So, You Want a Raise?

Seems like every week somebody posts a blog about how to get a raise.  Generally the advice is to gather up a list of your accomplishments, check sites like Glassdoor or Salary.com to see what the market is for your position in your area and to set a meeting with your boss.  Then to tactfully, yet forcefully, make a case for why they should pay you more money.  Sounds reasonable, right?  Wrong.  Wrong, Wrong, Wrong! That’s a great technique to get a 2.5% cost of living adjustment but it is a terrible way to ever get paid big money.  

Who am I to be critical of this common advice?  Well, I’m the boss, that’s who.  I started out as an entry level engineer, just like everyone starts out at an entry level, but I did not stay there for long.  I had people working for me within a couple of years and over time had more and more people until when I retired slightly early, I had 711 people that I was responsible for.  Needless to say, a big part of my job was figuring out what to pay everyone.  What starting salaries, what raises, what bonuses.  I had employees making from $32,000 to well over $200,000.  So I’m speaking from experience when it comes to the thought process that goes through a boss’s mind when it comes to figuring out what kind of raise you deserve.  I also artfully managed to increase my pay from the first years figure to twenty four times that amount my last year, over a thirty plus year career, averaging around 9% annual increases. So I know what worked to get consistently large raises.  

With hundreds of employees, obviously they did not all work directly for me.  We had a few levels of management between most of the entry level jobs and mine, so I depended on each employee’s supervisor to rank their departments or teams in order of the value of each employee to that team.  It wasn’t based on seniority, just on merit, so it wasn’t unusual for some younger employees to make more than older ones doing the same kind of work.  The way annual raises worked was that I was given a budget by my Fortune 500 CEO for the total of all raises, something like 3%.  And I could give anyone as much, or as little as I chose, as long as the total didn’t go over 3% of our total payroll.  So in effect, if I gave one person 15% then I had to cut twelve other people down to 2% to make up the difference.  That sounds cruel I know, but I did not make the rules of the game.  My job was to protect the highest value employees first and we would take our chances with the ones who could be more easily replaced.  If this is starting to make you feel like you now know why most people only get  2% raises, then you are catching on.  

My job was to determine who I had to protect.  Those were my rock stars, the people I did not feel we could flourish without.   It was hard to attain that status, you had to check two difficult boxes.  One, you had to be in a job that was directly tied to profitability.  Second, you had to have mad skills, skills that only 5 or 10% of your peers could match.  At our facility that was usually limited to engineers, they designed and optimized the operations of the production equipment and it was easy to measure the money they made the company.  Frankly, at the plant level we could get by with average accountants and logistics types so I did not have to stretch to protect those jobs, it was strictly cost of living type raises for them.  But for rock star engineers and operations supervisors I paid what I had to, because it was nearly impossible to replace them with other rock stars.  Finding that one out of ten or twenty is an arduous task, considering my competition was also constantly looking for them.  

You would think we would have had constant turnover of the average employees.  And I’m using average as a label for everyone that wasn’t a rock star, out of convenience. Not to say they were average or uniform in terms of ability.  Of course some of those were not great employees and some were highly skilled, they would have been rockstars themselves at another company.  But we did not need their expertise enough for them to qualify as such in our business.  Take a biochemist for instance, a world class biochemist at Merck Pharmaceuticals can command kingly wages, because he is obviously and closely tied to the profits of the company.  But at our facility he would be running routine environmental analyses, something that would not require the same mad skills as a Merck researcher.   Having a world class chemist doesn’t offer much more value than a barely average chemist if you are only running a few basic tests over and over. And that isn’t the chemist’s fault but it is a real problem if you find yourself in a position that isn’t seen to be tightly linked to paying the bills.  On the other hand our chief chemist was a rock star and he was compensated to reflect that, because we had to have him to help solve problems nobody else could. 

Surprisingly we did not have much turnover, even in the jobs that did not get the bigger raises, and I’m not sure why.  Maybe it was human inertia, our isolated rural location or the fact that we offered stable long term employment with good benefits. A lot of people settle for working in jobs they do not really enjoy and that they feel under paid doing.  I’ve always felt that work can and should be one of your favorite hobbies, you just have to find something that you can learn to be really good at. But like most companies it seemed that many of our employees were just working to pay the bills. 

We actually had higher turnover with our rock star employees.  The downside of employing superstar talent is that their reputation gets out there and it isn’t long before you find yourself in a bidding war to keep them satisfied.  And that’s where my personal experience comes into the picture.  You see, even though this post is about how to get a raise, I never asked for a raise in my life.  And I never left my company. And I got great raises anyway.  So how did I do that?

