Looking for a raise? Most people think they have to ask for a raise from their boss, but for millions of Americans, you're not asking your boss, but more than likely, the owner of the company.
Based on U.S. Census Bureau data from 2011, 99.7% of businesses have fewer than 500 workers, and 89.8% have fewer than 20 employees.
If you think this is the same as working for a large company, you're wrong. When you work for a large company, your boss is interested in getting promoted. They are looking for employees that are helping them reach that goal.
When you work for the owner, he/she is looking for an employee that is going to grow the firm.
As with any negotiation, you have to understand how the 'other side' thinks and feels. In this case, it's the owner of the company. Consider these items:
Why did they hire you in the first place? Has that need changed or evolved?
Who have they hired since you joined? Are those people in similar roles as you? Is your role still relevant?
What are their biggest obstacles to growth? Are you involved with solving any of those obstacles?
Do you speak to any of your customers? Do you have a solid understanding of why customers do business with your firm?
With that understanding in mind, here's some easy talking points when asking for a raise:
1) Your value to the firm
If you're asking for a raise, this should be simple. How do you contribute to the bottom line? Do you perform tasks that no one else can do? Do you help others do their job better?
2) You can manage yourself
Give your boss what s/he really wants-more time! Cash is king in any business but time is a close second. A small business owner never has enough time. Giving your boss more time (because you need less management) is the greatest gift you can give.
How do you prove you need less management? Explain that you don't have to be told twice to do something. You're a note-taker and list-writer. You also anticipate your next tasks.
3) Your new responsibilities
Hopefully you're gotten real good at doing whatever you were hired for, and since then, you've taken on a few more responsibilities. The owner is busy, and may have forgotten all that you do, so it's OK to remind her.
4) Your understanding of the company, its products, services, and customers
The number one complaint I hear from small business owners is that they have no one to talk too. You'd be amazed at how many employees really don't know why their company is in business. When there is a disconnect, the owner often feels isolated and alone.
Explain that you're the person they can go to when discussing a new service, or how to handle a difficult client. The owner will love you for it.
What Not to Do
As with anything, there are some tried and true methods employees use for a raise that simply do not work. Here's some of the top ones:
1) It's time for a raise! (It's been a year since my last one!)
Owners generally tend to think like their customers. They can only increase the rate they charge when there is more value to be had. If you're the same you were last year and doing the exact same thing, there is no perceived new value.
2) Someone with my number of years of experience should be making more
We are a mobile work force. There's a good chance that if you have 15 years' experience it wasn't with your current employer. So many times though people count all of the accomplishments at their previous job and expect to be reimbursed for those accomplishments at their current job. It doesn't work that way. Employers want to reward you for what you did for them, not someone else.
3) Someone else in the company is making more, and you've been there longer
Your pay is not based on longevity, but the value you bring to the company. If you want to make more, figure out what the higher paid employees are doing and start doing that.
The Bottom Line
In all cases, remember that asking for a raise can be nerve racking for all involved. Don't stomp into your boss' office Friday afternoon at 4:30 and demand a raise. Let them know you want to discuss compensation, set a date with them when they have time to dedicate to the conversation. Don't expect an answer right away. Give your boss a couple of days to think it over after you meet.
Don't forget, if you really are worth more, and your current employer doesn’t agree, sometimes the easiest way to a raise is to find a new job!
Originally published Feb 10, 2015 11:00:00 AM, updated July 28 2017