rsz_--2021

Getting a pay rise – a business owner’s perspective

I get it.  Prices are constantly going up around us.  You have to keep putting food on the table, clothes on your back, a roof over your head.  So, what are you to do?  Based on what I see and hear around me, the ‘go to’ response seems to be to put your hand out to your employer for a pay rise.

And then if you go searching online for “how to get a pay rise?”, most of what you read talks about the following

  • Picking the right time
  • Forewarning your boss
  • Come prepared with reasons
  • Don’t demand
  • Make it a conversation
  • Leave emotions out of it
  • Don’t make it personal
  • Don’t threaten
  • Negotiate

Oh please! Give me strength.

This might make perfect sense to the many recruitment specialists, or union representatives who have never run a business, and who care about themselves more than the employees out there who may want (or need) raises.  I say that because if they had employees’ best interests at heart, they’d give advice that gives them a much better chance of getting that raise … that is assuming they want employees working with employers.

And therein, I think, lies the problem.  If employees and employers actually worked together (instead of the rhetoric that employees are lazy, and employers use employees), recruitment companies wouldn’t have as much work because employers wouldn’t want to lose employees – and employees wouldn’t want to leave.  Unions wouldn’t have as many members.

The conventional advice you’ll find online about how to get a raise keeps a wedge between employees and employers.  And here’s why that happens:

  1. Depending on what reports you read, at least 50% of employees would leave their job for a better one if they could (i.e. they have no commitment and are disengaged from their current job).  To those employees, their job is simply about earning a pay.  A disengaged employee won’t do anything extra for the boss/employer either voluntarily or if asked, and if that’s the case then it’s hardly surprising employers/bosses won’t do anything in return either.
  2. Employees sign employment contracts.  An employment contract is (no surprises here), a contract … an agreement.  You agree to do something, and your employer agrees to do something.  You’re not forced to sign the contract – either you accept the terms or you don’t. No one is holding a gun to your head.  If you sign the contract, then you agree to do certain tasks and your employer agrees to pay you a certain amount to do that – not any more.  It’s simple really.  This means you can’t expect more if you’re doing the same job you agreed to do when you signed your employment agreement.

As a business, my customers don’t pay me more just because my costs go up and I have to pay my bills.  They pay me more only if the benefits of what they buy from me are more than what I’m asking them to pay for it.  So yes, they may pay me more (and I use the excuse of increased costs), but only to a point.  After that I must give more value to my customers otherwise they simply go elsewhere. Or I must find ways to reduce my costs.  Either way it’s not my customer’s problem – it’s mine as the business owner.  Same goes for you as an employee of a business. What you do provides a certain amount of value to the business and a business will pay you to a certain point.  After that, you better find ways to give more value otherwise you may find yourself replaced (by another person, a better system or process, or something more automated).

Pretend for a moment that getting a raise was similar to impressing someone you like who you want in your life.  If you were going to ask someone you fancied out for a second date following the advice of most recruitment agencies or unions, how do you think you would go?  It would probably look something like this…

Sometime during the date, you’d forewarn them that you’re going to ask them out for a second date (smooth… not!).  You’d then pick the right time, presumably towards the end of the date. You would attempt to negotiate with them for a second date, providing reasons (all about you) why they should accept your request. You wouldn’t demand a second date and you’d leave emotions out of it.  You wouldn’t make it personal and you would avoid threatening them.

How do you think that would go?  I’d suggest this approach is more likely to fail than succeed. Mainly because it’s all me, me, me.

What if, instead, you tried something different like finding out what they liked (novel idea, you ask them what they like and actually listened) and then you gave them what they liked. Do you think you’d have to provide reasons and negotiate a second date then?  Not likely.  I’d suggest making it less me me, me, me and more you, you, you is more likely to result in them accepting an invitation to a second date. It may even result in them asking you for a second date instead!

There is no entitlement to a pay rise, unless the employment contract says there is (not likely).  And by the way, a performance or wage review does not mean you get a pay rise. 

Talking with other business owners, there is a feeling that some employees believe they are entitled to a pay rise because of various reasons – increased petrol prices, unaffordable house prices, increasing rents, inflation, being a minority race, being a particular sex, owning a three-legged cow.  The only thing you’re entitled to is whatever was agreed in your contract, and any later variations agreed between you and your employer.

As a small business owner, it’s my money and life on the line running a business and employing others.  I’m happy to pay employees something (based on what’s agreed in the contract) for what I want them to do.  I’m also happy to give a bit extra if an employee does a bit extra.  It’s all about give and take … not take and take.

What I am not interested in doing, is giving anyone a pay rise when they do any or all of the following:

  • You don’t like your job and/or you don’t like me as your employer and you’re only here for the pay.
  • You don’t do anything more than what’s in your employment contract, ever!
  • You don’t offer to do anything more to help.
  • You don’t care about what’s important to me.
  • You think you’re entitled to a pay rise because of where you live, your family circumstances, your age, sex, seniority, religion … whatever reason you think you’re entitled by.

