49% of the time.
Those who studied public administration and social services were the most lucky in terms of receiving, getting what they wanted 56% of the time
Those whose college majors tended to land them jobs in the public sector, such as homeland security, law enforcement, firefighting and other protective services were least likely to have asked for a raise—perhaps because these jobs typically have set pay structures. Workers who came from these majors who did ask were only met with a yes 18% of the time, giving them the lowest success rate.
Alaska residents are the most likely to push for a raise, with 53% of the population having requested one (and they’ll need it to offset those heating bills). Residents of Rhode Island come in second with 51%, followed by Oregonians and West Virginians, with 48%. Dwellers of Massachusetts, Oklahoma, and Idaho tied for fifth with 47% advocating for a raise.
South Dakotans were least likely to ask for a pay increase, (31%), followed by residents of Arkansas (34%), Nevada (37%) and Nebraska (37%).
Alaskans’ assertiveness pays off, apparently, as they are also the state residents most likely to receive the pay increase requested. Delawareans were the least successful in their requests with only 32% getting the amount they were after. Below are the top six and worst six states for getting a raise request approved:
More from this series on Money.com:
Trick your brain and your wallet will follow.
We all know you can get in financial trouble by pretending to have more money than you actually do — and most of us know that you can’t make an educated guess at someone’s salary by checking out the car they drive. So you can appear to be wealthy even if you’re not. But can you get ahead by telling yourself (and intimating to others) that your paycheck is smaller than it actually is? There are some pretty compelling reasons to do it, and you could find yourself in a far better position than if your paycheck just barely covers expenses.
Here are some reasons to consider pretending your paycheck is just a bit smaller than it really is.
1. Sock Away Money in an Emergency Fund
If you don’t have an emergency fund (or even if you do), you can pretty much count on having an emergency. Car transmissions break, you need to travel unexpectedly or someone in your family ends up needing help. Experts recommend six to 12 months’ worth of expenses in your emergency fund. If you don’t yet have that, you may want to make sure you have access to credit. (You can check your free credit report summary on Credit.com to get an idea of how you would be judged by potential lenders.) But having the money saved is a better alternative.
2. Pay Down Debt Faster
If you pretend you make, say, 10% less than you actually do, you can probably cut expenses to accommodate the reduced pay. But the money you will save isn’t pretend — and you can send it to your creditors, reducing or eliminating debt much more quickly. This little fib helps keep your spending in check, which will free you to direct the money someplace else, making some other dream a reality more quickly. You can even figure out a timeline for getting out of credit card debt with this nifty calculator.
3. Save for a Down Payment or Your Kid’s College
Whether you’re looking to buy a house, educate a child or take a trip around the world, your dream is likely to require a significant chunk of change. And one way to get that is to pretend that earmarked money does not even exist. You can have it transferred into a designated account the same day you get paid so that you are not tempted to use it for the heavily discounted camping equipment that you know about because the advertisement for it popped up in your inbox. (Another money-saving hint: Most of us will spend less if we unsubscribe.)
4. Put More Money in Retirement Savings
Retirement seems a long way off when you are in your 20s, and it is. But most people’s expenses grow with time (particularly if you choose to raise children). It is not going to suddenly become easier to save more, at least not until you have far less time to do it, and the money has less time to grow. How many people have you heard complaining that they wished they hadn’t saved so much for retirement?
5. Friends Won’t Pressure You to Splurge
We’re not suggesting you do away with little luxuries altogether. You and a friend want to go get manicures? Go for it (sometimes). But think about whether all of your get-togethers need to involve a meal out, shopping or manicures. Maybe they made a resolution to move more. Walks can do double duty to help get your body and finances in better shape. And if your friends know you are on a beer budget, chances are they won’t assume you have a champagne salary.
6. Friends & Family Won’t Consider You a Human ATM
Do you often or always pick up the tab for groups because you can afford it? If you say, “my treat” too often, it’s possible you’re sending a signal that because you have more, you have an obligation to share it with your friends and family. You may feel that way as well, and if you do, you would be especially wise to pretend you have a little less money than you actually do. If you do choose to give or lend money to friends and relatives, make sure everyone is clear on what is a gift and what is a loan. Money misunderstandings have the potential to damage relationships.
7. Your Income Could Drop
It’s easy — and tempting — to think your salary will be on an upward trajectory from your first day of work until your last. (Don’t the retirement calculators assume that?) And who plans for a furlough or the loss of a big client? During hard times, it’s not unheard-of for companies to levy across-the-board salary cuts. And if you’re acting as if you make every dime that you actually do, it will be harder to adjust than if you’ve been acting as if you made less.
More from Credit.com
- How to Get Your Free Annual Credit Reports
- How to Read Your Paycheck: A Quick Guide
- 5 Easy Steps to Get Control of Your Money
This article originally appeared on Credit.com.
The answer depends not just on how much you've accomplished in the past year, but on the budget calendar at your office and on the economic health of your company.
This is the second in a series of six posts on salary negotiation published in partnership with PayScale.com.
As with so many things in life—relationships, comedy, investing in the stock market—getting a raise can depend on good timing.
If you’ve done your salary research, know what you’re worth in the job market and have determined a pay increase is warranted, you’re far more likely to get it if you think strategically about when to have the raise conversation with your boss.
Here are just a few things to think about before you mark a date on your calendar:
Synching Up with Your Company’s Performance Review Schedule
If your company has a regular performance review schedule, try to have a conversation about your compensation a couple months in advance so that your boss has time to make a case and advocate for budget ahead of that process.
If you wait until the performance review process is underway, often the decisions about salary increases have already been made by the management team. It doesn’t mean that an exception won’t be made, but the easier you make it for your manager, the smoother the whole negotiation process will go.
Taking the Internal Temperature at Your Company
Even if the data shows that you’re making less than you should be, that might not be enough to convince your employer to increase your pay if the company at large isn’t faring well. The best time to ask for a raise is when revenue is on the rise, after a major financial win (especially one you helped with) or when the company is generally in a strong position.
If you’ve just had a round of layoffs, a raise conversation is unlikely to go in your favor. If you believe in the company, you may want to stick it out. But, if the death bell is tolling for your employer, looking elsewhere might be the best bet for improving your own financial wellbeing.
Staying on Top of Industry Trends
Taking a broader look at your industry and understanding the external forces that may be impacting it may help with timing your raise discussion, and will also help you make good, strategic decisions about your career overall.
When the Internet started becoming more of a content destination, those journalists who saw the writing on the wall and made the move from print to online early on are certainly patting themselves on the back. It pays to understand if you’re in a thriving or dying industry and whether the lean times are temporary (e.g. real estate) or lasting.
If you deserve a raise, you should ask for one, but good timing can mean the difference between a small bump and a significant jump.
Lydia Frank is the editorial and marketing director for PayScale.com.
More from this series on Money.com:
- The 10 Commandments of Salary Negotiation
- New Study Reveals the Odds that You’ll Get a Raise if You Ask for One
More on salary negotiation from PayScale.com: