How to Ask for a Raise: Retraining Your Mind

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When I last posted about how to ask for a raise, I put some tough concepts out there. Some concepts that probably are offensive to a lot of people who work hard and just want to make a little more money. So I felt compelled to explain a little further some of the concepts on the business side, so that you can understand where your employer is coming from. It has been said of war, “know thy enemy”. The same is true in working any business relationship. It isn’t a war/hate relationship, but if you know what your employer is thinking, then you can structure your approach to cater to that line of thinking.

Why Businesses Pay Low

Businesses don’t like to pay their employees for several different reasons. The first is that they only make a certain amount of money, so if they pay their employees more, then they get to keep less. When looking at it from your side, you continue to work harder, getting more done for the company, and therefore expect to get a raise. Another reason companies don’t want to give raises is the fact that if they give you a raise, you might tell others, and then they could have many employees wanting to get the same raise. You might not ever tell anyone, but the employer can’t bank on that. On the same note, if the employer gives in to your request for a raise, they might think you will just come back in a few months and ask for another raise.

Understanding the Need for the Company to Get a Return on Investment

Just like you investing in the stock market, your employer is looking for a return on investment. That is true of its employees as well. The company needs to make money from the work that you do. If you are not generating more money than they are paying you, you are in the danger zone. Think about this simple example:

If you run an ice cream truck, and you are making enough sales to run a second ice cream truck, and you hire someone else to run the other truck, will you pay them more than they are generating in profits? Absolutely not. You aren’t going to lose money on running the second truck, it would be better just to run one truck than to lose money running a second truck. Simple business principle.

The same is true of a company that employs you. They must get a return on your work, otherwise it is better for them not to have you on staff.

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How to Ask for a Raise

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Yes, you have been working for a while at your current job. Yes, you have been working hard. Yes, you have made some definite positive changes for the company. Now it is time for you to make some more money. But the question is, why won’t the boss give it to me? The answer is simple, they are already getting great work out of you, why should they pay you more? Also, if they pay you more, then that means they will make less in profit. I know when you read this that you are thinking your employer either doesn’t think this way, or if they do that it is very evil, but at the end of the day, it’s just business.

All businesses are in it for the money. They all want to sell as much of their product or service as possible, while spending as little as possible in materials, labor, intellectual property, etc. So, how to ask for a raise? Well let me give you a few pointers to motivate your employer to upping your dollars:

  1. Understand that the company is in business to make money, not to pay you.
    This is critical to having the right approach when you walk into the boss’ office.
  2. Schedule a time with your boss to discuss your compensation.
    I know this seems like a ‘duh’ thing, but really, how long have you wanted a raise, but not done anything to push the matter? You can’t receive anything, if you don’t ask for it. Being proactive will get you a lot further, a lot faster.
  3. Make sure to stay very professional, and keep a low tone of voice when speaking to your boss.
    Facts are a lot more important than opinions. If you can show your boss evidence of being underpaid, and not be offensive when presenting your case, you are much more likely to obtain the raise you are wanting.
  4. Instead of protesting how hard you’ve worked, how you are always on time, and very reliable while at work, focus on the benefits the company receives by employing you.
    Explain to the boss how you have helped to increase sales, or how you have worked to lower the company’s costs in particular areas. If you are in customer service, explain how you have worked to appease your customers, and note any repeat business the company has received from those customers. If you are in administration or a technical area, explain how much time you were able to save other employees by the systems you have put into place. If you have saved those employees a lot of time, they are able to do more, and the company will not have to hire additional people, i.e. you are saving the company money.
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Career Advice - Interviewing Part 2

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If you read my last post on Career Advice - Interviewing, than hopefully you have gotten some good tips to mastering the entry level interview. Today I am going to be going into some interviewing tips when you have experience, and are looking to up your dollars. Now, this information assumes that you already have a job, and you are looking to move up in the private or corporate world. If you are fresh out of college, or have minimal experience, check the link above for good interviewing tips targeted for you. Alright, so you have won an interview with a company that is hiring for an upper level position that is in your field. Now what?

Body Language and Attitude

How you pose and conduct yourself during the first few minutes of the interview sets the tone, and possibly the decision to hire you or not. You want to have a careless attitude about you. Not an attitude that you don’t care about the job or working hard, but an attitude of not caring if you get the job or not. Be slightly reluctant when answering questions like “When would you be able to start?” and “What do you think about our company?”, etc. You want to give the impression that you are only looking for the best fit for you and the new company you choose to work for, not just for more money. When I was in this position, I asked them questions about the company, and what they were looking to accomplish by hiring me, etc. I was extremely calm in the interview, and did not really promote myself. In fact, I didn’t even have all of the qualifications that they wanted for the job. I was honest, and told them simply that I knew the theory behind the systems they were using, but did not have experience in those particular systems. This brings up my next point…

Be Honest

Don’t hype yourself up with nothing to back it up, it isn’t necessary nor will it be taken well by the interviewer(s). Typically, these are going to be your new managers, and they have a good idea of how to spot a phony. Keep in mind, you already have a job that pays fair to well, and you do not need this job. You are in the power position. When I was looking to move up, I simply told them I was looking for a good fit for them, as well as for myself. They knew that I was looking for more money (it isn’t that hard to figure out).

Ask Many Questions

You need to get a good feel for what the job environment is at the new company. You need to have a comfort level with the new managers, your daily tasks, expectations for overtime, office facilities, everything. The point is, find out as much as you can. You need to know if it really will be a good fit for you, as well as for them. Also, when you ask questions, you put the focus on them, and put yourself in the driver’s seat. This can also be some great fuel for your negotiations. If it is a longer drive, more crowded parking, worse office conditions, etc. than you have good ammunition to use to drive your dollars up.

Negotiating for the New Position

This is my favorite part. If possible, get them to offer something to you first. This is one of the most power tools in negotiating any deal. Regardless of the number you had in mind, their first number may be more than you were expecting. In my deal, they wanted to know what I wanted before they made the offer. In this case, you want to provide a range. I told them I was looking for something in the low to mid 50’s. Always provide a first number that is higher than what you actually want, and never provide an exact number, because you won’t get it (in most cases, anyway). So when they made me the offer, of course, it was $50,000. Another important point here, never take the first offer. So I told them I really wanted more (fishing to see if they would go up without a counter offer), they didn’t, so I countered at $52,000, and we settled at $51,000. Now, I probably could have gotten more, but I did want the job, and it was still almost a 30% raise from the previous job.

Again, be reluctant when negotiating, and use the ammunition you collected in the interview to justify your proposed higher wage. If you can, don’t wrap up the negotiations all in one day. Come up with an excuse to talk to them the next day. Don’t lie to them, but maybe say something like, “I need to talk to my wife about this before we make a decision.” or “I need to pray/think about this and let you know.” All these bring a sense of loss to the other side. You may be able to squeeze some extra dollars out of them with this technique, and to be honest, you should take some time before you make a final decision.

So good luck, and let me know how it goes by leaving comments at the bottom of the page. Also, sign up for my RSS feed to get automatic updates to all the new information that becomes available on this personal finance blog.


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Career Advice - Interviewing

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Everyone wants to find that dream job. We get so discouraged when we look, and look, and look for an opening, only to be turned after the interview. Well I have had successful interviews in my job days, and ultimately I know what employers are really looking for. This is going to be a two part series, with today’s lesson being solely for the unexperienced professional. If you are just out of college, or have not had an entry level position, then this is for you. Tomorrow, I will give tips and career advice in interviewing for the experienced professional, and how to negotiate up your dollar amounts. But there are some basics that apply to both categories outlined.

Interviewing Anxiety and Eagerness

This is the most important DON’T of interviewing. Employers are looking for people that want to work, but they are suspicious when someone is overly anxious. When you show a lot of nervousness, you tend to either talk too slow or too fast, your thoughts are not orderly, and you can end up making a fool of yourself. This is an easy way for the potential employer to scratch your name off the list. Be relaxed, take deep breaths, try to think about other things that are relaxing before you are called in for the interview.

Another tip from personal experience, it is good to show up early, but you need to preoccupy yourself before you go in to the interview. Think about when you were a child and in trouble with your parents, but you had to wait until Dad got home before the punishment would take place. The waiting often is much worse than the punishment. Same applies when waiting to be called in for an interview. So take something to read, or a crossword puzzle, or something to keep your mind from stressing over the upcoming interview. Bottom line, if you are relaxed, yet professional, you will stand out over your competitors.

Credentials

If you have made it to the interview, chances are likely that you have passed the employer’s minimal educational and experience requirements for the job. Don’t waste a lot of time talking about your credentials. Remember this about people, they care about themselves, not you. The interviewer is focused on the benefits you will bring to the company, not how many pretty degrees you hold. So focus on the benefits you will be providing, for example, working hard to improve the production of the company, instead of saying that you are a hard worker. Or, saying that you can provide new creativity to help boost sales or drive down costs of the organization, instead of saying that you had a 4.0 average in college. Hopefully you see how this sets the focus on what you can do for the company, not how awesome you are. Be creative, leverage your attributes into something the interviewer can use to push their business to the next level.

Interviewing Attire

This one isn’t too hard. Dress professionally. For guys, a shirt and tie is usually sufficient, for women, a business suit is probably the best idea. I will give you one tip here that may be of use - try not to look too polished. If you are a guy, loosen your tie just a bit before going into the interview, if you are a woman maybe leave a button undone on your suit coat (I am not saying to show anything off here). What I am saying, is that you should look professional, but if there is one or two things that are not quite perfect with your attire, you might send the signal of a hard worker, which is good.

Putting it All Together for the Interview

Utilizing the steps above, if you stay relaxed, keep the conversion light but on topic, focus on the benefits that you will provide to the company, and are dressed professional but with a feeling of a strong work ethic, you will poise yourself for the best possible chance of winning that job. Remember, employer’s don’t hire resumes, they hire people that will benefit their company. The resume just gets you in the door. All of these tips I have given you will help you to connect with the employer, and build a relationship. Bottom line, the person that the company is the most comfortable with, is the one that will get the job. They need to like you, and believe that you will provide the most value to the company.

Check out Part 2 of Career Advice - Interviewing


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