Asking for a payrise

Crown Money, where we show you how to pay your home loan off in up to half the time of a normal bank loan. Welcome to the Crown Money podcast. I'm Jessie Edge and I'm joined by finance guru Chelsea Burton. How you going? Good. Good. Today we're going to talk about an awesome subject. We love this one. It's about asking for a pay ris. Important? Yeah, absolutely. And why is it important to actually be asking for a pay rise, Chelsea?

Well, particularly if you work in a smaller business, employers won't necessarily offer pay rises. It's not because they don't want to or, you know, they're being rude. It's just because it's not something that they think about. So if you think that you're deserving of a pay rise, you need to ask for one.

Absolutely, yeah. And there's, there's no shame in asking either. Like, it's, it's definitely, it's a part of the process and, and your manager will respect you for coming to them and talking to them about it properly. And that's what we want to talk about today, how to approach it properly, how to put your business case forward and to give you the best chance of actually getting a pay rise. So a couple of things we always recommend. Two questions. I always say to people, ask yourself, am I deserving of a pay rise? And is this the right time economically to ask for a pay rise? Let's talk about that one, Chels. What would make you deserving of a pay rise?

So quite often you'll find that after you've been with a company for a year or two, the jobs that you were originally employed to do and the job that you're now doing are both very different. And usually that's because you've gotten efficient at the job that you started off doing, so you've added new jobs to the role. And also in small businesses, there's not a whole heap of people, all of who have their own specific job. It's more, you know, all hands on deck and getting involved in doing everything.

Yep. You get a new thing to do every day sometimes. Exactly.

So you'll find that your. Your responsibilities list is far longer than it was when you started. So.

But you may not have followed suit.

Absolutely. So it's important to have a look at, okay, what was I doing when I started? What am I doing now? And am I creating more value to the business? And does that mean that I deserve a pay rise?

Yeah, absolutely. And then the second question is, is this the right time economically to Ask for a pay rise. So, you know, what are some factors that will influence whether a business can actually afford a pay rise right now?

So there's a few different things. Obviously, are you creating more income for the business or are you saving money for the business? So as a result of your being there, is the business more profitable? And that's one really important factor to whether or not the business can afford to give you a pay rise.

Yeah. And it's also about how the business itself is going in general.

Absolutely.

Is it a particularly tough time? Is there a global pandemic, for example?

Well, exactly. I mean, now might not be quite the right time to be asking for pay rise.

You've got to think about where your business is to sitting in the grand scheme of things. And are they spending a lot of money on other things like marketing, et cetera, to try and develop the business and grow the business. Therefore, there's not as much money to be going towards salaries or are they in a really great growth period? Everything's going really well. Everything's looking really positive. That's a really, really great time to be asking for a pay rise. So a little bit of sensitivity in that aspect, I think is important. Absolutely.

And it can be a little bit difficult, particularly if you're an administrator, to know whether or not that's something that the business is having at the moment. Is the business growing and you can probably tell by how busy you are.

Yes.

If you're more busy than you were, the business is probably doing okay.

Yeah, yeah. If the directors are pulling their hair out, it may not be a good time.

Exactly. And also, you'll find, you know, in small businesses, people like to, the directors like to make the staff feel like they're valued when the business is doing really well. So are you going out for more lunches? Are you getting from your boss? Like, like all that sort of thing.

And I think in larger organizations, quite often they have more of a structured, you know, pay rise process. And so just making sure you're in tune with that and understanding what the pay increase cycles are, you know, when, when is, you know, is it a half yearly review or at your annual review that you're most likely to get a pay rise and just making sure you're putting your best foot forward at that time.

Exactly.

I think you, you know, the other thing I just want to jump back a step as well about, you know, am I deserving of a pay rise? It's also about, you know, you know, what are your, I mean, what are some other Suggestions? Suggestions. Chelsea, do you think in terms of that, what would make somebody deserving of a pay rise?

Sure. So as I said, obviously having a larger job and creating more benefit to the business. Have you found ways of saving the business money? I mean, you may have found a new stationary supplier or found a new way of stocking product that makes it more efficient and makes the business run more smoothly.

Absolutely. Or saved a client from leaving something along those lines, you know, your customer service, your attention to detail, those sort of things, you know, really do help a business. And that's something that if you can keep track of, you know, and show that, yep, this is what I've contributed and this is what I've done, it will go a long way for sure.

There are some really basic things too, like are you now supervising staff when you weren't before?

Yeah.

