Can you get a BIG raise without changing jobs?

When it comes to obtaining substantial raises, it is commonly believed that switching jobs is the only way. However, is that truly your sole option?

The answer depends on your company’s approach to raises and promotions. Some companies adhere to strict guidelines for pay increases, with merit-based raises falling within a defined range, and promotions accompanied by predetermined raise amounts based on the number of pay grades advanced. On the other hand, some companies have more flexibility and fewer restrictions regarding employee compensation.

While changing jobs might be necessary to secure a significant raise, there’s also a possibility of achieving a considerable pay increase by staying with your current employer and employing the right strategies.

First, let’s establish a baseline for different levels of raises:

Small raise: 1%
Normal raise: 2-3%
Good raise: 4-7%
Big raise: 8% or higher

These ranges are generally accurate based on my experience, although they can vary depending on the industry segment and other factors.

THE CHALLENGE OF SEEKING A BIG RAISE OR PROMOTION DURING ANNUAL REVIEWS

Most companies follow an annual merit cycle, either aligning with the calendar year or the company’s fiscal year. The merit cycle typically culminates in performance reviews, a modest merit increase, and potentially a bonus. Many employees assume that the best (or only) time to pursue a raise or promotion is during this short period at the end of the merit cycle.

However, this is often not an opportune time to expect a substantial pay increase. Merit increases and promotions are typically budgeted in advance, with a shared budget allocated to teams, departments, or even the entire company. Consequently, many individuals are competing for their share of the budget. If one person receives a significant raise, it means others may receive smaller raises or no raise at all. This places considerable pressure on managers to distribute the allocated budget evenly among team members to ensure everyone receives some form of raise and remains reasonably satisfied.

As a result, it is often exceedingly challenging to secure a large raise or paid promotion during the regular merit increase period.

AIM FOR AN OFF-CYCLE RAISE OR PROMOTION

So, what can you do? Your best option may be to pursue an “off-cycle” raise or promotion. These are often treated as individual events, not necessarily drawing from a fixed pool of money, and evaluated independently from a financial standpoint.

A well-timed request for an off-cycle raise or promotion can significantly increase your chances of obtaining a substantial pay raise. By presenting your case as an individual who has earned higher compensation or a better job title, you avoid direct competition with everyone else in the company for a limited amount of funds.

Off-cycle raises and promotions offer an additional advantage: they typically do not impact your eligibility for on-cycle raises. Therefore, you can still receive the merit increase you would have been entitled to during the regular merit increase period.

SOMETIMES, THERE ARE LIMITATIONS

Nevertheless, there are certain companies where everything, including raises and promotions, is predetermined. In such organizations, it can be incredibly difficult to secure a significant raise.

For instance, I previously worked at a company where it was explicitly stated that a one-pay-grade promotion came with a 4% raise, and a two-pay-grade promotion came with a 7% raise. While 7% is not insignificant, it does not qualify as a substantial increase, particularly considering the substantial jump in job title and responsibilities.

In that scenario, I realized that my potential earnings were essentially predetermined, and the only way to attain a significant pay increase was to leave and join another company. Consequently, that’s precisely what I did.

FACTORS TO CONSIDER WHEN ASSESSING YOUR POTENTIAL FOR A BIG RAISE

To conclude, here are a few key considerations to help you determine whether you can secure a substantial raise without leaving your current job. You can inquire about these aspects with your manager, refer to your company’s employee handbook, or seek input from colleagues who have recently been promoted:

Initiate the conversation: Many individuals assume that raises and promotions will naturally come over time. While that may be true to some extent, you might be missing out on opportunities for higher pay if you don’t discuss your options with your manager.

Is there a fixed budget for raises and promotions during the regular merit increase cycle? If there is, obtaining a significant raise during this period can be extremely challenging since numerous employees are competing for a share of a limited-budget pie. In this case, it might be better to wait and aim for an off-cycle promotion.

Is an off-cycle promotion or raise an option? Many companies treat off-cycle promotions and raises as unique events, assessing them individually. This means an off-cycle promotion offers you an opportunity to present your case and negotiate a larger raise based on your experience and value to the company.

If a promotion involves transitioning to a new position within your company, are there any open positions available for that role? If, for example, you are currently a Project Manager and the next promotion would be to the role of Portfolio Manager (rather than a similar level such as Project Manager II), check your company’s job board to see if there are any openings for that position. If there are, you can specifically target a promotion to that role. If not, you may have to consider pursuing an off-cycle raise without a promotion, or explore opportunities in other companies to advance your career.

Are the pay increases for promotions predetermined? In some cases, the timing of your raise or promotion may not significantly impact your potential compensation since it is already pre-established. If that is the case, achieving a “big” raise becomes highly challenging, and you may need to contemplate a transition to a different company if that is crucial to you.

Considering these factors will help you evaluate whether you can secure a substantial raise by staying with your current employer or if exploring other options is necessary.