Increase own chances of a pay rise
Experienced employees in larger organisations know that their annual performance review usually results in one of two outcomes: 1) a pay rise often accompanied with a promotion, or 2) nothing changes.
Amongst SMEs, the process is often slightly less formalised, especially in smaller companies and startups where taking home any kind of pay packet might not always be possible amongst the founders, particularly in the early days. Once the company grows, performance management and pay rises become a good problem to have to deal with as it indicates the company is doing well.
Think you are being underpaid?
There are probably not many of us who don’t think from time to time that we should be paid more. But it’s not often handed to us without justification or expectations being met.
Don’t be afraid to speak up and raise your concerns with your manager. Worst-case scenario is that your pay remains the same, but you might just get what you asked for too! It’s never a good idea to openly talk to colleagues about salaries – and some companies have strict rules about it – so check your company’s approach on this matter.
Research from Hays recruitment shows:
53% of employers in Singapore taking part in the survey reported their company gave salary increases between 3% and 6% last year (2013)
Looking ahead, 56% will increase salaries by 3% – 6%, and 17% will offer increases above that level
71% of employers expect business activity to increase
The Asia Pacific outlook seems better than in the USA where the average raise in 2014 is 3%
Common pay increase processes
- Offer a slight annual pay increase as a goodwill gesture, and often in line with the local economy’s inflation. This goes some way in relieving the company of new staff recruitment and training expenses, although if an employee is only motivated to stay because of money, they might also be looking for a better deal elsewhere anyway.
- Larger and more organised companies will have planned progression and career pathways for employees to follow allowing them to take on extra responsibilities to gain experience and ultimately secure a more senior position.
- Avoid raising the prices of their products and services too often as they want to remain competitive. This means that higher profits (and the likelihood of pay rises) only occur if more customers are found and more deals closed.
What are employees doing wrong?
Doing the same thing every year but expecting to be paid more for it will (usually) not justify a pay rise. Unless the company is bringing in more gross profits, this is an unsustainable model, and eventually, the employee will be too expensive for the company.
Instead, to increase your chances of getting a pay raise, ask yourself:
- Has the company been earning more over the past year?
- Are you contributing more to the company then you were, in the past year?
If your answer to either question is No, then you will have to be more creative in justifying your pay rise to your company.
Ways employees can increase their own chances of a pay rise
Time to do some brainstorming! How should your boss fund your pay rise?
Think of your company as you would your own household finances. If you want to save and buy something special you either need to spend less so you can afford it, or somehow bring more money in. It’s the same with a company.
- Contribute to an increased company gross profit
- Reduce existing expenditures
- Do both simultaneously
Adding to the company’s profits might not be within your jurisdiction, unless you are in direct sales, but you can still come up with ways that the company might expand their market or offer new products/services. Don’t ever be afraid to raise an idea with the sales and marketing team.
Reducing a company’s expenditure is something that every employee at any level can do, from minimising printing, to holding teleconferences instead of travelling. Finding more efficient ways to perform your existing tasks is a great place to start and, if the tasks are repetitive, try looking for tools or software to streamline the processes, or even automate them.
Once you have proved that you have consistently reduced expenditure, without compromising on quality, you will probably have a better opportunity to talk to your boss about taking on more responsibilities and, ultimately, receiving a pay rise.
Note: This story has also been adapted for publication in Steemit.