In most companies, most decently run companies anyways, it’s usual to have a yearly performance review where the compensation is adjusted.
Asking for a raise
Getting a raise is the most common way to increase the income from your day job. It’s usually the easiest as it does not involve looking for a new job, you also usually have a good insight about the company and the opportunities.
Before asking for a raise, you must be prepared. Keep in mind that it is not about what you think you deserve, but about building logically the evidence:
- Compile what you came in to do, it is usually in your job description and compare that to what you are doing day to day. Look everywhere where you took on additional responsibilities beyond the scope of your role.
- Look what the industry is usually paying for a position similar to yours. Popular websites such as payscale.com, salary.com or glassdoor.com can give good analysis for your position based on the number of years of experiences, the job, the state and so on. It is always good to regularly check what the market is paying for the job you provide and if you notice that your pay is well below the market, you’ll want to have a productive discussion with your manager to try to find out what it is possible to get.
- You should be able to name a number, based on your analysis. Keep realistic expectations for the role: if you’re already paid well above the median compensation for your role (taking into account new responsibilities), it will be hard to justify a raise.
- Try to assess how much value you are bringing to the company as you cannot be paid more than what you make the company earn.
- If you’re lucky enough to have job where you can be compensated with equity, via RSUs (Restricted Stock Unit), SARs (Stock Appreciation Rights) or stock options, try to optimize for equity compensation over salary. Especially if you believe in the company you work for. After all you probably chose to work for such company for a reason. Because the equity can grow exponentially over time, particularly if the company is doing well, while the salary only put a floor as to how much you earn while employed, but there’s only limited upside.
When to ask for a raise?
Asking before the often traditional annual performance review is usually a good time.
After accomplishing a major milestone you played a significant role in is also a good time to ask for a raise.
Avoid asking for a raise when the company or your management is under pressure or when the company has financial troubles. It will be very unlikely under these circumstances.
How to ask for a raise?
Be confident, be enthusiastic, be clear and go through your analysis logically.
If your request is denied, stay positive and ask what would merit a raise, so you can better prepare your case for the next time around.
Looking for another job
Now if the company you’re working for is not willing or able to compensate you at the level you think is right, it’s probably time to look around for a another job.
There may be several reasons to look for another job from looking for a different work culture, to the company going under, or looking for a career change.
However a good rule of thumb coined by former engineer and venture capital investor Garry Tan: Learn, Earn or Quit! Which in essence says that you want to stay at your current job as long as you learn and/or earn. But if you don’t, it’s probably time to quit.
If you’re looking for opportunities keep an eye on positions inside your company, especially in bigger companies where there can be a significant upside between different departments. You’ll generally have an edge as you know the company.
If you’re employed, be discreet when looking for another job, avoid advertising it publicly as it may be sent to your current employer. Only use your personal device, never your employer’s device when looking for a job. On social media, such as linkedin.com, favor personal messages.
If you’re serious about going for a change, make time for the search.
As you’re getting information for new positions, try to understand the role for the new jobs you’re looking at so you can make an educated guess regarding the opportunity and the potential growth in the new role. Also if there are things you found you particularly dislike about your current job, try to find more information as to not end up in a similar place.
Circling back about getting a raise and if it was the main reason you looked for another job, if you’re valuable to your company and you have a competitive offer, it will more often than not open a compensation discussion quickly as it’s often cheaper for the employer to match or raise the offer, rather than trying to find somebody else to hire and train.
Finally if you have the choice between several offers, favor companies that have a liquid equity compensation. Equity compensation at early startups probably deserve their own post.
How often should one change jobs
If the growth and opportunities for a higher pay are limited at your current job, changing job can be the right move. It is often recommended to stay at least 2-3 years at a company as changing jobs too often may be a red flags to many employers.