I did it by becoming my own boss’s number one rock star employee.  I asked questions constantly and cultivated a personality of curiosity about the business, starting with my own job duties but spreading out way past what I was assigned.  Note, when you are asking questions learn to be very careful about who you ask.  It is OK to ask your boss deep and complicated questions that you couldn’t be expected to answer on your own. For all other questions,  never ask anyone higher up in the organization.  If it is a question that you can answer for yourself or by asking a peer, then do that.  Contrary to popular opinion there are lots of stupid questions and if you ask your boss or one of his peers stupid questions, that is going to reflect badly on you

 Some other things I did included memorizing the complicated arrangement of processing equipment and piping in our facility.  These mini complexes were the size of city blocks with millions, sometimes hundreds of millions of dollars worth of equipment all connected together by piping. We had process flow diagrams that showed how the raw materials flowed through the equipment and were converted to valuable fuels and chemical products and these were very complex drawings.  I took them home and studied them until I could draw them from memory.  Having the intimate details of the actual equipment that made 100% of our company’s profits embedded in my brain gave me a superpower over my competition. 

I applied that kind of obsessive overkill to learning everything I could and as my skill set grew I found I was having the time of my life. I became indispensable to my boss, himself a rock star employee destined to eventually run the corporation, and became his most trusted assistant.  The market was hot for young engineers at that time and I was getting calls every week from chemical and oil companies offering me 10 to 20% raises to jump ship and work for them.  I loved my job and had no interest in leaving, but it occurred to me that my boss did not know that for certain.  So I started passing on the best offers I received, especially local ones that wouldn’t require me to move.  I never made a threat, in fact every time I would tell him how much a company had offered me I would also tell him I wasn’t interested in leaving, that I loved what I was doing. But he got the message that my value on the job market was escalating faster than my paycheck.  And that scared him because he recognized that his path to the top was in no small part bolstered by my skills, skills that he couldn’t easily replace.

Why take that risk if another ten thousand dollars a year would make it go away?  And year after year the offers kept coming in and the company kept giving me great raises.  There were a few years when the economy was in deep recession that I didn’t get much of a raise, but not many.  And because raises are compounding, just like interest, I stayed near the top of the pay range for my position nationwide.  

Since I recognized that the outside job offers were key to getting pay increases I nurtured my relationship to the recruiters who were bringing the offers to me.  They would have stopped calling me once they realized I had no real interest in leaving, except for one thing.  I had a network of people both inside my corporation and with our competition and I could refer other people who were unhappy with their jobs to these same recruiters.  They placed a number of these people, so they kept calling. I’d tell them no, but I’d also steer them to others who were ready for a move.  Because my referrals helped other rock stars move up at other companies my network kept growing and I started receiving job offers from some of them.  It was one of those virtuous circles where helping others was also helping myself. 

The final part of earning more money at your day job is frequent advancement.  Nothing gets you raises like getting promoted.  I started as a summer intern and worked my way to the very top job.  And every promotion brought with it a significant pay hike.  Plus it also put me at the bottom of the wage range for that job, at first, which made it very easy for the company to keep giving me nice raises.  If you stay at the same job level you will eventually top out for your job.   Other companies will lose interest in you once you’ve topped out because you will have priced yourself out of the market.  For those reasons you have to see a clear path upward, if not it is time to leave that company and move to one that has more opportunity.  I was very fortunate in that I never had to switch employers to keep moving up.  But that was no accident, I selected that company out of eight that offered me a job upon graduating from college, because I felt that I could advance to the top there.  

That’s all there is to it, find a job you can master, not just one you can be pretty good at, and then do the hard stuff to separate you from your competition. And find a place to do it where it is critical to company profits and everyone knows it.  And cultivate a network outside of your company that will bring job offers to you with enough frequency that your boss knows you have options.  And finally, make sure you can see a path to the top levels of earning at your company. If you lose sight of the path, leave.  

The simple truth is your boss, or her boss, or their boss has a limited pot of cash to distribute.  Any dollar he gives you is probably coming out of someone else’s pocket.  I’m not trashing having an abundant mindset here, I’m just saying the person handing out the money doesn’t have one when he is deciding on your annual raise.  So to get an outsized raise you have to be a larger than life employee.  You have to be in the right job at the right company and you have to be marvelous at it.   And you have to be in demand.  I think most people could do that, but it won’t happen by accident. And the steps to achieve it may not appeal to you in the least.  That’s OK, maximizing your compensation at a 9 to 5 may not be your thing, side gigs or your own business are better plans for a lot of people.  But it worked for me, allowed me to enjoy my career and then to walk away on my own terms at the time of my choice. 

So do you think my ideas for getting better raises still work or is it just more “Ok, Boomer” nonsense.  

Does anything I wrote sound unethical or sketchy?  

What has worked best for you in terms of getting pay raises?

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