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When can you ask for a raise? How much should you ask for? And what exactly is a "good" raise?
These are just some of the questions that will pop up when your upcoming career goal is to ask your boss for a raise. Asking for a raise and negotiating fair pay is one of the most important times in your career.
Not only do you want to be compensated for your value and skills, but you've also got life things to consider, like cost of living, inflation, location, and more.
That's why before you ask your boss for a raise, you'll want to make sure you know how much to ask for. Additionally, we'll cover when you should ask for a raise and what factors affect raises.
Table of Contents
- Why Does It Matter That You Know How Much to Ask For?
- Factors That Affect Raises
- Average Pay Increases in Not-So-Average Times
- How Much of a Raise Should I Ask For?
- When Should You Ask for a Raise?
- How to Ask for a Raise
You've got this, and we're here to help!
Why Does It Matter That You Know How Much to Ask For?
Before we dive into all the specifics about how much of a raise to ask for, let's review why it's important to go in with a specific ask.
It's Impressive
For starters, it's impressive to know that you've done your salary research and understand what's happening in the market. When your salary ask is backed up by research, you can point to those pieces of data to strengthen your ask.
Things that are not impressive are a person whining to their boss that they need more money to afford their new apartment or because they just think they deserve it. You probably do deserve it, but that's why you're going to do your research to back it all up.
It Gives You Confidence
You will be more confident negotiating your salary when you know exactly how much you're asking for and why. Talking about money can bring on anxiety and a bucket of nerves. One of the best ways to calm those emotions is by being prepared with a specific number and the specific research or examples to back up your "why."
It's Easier for Your Boss to Help You
Your boss most likely can't just say, "Sure thing on the salary raise, and you'll see the changes in next week's paycheck." They probably have someone they'll contact to advocate on your behalf. You'll make it easier for them when you make a specific salary ask.
If you ask for wayyy too much, you'll be seen as unrealistic, and the conversations won't go anywhere. If your number is too low and they accept it and go through the process of changing all the paperwork, then you run the risk of being told to wait for another year once you realize your mistake in asking for too little.
This is why your research and prep work are so important to your overall success with asking for a raise.
Factors That Affect Raises
The next thing to consider is what factors affect asking for a raise. In addition to coming up with a specific number, you want to keep in mind things that might prevent you from being successful with your ask.
And things like the Covid 19 pandemic or other special circumstances aren't the only things that can keep companies from increasing employee salaries. We also have to consider the following:
Inflation
Inflation is a hot topic in 2022 already, and it's one of the biggest factors that affect someone's compensation. Inflation is the increase in prices within the overall economy. And even though this seems like it just started happening, it didn't. Moderate inflation is a normal part of the way the economy functions. But it can be a bigger challenge when it rises too fast—and especially when it rises faster than wages.
According to the U.S. Bureau of Labor Statistics "Consumer Price Index News Release," in December 2021 the Consumer Price Index (CPI), which measures overall cost increases in the economy, rose 0.5% from the previous month and 7% from December 2020. When you take out food and energy prices, the index rose 0.6% from the previous month and 5.5% from the previous year.
So what does that mean in plain English? Basically, when prices increase at this quick rate, your dollar doesn't go as far as it used to. For example, your cost of living might have gone up but your salary hasn't. When inflation moves faster than our compensation, we expect to get paid more to keep up with rising prices and costs of living.
But there's another twist with inflation. Just like your personal expenses might have gone up, so have the costs for corporations. Those increases in their business may impact your success with asking for a raise.
Location
Your location is another factor that can affect your compensation—both your starting salary and salary raises moving forward.
According to the U.S. Bureau of Labor Statistics, wage and salary rates increased 4.6% between September 2020 and September 2021. That category increased at a pace of 6.5% in Los Angeles. But wages and salaries increased by only 2.5% during that period in Seattle.
But what if we leave the West Coast altogether? Here are changes in salaries and wages for the same period in the following cities:
- Minneapolis: 3.4%
- Dallas: 4.3%
- Atlanta: 3.0%
Knowing the salary and wage increase for the major city closest to your job arms you with more information on what your "cost of living" is potentially impacted by.
Job Performance
This might seem obvious but yes—how you perform (or don't perform) can affect your chances of getting a raise. If you've met or exceeded your job responsibilities, you're probably entitled to a raise.
Small or incremental bumps in salary, which are commonly done on an annual basis, incentivize employees to continue to perform well and be retained at the company.
An example of this is from my first job. Every year we had a meeting with our manager to discuss our accomplishments, and as long as you didn't totally drag your feet, you got a 2.5% raise. However, this company did not do raises outside of these annual reviews and the percentage didn't change. The only way to make more was to get a new role within the company, like a promotion or new job title.
Employees who meet their goals and meet the company's expectations are generally entitled to a 3% increase, which is the national average; however, that average could increase between 3 and 4% in 2023.
