How to Ask For a Pay Rise
Have you noticed your paycheck disappearing more quickly between rent, the grocery store and the bowser? If you answered yes – you are not the only one. One way you can help yourself is to ask your boss for a pay rise so the essentials don’t sting so much. Listen in for some great advice on how to ask:
The Importance of Primary Income
On this podcast we often discuss investment strategies and opportunities, but before we even get there, we need money to get us started. No matter what your occupation may be, everyone is always open to being paid more for what they do. Our income is what goes towards our spending, our excess for investing as well as our superannuation, so it should always be high on your list of priorities. As a previous employee at the start of his career, Host Andrew Baxter breaks down why it is important to establish a solid foundation of income in order to grow into other spaces. While we all want multiple income streams, the first order of business is maximising your returns from your day-to-day work.
Asking for a Pay Rise – Why Now?
We all know that the cost of living is rising, but from an employer’s perspective that is not enough to justify a pay rise. The current labour market is competitive, and Host Andrew Baxter explains the importance of understanding what your leverage is when bringing this discussion to your boss. A couple of decades ago if you had asked your boss for a pay rise, they would have encouraged you to look for another job. Nowadays, good employees are hard to come by and keeping them on board is a priority for employers. Before entering the performance review with your boss just think to yourself – what is my value to this business in the grand scheme of things?
Non-Revenue Producing Roles
Most businesses have areas which are not directly responsible for revenue. To name a few, administrative staff as well as those working in the accounts space are not always directly responsible for bringing in money for the business. As a business owner and employer himself, host Andrew Baxter points out some of the actions you can take to give yourself some leverage to request a pay rise. Taking initiative is a universally attractive quality for employers, and if you, as a non-revenue producing member of staff are able to find ways to help other divisions of a business create revenue, then you can argue that you do in fact deserve some returns for your effort.
In other roles where you are paid for what you bring in, the answer is simple – work harder, but in those critical support roles you just need to think laterally to find other ways to help out the bottom line.
Saving Money vs Making Money
Making more money for a business can be difficult and occasionally impossible within the scope of your role. With the right tools, we can empower our business to save money wherever there are wasteful expenses. Host Andrew Baxter recounts a situation from a previous job in which an administrative worker was able to leverage their ability to save the business money and turn that into a yearly bonus. Saving money for a business may not sound as attractive as making more money for a business, but your boss will definitely see the appeal.
Becoming a Stakeholder
Host Andrew Baxter has worked many jobs in his lifetime and has learned a lot about managing a business from his previous employers. In this episode, he recalls how his old boss would invent ways to motivate his staff to become stakeholders and develop a sense of ownership over their work for the business. For you as the employee, if you are looking to earn some extra money from your job but your boss isn’t budging on the number itself, there are alternative structures you can propose to build yourself into someone who benefits when the business is going well – a stakeholder. Proposing a specific bonus structure is a great way to incentivise yourself to work harder as your boss dangles a proverbial carrot in front of you.
Preparing for ‘No’
Before having the pay rise conversation, you need to come to terms with the possibility of your boss saying no. Sometimes, the best option may be the easiest in that it might be time to look elsewhere if you are not willing to continue with your work for what you are earning. But our co-hosts Andrew and Mitch discuss how most reasonable bosses will be willing to consider the request if you are able to raise strong points. Preparing your ammunition beforehand is essential for delivering an effective plea. All in all, it is never an easy conversation to have, but one that is essential for your professional and personal development as you move through your journey to financial freedom.