Recently I saw a person get a 35% salary increase in a single day. Her base salary increased a whopping 69% ($55,000). Here is how she did it.
Recently I saw a person add 35% to their total compensation in a single day. To be honest, I’m not sure I would have believed a salary increase of this size was possible had I not been seen it myself.
Here’s what happened and what you can learn from it about how to get your own salary increase. (Note, I’ve changed a few details to mask the person’s identity but the compensation figures are real.)
Susie’s massive salary increase
The individual in question, let’s call her Susie, worked for a firm of about 100 individuals in the healthcare industry. She was on a team of about 12 people and well positioned to take over her boss’s role if/when he ever left the firm.
She was well respected in her company and her boss thought very highly of her. They had a solid, trusting relationship. She did, however, want a salary increase.
She was making $80,000 a year with an expected annual bonus of $20,000.
Sensing that the advancement opportunities in her firm were limited (i.e. would require her boss to leave or get promoted) she went out and looked for other job opportunities. During that time she was very careful to say that she was happy where she was but that she thought it wise to consider what else was available.
Eventually, a new opportunity came up. It was a position with a smaller firm, but she would have greater leadership responsibility and influence at the company.
The offer was for $115,000 in base salary with no bonus. –A salary increase of 44% and a total compensation increase of 15%.
She thanked the new firm for the offer and asked them for a bit of time to consider the offer, which of course they granted.
The next day she went to her current boss and explained the new offer and the salary increase she was being offered. She said that she didn’t want to leave the firm but that she felt like the opportunity for growth was limited and that she would get paid more at the other firm.
She asked if there was a way they could brainstorm a solution that would give her a more influential role and give her a comparable salary increase.
Her boss didn’t want to lose the best member of his team, so he worked out a potential promotional path with her and took it to his boss, explaining the situation.
After much back and forth, they came back with an offer of increased responsibility, a better title and $100,000 in base salary plus $20,000 in annual bonus.
Of course, she was thrilled with this $20,000 base salary increase and then went back to the new firm and requested their best offer.
Her conversation with them went something like this:
“I really want to join your team, but when I told my boss I was planning on leaving, he offered me a promotion and a bunch more money. I enjoy the people I work with there and am enticed by the promotion. What’s the best you can do for me?”
A few hours later, the new offer came in: $135,000 in base salary with no bonus. In other words a 69% guaranteed base salary increase and a 35% increase in total compensation.
She went back to her current boss and gave them the news and asked what they could do for her. They had no more room to budge.
In a day she had a salary increase of $55,000 (a total compensation increase of $35,000). I’m guessing she had a nice dinner and bottle of wine that night.
Naturally, her current boss, his boss, and their HR department all felt a bit played. I would argue that she was entirely within proper etiquette, as they were underpaying her based on her value to the firm (or a similar firm).
So, let’s look at what she did right to make this happen:
Salary increase rule #1: She started her job search from a position of strength
When you are interviewing for a job and you already have one, you are negotiating from a position of strength and it comes across in everything you do. The things you say, the confidence you project, and the time you have to make the right decision.
Put simply, you are in a no pressure situation. You almost can’t help but be successful from interviewing to getting an offer.
Salary increase rule #2: Decrease supply, Increase demand
The value of anything, from a rock to a person on the job market, is a function of supply and demand.
Think about rocks: gravel rocks are in huge supply and limited demand for them exists. Thus they are cheap. Diamond rocks are in short supply and huge demand exists. Thus they are expensive.
The same applies to people on the job market. The supply of people with Susie’s skills is fairly limited, and in this case there was quite a bit of demand. Thus, high value/price (i.e. salary).
-But note what she did here. If she had quit her job, then the demand for Susie would be from one firm and she would have likely accepted the $115k offer. Susie increased demand for her services, created a bidding war, and thus got a massive salary increase.
Salary Increase rule #3: Know your value
You can try to negotiate a salary increase without another offer in hand. To do so, you need to do your best to find out what your peers are making within your firm (to the extent it is possible) as well as use websites like salary.com and glassdoor.com.
The challenge is that your boss isn’t all that pressured to do anything when you come to him with a bunch of internet research and reasons why you are amazing and will add more value. You will likely get some sort of deferment as an answer, for example:
“Well, I think you’ve done some good work and made some good arguments. We don’t have the budget right now, but let’s keep this in mind for yearend.”
Guess what, chances are nothing is going to happen at year end, but certainly more than if you hadn’t asked.
If you’re going to follow the path of getting a raise without a competing offer, you need to take a more strategic approach. (See my article How to negotiate a big raise at year end.)
If you want to make massively more money, a competing job offer is the only way to do it.
Salary Increase rule #4: Leave your options open
Note how Susie looked to co-create a solution with her current boss, voicing her desire to work with him in finding a solution. Note that there was also never an ultimatum like, “I’m going unless…”
People don’t react well to ultimatums, so you always want to work to co-create a solution.
The problem with the ultimatum is that even if it works out, a sense of bitterness will remain with the people who caved to it, and this feeling is likely to last a fairly long time into the future.
The story I told above isn’t the only time I’ve seen this set of events unfold. I had a colleague do the same thing, ultimately stay at our current firm and get a very solid pay bump.
Why does this happen? Some firms have a tendency to pay top dollar when hiring from outside but then only pay the people they already have on staff a bit more than they currently make when promoting them, etc.
Over time this leads to big discrepancies between someone’s pay and their market value. Thus, part of the reason you see people jumping around every few years (see my article: Career coaching: Have you been in your role too long).
I have had the argument multiple times in the past with an HR and/or finance department that won’t allow me to increase someone’s compensation after a promotion to be inline with what we would have paid an outsider.
The lack of transparency in compensation can create some strange situations. It is not uncommon to have junior people making more than their more senior counterparts based on the conditions in which they joined an organization.
So what does this mean for you? In summary, the surest, fastest way to a salary increase is to have another offer in hand and be ready to stay or go depending on the way things pan out financially.
I’m by no means saying that you should move to the role that pays you the best, that is only one factor in deciding where to move (see my article: How to evaluate a job offer).
What I am saying is that there is no proof that you are worth a salary increase like having another higher paying offer in hand. -And no better way to get a salary increase than by starting a bidding war.