Then there are salary increases that happen when you go above and beyond at work. Pay raises that are based on your job performance are called merit increases. Depending on the company, employees may receive merit raises yearly or as a direct reward for outstanding work performance, with the best performing employees earning higher increases. So, instead of everyone getting a 3% increase, one person might get 2% and another 6%.
I also worked for a company that only did merit raises. We still had an annual performance review, and, from that, your raise could be anywhere between 0% to 8%. The 8% raises went to employees who created the most "value."
It's important to understand how your company structures its raises and bonuses for these reasons. Do you have the potential to earn more than the 3% national average if your performance is above the expectations or exceeds the goals you set?
If you want to ensure that you're in the running for a merit increase, ask your current or prospective employer and read up about your compensation package in your employee handbook or employment contract.
When it comes time to ask for a raise, your employer will want you to back up your argument, so make sure you document all your achievements and keep track of how competing companies are compensating workers in the same position.
Using my example above, the first company was in higher education, so competing companies or universities also followed the same annual raise structure. In the merit-based company I worked for, they let you know upfront how the raises worked, what was the highest percentage you could earn, and how you could earn it.
Job Sector
This brings me to my last point—your job sector. As you can tell from my example, working in higher education came with lower salary raises vs. working in the media job sector. And to be honest, I find the data from the U.S. Bureau of Labor Statistics on this topic to not be very thorough.
I can simplify it like this: working in a job or industry sector that makes a lot of money usually means your salary and raises will be higher. Think private sector jobs vs. education, government, or civilian jobs.
When I wanted to seriously increase my salary, I knew it meant leaving the public sector (higher education) and looking for something in the private sector.
Average Pay Increases in Not-So-Average Times
The last few years have been anything but average. The pandemic quickly shifted how we work, layoffs followed by resignations swept through companies and communities, and corporations have had to make changes to their businesses. So when it comes to salaries and raises, what changes have we seen?
The Conference Board reported that "employers originally planned for a total salary increase budget of 3.6 percent of total payroll in 2022, but the actual total salary increase budget rose to 4.1 percent." They note that the total salary increase for 2023 may rise even further.
Compensation consulting firm Pearl Meyer predicts surveyed employers who noted taht they're considering more competitive pay, including offering bonuses "to both reward workers and help them with rising expenses."
They note that "5% to 20% have increased or plan to increase competitive positioning for one or more pay components, like base salary, cash bonuses, or equity-based incentives."
They note that "5% to 20% have increased or plan to increase competitive positioning for one or more pay components, like base salary, cash bonuses, or equity-based incentives."
We have a lot of different salary surveys going around right now, and while the exact percentage varies, they are all showing bigger increases in 2023 compared to years prior.
Employees might not feel like their compensation is rising quickly enough, but according to Lauren Mason, a senior principal at Mercer, these compensation budgets by companies are the highest we've seen since the 2008 financial crisis.
Let's summarize what's happening here. We have current inflation rates at 7.1%. We have companies understanding that their typical raise range of 3% isn't going to be enough this year. The new average salary increase ranges from 4% to 6%, so you should keep that in mind as you do your salary research and prepare to ask for a raise.
How Much of a Raise Should I Ask For?
Ahh, finally we're going to talk about the elephant in the room—how much of a raise can you actually ask for? Based on the information above, a pay 5% pay raise would put you above the national average.
But sharing what a "good" raise is can be complicated because we all know the average is just that—an average. And while it's a good starting place, it doesn't feel like the final answer.
I did a lot of reading on this topic, considered our current economic climate, and broke down a few salary scenarios to determine what would be a "good" raise in each one.
Ask for 5- 10% If...
If your job sector has a more traditional raise structure and they are not based on merit, try to push that national average from 3% to something between 5% and 10% to account for the cost of living, inflation, and other economic changes.
Ask for 10-15% If...
This is a "good" raise percent to aim for if you're already paid competitively for your job but you have continued to perform. And if you have some longevity at the company, you can definitely push for the higher end of this range. By asking for 10% to 15% more than your current salary, you're also leaving some room to negotiate.
Ask for 15- 25% If...
You're paid competitively in your role but you have been an outstanding contributor. You might also ask for a raise between 15% and 25% if your role has taken on more responsibility but your job title didn't change. This is definitely a big jump for most companies and to get your boss to take it seriously, you'll want lots of salary market data and clear examples of how your contributions have helped the company.
Pick Your Number If...
You just found you're wildly underpaid compared to people in similar roles, you're interviewing for a new job, or you've moved into a new role and job title at the company. When you're making major career shifts, you want to consider your salary ask based on the market value of the job—not just taking your current salary and adding a certain percent.
If you fall into the camp where you learned your colleague with the same job is earning way more (ahem, you're wildly underpaid), do some research to thoroughly understand their role and their compensation structure. For example, maybe you're making about the same after you include your annual bonus that they don't get or some other compensation detail.