And also, you know, interpersonal relationships. Hiring staff is expensive and it's expensive to train them and it's expensive to keep them. And if you've been able to manage or supervise or assist a business in maintaining staff, that's a great big win for them too.

Yeah, absolutely. It's a really, really good one. I think as well, you know, your work ethic and your attitude when you're at work. Like, are you. It's very, it's a bit cliche, but do you have a can do attitude? Are you always, like, if you're always getting in exactly in your start time and leaving exactly on your end time, things like that, and not showing initiative or, you know, that extra little bit of kind of effort when you're at the office, that's probably not going to be looked upon very positively.

That's right. If you're a bare minimum kind of guy or kind of girl, that's not going to inspire people to give you high rises.

I think also a bit of personal presentation.

Absolutely, yes. You got to dress for the position you want, not for the position that you have. And that's really important. Yeah. People respect those who dress above what they currently have.

Yeah, absolutely. Your image is your brand. Personalization is very important.

Absolutely.

So we've established that it's a good time economically to ask for a pay rise and that you are deserving of a pay rise. So let's talk about how do we actually go through the process of asking for a pay rise? I think step one is definitely always to gather your numbers. So any sort of information that you can get together and really invest time in this part, like really work out exactly what you've contributed, try to monetize it or quantify it in some way or some sense. Keep a record of all your big wins over the last six months. And really, you want to put a kind of a bit of a business case together and say, this is why I'm worth being paid more.

That's right. You want to write a list of all of the jobs that you had when you started, all of the jobs that you have now, quantify why those are more valuable to the business. Yeah, definitely. And then plan how you're going to present that to your boss.

Yeah, absolutely. And so the next step is to arrange a meeting with your boss. I think it's really important to let them know that you're going to want to discuss your pay. Don't just spring on them in the meeting. Just definitely say, hey, look, I want to book in a time. I would really like to discuss, discuss my current pay and, you know, what the potential there is for a pay rise. And that gives them time to do their research, to come prepared and, you know, they're going to be, you know, much more receptive to it if you haven't kind of sprung it on them.

Absolutely, yes. Last thing bosses like is to have things like that sprung on them and not know how to react or how to respond.

Yeah, yeah. And I think as well, like, always, like, it's a bit of a funny thing, but. Yes. Never book an appointment with your boss on a Monday.

No.

Friday, Mondays, they just don't want to think about it. They're so busy, they've got other things going on. It's going to be the last thing they want to think about. They're not going to be receptive to the idea as well. On Friday, usually they're half at the door by lunchtime or they're probably not thinking about it as professionally as they should be. So I would suggest not a Friday. Wednesday is usually a really great day. Middle of the week, the week settled down a little bit and they're ready to discuss it and be more open to the idea.

Exactly. Probably not first thing in the morning. Everyone's always busier first thing in the morning. Leave it to the afternoon.

At least until after they've had their coffee. Exactly, yeah. I think the other thing as well. Sorry, go ahead.

No, go for it.

I think the other thing as well is, you know, when you're talking to them, you know, have a bit of a personal rapport there, like, build a little bit of that, you know, conversation first instead of jumping straight into it. Remember, they're a person too. They're going to, you know, your relationship with them is important and it will help your case. Always be positive and explain your case in a way that they can clearly understand. And definitely never threaten. That's a big one.

Absolutely.

Never actually say to a boss, well, if you don't give me this pay rise, I'm going to leave, or something like that, because nine out of ten times it won't work. It's going to destroy your relationship with them. And I just don't think that's like the type of employee that you want to be.

No, absolutely. And it's certainly not the type of employee that an employer wants.

Yeah, exactly. It just shows a level of immaturity and unprofessionalism.

Exactly. And I think you need to be really realistic with what you're asking as well. I mean, if you're currently on $50,000 a year and you're going to go in and say, I think I should be paid $100,000 a year, that's not going to happen. Be realistic. What is it that you actually want from this meeting? What is the bare minimum that you'll accept? Go in a little bit higher than that so that you've got a nice fallback position, but don't go in thinking you're going to get or even a 25% increase. You're probably looking at a 5 or 10% increase as an absolute maximum.

Absolutely. And it is a negotiation like, expect them to potentially come back with a counteroffer and they may not even be able to confirm then and there in the meeting. They may need to take it away, discuss it with somebody else, work out the financials and then come back to you with an offer. But it is about an open conversation, staying positive and understanding as well. It may not necessarily just be about dollars like you may, you know, you might want to work out some sort of better working arrangement where, you know, you want half a day off on a Friday or you want every second Tuesday you want to have a two hour lunch break or, you know, whatever it may be. I want to, you know, negotiate a better office or something along those lines.