If you want a pay rise, then forget the rinse and repeat advice you’ll find online and follow this advice below instead, because I guarantee you that your chances of getting a raise will increase significantly (as long as you have a reasonable employer – and if you don’t then I suggest you quit and find one, or find one and then quit depending on your personal morals):

  1. Stop letting your past tarnish your present/future. Stop distrusting your employer because of past dickhead employers who may have used you.  Stop putting all the blame for past bad employers on them. Stop believing all employers and business owners are there to use you and make money using you in their business.
  1. Start by picking and working for employers/bosses that you respect – ones that have core values which they stick to and that you align with.  Or pick a job/business that is interesting to you.  If you’re interested in your job, you might be willing to do extra, and your boss might be willing to give you extra.
  1. You’re going to have to do something extra if you want a rise.  You might want to accept that request by your employer to do something extra.  Think about what jobs you could do that need doing.  If you do the work for others (as well as your own), then it’s not unreasonable to request more pay.  Just be careful you’re not being used by other lazy employees who use you to do their jobs.  And be careful that doing others’ work doesn’t result in them getting pay cuts or losing their jobs due to you ‘taking’ their work.
  1. If you want more, you have to offer more to your boss/employer – and that’s either by doing more for them … or doing more for the business (i.e. the business’ customers) so the business makes more (and I mean more sales, more profit and more cash – not more sales and less cash).  What matters here is what extra value does your boss/employer get and not what extra value you think you are giving them – it’s their perception that’s important, not yours. It’s the same in business – it’s the customers’ perception of value that’s important and not the business owner’s.
  1. Instead of guessing what your employer wants for you to get a pay rise, here’s a novel idea: Ask them! “I’d like a pay rise – what would I have to do in order to get one?”  Most reasonable employers/bosses should be happy to discuss how you could contribute more to get more.  At least this way you will know the expectations.  Be careful trying to guess what’s most important to your employer – you may get it wrong and hurt your employer’s goals, and you won’t get a rise for that.
  1. Set regular meetings to make sure you’re on the right track and so you can make corrections as you need to to stay on track for whatever raise you want.   That avoids the frustrating situation of unreasonable bosses/employers moving the goal posts and you getting nothing.  And if you meet whatever was agreed, and your boss/employer ‘moves the goalposts’, start looking for a new job.
  1. Sometimes it’s not about doing more – it’s about doing getting more done with less, without negatively impacting your boss/employer/customers.  Look for opportunities to save the business costs and/or earn the business more money and offer to discuss them with your boss/employer on the basis if they are successful, you get something as well (a percentage?  A pay rise?  More responsibility?)
  1. Sometimes money is a problem. Sometimes a boss/employer simply cannot pay you more and if that’s the case maybe there are other things they could do instead e.g. more time off; contribute to healthcare/childcare; contribute to courses you’d like to do. If it benefits the business, you might be surprised what they may do for you.
  1. Sometimes it’s not about getting a raise from your employer, it’s about you controlling your own costs better.  As a business owner, we have the same problem too.  We need to review our costs now and again to make sure we’re not paying for things we no longer need; to make sure we’re not paying too much for things we want; and to make sure there aren’t better, cheaper ways to get what we want instead.  Research says on average we spend 15% on things that don’t add anything to our lives.  Things you could remove from your everyday spending and you wouldn’t really notice it (apart from having an extra 15% of your wages in your bank).  Add to that, everything is changing.  Automation is driving prices down and offering better options to do the same things.  Greater competition drives prices down. Most suppliers don’t go out of their way to make sure you’re paying the best price – they’re happy if you’re paying the original higher prices.  Keep them honest or find better options.

One final thing I want to add is that this only works if both the employer and employee are fair and reasonable.  I know not every employer is ‘fair and reasonable’, but it’s unfair to tarnish all employers as unfair and unreasonable because of a few.  Just as its unfair of employers to tarnish all employees as disengaged based on the research that says more than 50% of them are. 

The truth is, employers need employees and employees need employers.  If we can’t work together and trust each other then everyone loses (except maybe the Government bodies, unions and lawyers).  If you have been hurt by a bad employee or employer, you can hold onto that grievance and continue to distrust employees or employers or you can take ownership for your part in that outcome and do something different next time.  Maybe try what I’m suggesting above:

  • If you’re an employer, share this with your employees to give them a different perspective and make sure you honour your part in any wage negotiations.  Maybe you could consider helping your employees learn how to manage costs/budget.
  • If you’re an employee, ask your employer how you can help more to get more – and deliver on whatever you agree.

Doing this will help build better worlds through better business for everyone.

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