If there are literally no differences, then take that information and go find more people in similar roles and in similar companies to talk to about compensation. Determine the market value for your role, and consider your contributions. You'll take all of that information into your salary conversation with your boss.
Editor's note: Whatever number you're asking for will require that you come prepared to share your job performance, including specific examples of times you excelled at work and brought value to the company, and the competitive salary research you did. I wrote in-depth about how to ask for a raise here.
When Should You Ask for a Raise?
The most common times for salary negotiations and asking for a raise are:
- During your annual performance review
- When you've exceeded your goals and job responsibilities
- When your role has shifted (e.g., taking on new responsibilities)
- When you're changing job titles within the company
- When the market rate for your role doesn't match your current pay
As we mentioned earlier, you should refer to your employee handbook or ask your manager how annual salary increases are structured at the company. Depending on the changes that have happened within your role, you might wait until the pre-scheduled time at the company, or you might decide you're not going to wait for that pre-scheduled time and, instead, start having 1:1 conversations with your boss.
My best advice is to never unexpectedly spring the salary raise conversation on your manager. Be proactive and thoughtful with your approach. And just because your company has an annual time of year when they discuss compensation, that doesn't mean you can start planting the seed with your boss early on. In fact, I would start the conversations three to four months in advance.
In Salli Krawcheck's book, Own It, she tells the story of a man and woman working in the same position at a bank. Each month, the man came into her office and updated her on his performance and what he was expecting for his raise when the annual conversations took place. The woman did not.
When it came time for raises, he got 8% and she got 4%—or some amount that was less (hey, it's been a few years since I read the book!)—and that was because he started letting his boss know early on what he expected and emphasized his value to the company.
How Long Do You Need to Work at a Company Before You Ask for a Raise?
In order to successfully ask for a raise, you will need to point to some job results. If you had those in your first three months, you don't have to wait, per se, but the safer strategy is to wait six to nine months before you start asking for pay increases.
This minimum time frame allows you to establish a track record in your position and demonstrate the skills and qualities you bring to your job to your employer. But remember, you're more likely to get a raise after your first year.
How to Ask for a Raise
It's important to ask for a specific salary raise, but in order to do that, you need to take into account your salary research, as well as other salary factors like inflation, location, and job performance.
Once you have narrowed it down to a specific number that you can back up, pick your timing and prepare your boss with an email.
Once your meeting is set up to discuss your raise, practice your ask with a friend. It's great to have a test run before you're in front of your boss. And after you make your ask—be quiet. Let your boss consider the information and salary ask you've made. They will probably have their own next steps and process to go through.
We've written exactly how to ask for a raise here and created a downloadable script here.
What to Do if Your Raise Is Denied
If you don't get a raise or it's much lower than expected, negotiate. My best advice is to take a day or two after you're been hit by this news to discuss it with your boss. Going in with a game plan and strategy is way more helpful than an emotionally-fueled conversation. Here are the steps to follow:
Set Up a Meeting With Your Boss
Let's pretend you were hoping for a 10% raise but your boss came back at 6%. Take a few days to cool off and then schedule a 1:1 in-person or video meeting with your manager. Let them know you'd like to continue your salary discussions.
Consider Your Counter-Offer
You asked for 10%, you're getting 6%. What number do you want to counter back at? Perhaps you would consider 8 or 9%.
Own Your Accomplishments
When you start the conversation with your boss, be confident and own your accomplishments. Something like...
"Thanks again for taking the time to continue this conversation about compensation. In the last year, I hit or exceeded [Goal 1, Goal 2, and Goal 3], which is why I was a bit surprised that my raise wasn't higher. Given the impact of my current projects and my career development here, I would like you to reconsider my raise and increase it to 9%. I've also made sure to do some market research on my skills and the range is between [Number] and [Number]. My request for a 9% raise values my skills with the market, in addition to taking into account the cost of living and inflation."
Stay Professional
It can be enticing to threaten, mention that you know a coworker got a higher raise, or yell that John is paid more but he does nothing. Keep the focus on yourself.
Follow Up
When you leave your negotiation conversation, what are the next steps? When will you hear back from your boss? Get them to voice what they plan to do and follow up to make it happen.
If they tell you in the conversation that for whatever reasons the company can't meet your request, ask about the future. Can you touch base in six months about another raise? Are there perks, benefits, or bonuses you can get?
Know When It's Time to Walk Away
If you've tried to negotiate a raise but you're getting nowhere or you're already unhappy in a toxic work culture, then consider launching a job search. It's true that job-hopping is one of the best ways to increase your salary by much larger percentages. However—beware.
The grass is not going to be greener—it will just be different. Do your job search prep work to avoid dysfunctional work cultures in addition to knowing the salary expectations you would have for a new role.