Absolutely.

Anything that you might find valuable that can be part of the negotiation as well.

Of course, not everything's about money. The work life balance is also a really important attribute and something that you do need to ask for.

Yeah, absolutely. And then. Yeah, I mean, what if they say no, Chelsea?

So I think the first thing that you need to do before you go into your meeting is you need to properly prepare so you need to know what you're going to say to your boss, how you're going to position it, practice what you're going to say, and then think about the sorts of things that they might come back with, what sort of objections might they have, what sort of arguments might they have, and come up with answers to those things. And then if they say no, then you need to be professional about it. You need to say thank you and find out, okay, well, if not now, what do I need to do in order to achieve that in the future?

Absolutely. Because just by asking, you put it on their radar. And if you don't get it now, you're much more likely to get it in the next three to six months because they know that you're looking for it and they'll be keeping a close eye on you as well. If you're wanting a pay rise, they're going to be watching you and saying, okay, cool, show me what you've got. And if you can prove yourself, then you're definitely going to be getting one in the near future.

That's right. And I think it's really important that if the employer does say, no, not now, that you don't have a chip on your shoulder and go back to work with a grudge. You know, you still need to be putting in that effort. You still need to be doing exactly what you were doing before, or doing more than what you were doing before. If it wasn't enough to get you a pay rise. Because sometimes it's not a case of the employee didn't want to give you one. It's just that financially, it's not something that the business is capable of doing.

Yeah, absolutely. Which doesn't mean it's not. They're not capable of doing it ever.

That's right. Just not now.

Yeah, yeah, yeah, definitely. And I think, you know, people got to remember that, you know, the worst that can happen is that they say no.

Exactly.

And as long as you remain professional and as long as you remain positive, you're never going to lose your job because you've asked for a pay rise.

That's right.

If you've still shown loyalty and support to your employer and you've just put it on there, you know, put it out there, look, I'd like to discuss a pay rise. You've done it professionally, they're never going to turn around and say, oh, no, you're not going to get pay rise and you're going to lose your job. So I think everyone's going to remember that's. The worst that can happen, so you may as well give it a go whenever you can.

Absolutely. What have you got to lose? But I do think you need to be aware that if. If you do it and the employer says yes, which is awesome, don't think, okay, they're easy. Let's do it again in two months. You know, you've got to give them a bit more time.

On average, how often should somebody ask for a payroll?

I wouldn't be asking more than once a month. Unless your job dramatically changes. Sorry, once a year.

Once a year. Every month. That would be quite an interesting conversation with the boss.

Okay, it's that time.

Can we do this again?

Yeah, once a year, unless your job dramatically changes. So if you get a promotion, obviously, or you move to a different department, or you take on a lot more responsibility, then that's a great time to ask. Not while they're training you, but once you've shown that you can take that on and do it. Otherwise, not more than once a year.

And then, and hopefully as well, throughout the year, you're getting regular performance reviews with a manager or your boss or whoever it may be. And that's an opportunity, not necessarily to ask for a pay rise, but just say, hey, am I doing everything that you would like me to be doing? Is there anything that I can be doing now to potentially warrant a pay rise in the next six to 12 months? And really kind of just put it out there and just say, if I want a pay rise, what do I need to do? And then just do it. So that's a great opportunity as well.

Absolutely. And I think also be aware, again, particularly in small businesses, bosses don't necessarily think to give performance reviews. So don't be afraid to ask for them.

Yeah, absolutely. Definitely. Okay. That's fantastic. I mean, sorry, one other question that I did have. Are employees ever obligated to give their staff a pay rise?

No. So if you are on minimum wage, then every time the government announces a raise in their minimum wage, the employer has to give you a pay rise. If you're above minimum wage, which the majority of people are, they don't have to give you a pay rise ever.

Yeah, yeah.

So. And like we said earlier, they won't necessarily think to do so. So you have to be the one asking.

Yeah, absolutely. All right, that's great. Well, I think, you know, the challenge is there. Everybody that's listening to this podcast, you need to really ask yourself those two questions. Am I deserving of a pay rise? And is this the right time, economically, to ask for a pay rise. And if the answers are yes and yes, then it's time to book an appointment with your manager. Absolutely. Good luck, everyone, and thank you. Chelsea, thanks so much.