Raises.

** Because this can be a controversial topic, I want to be clear that these are things to keep in mind if you're looking to successfully negotiate a raise in your workplace, not if you're looking to have your opinions on the free market affirmed. **

With the current economic situation, people's minds are set on money. There's no question that it costs more to live now, and while there are many ways to solve financial struggle, one in specific can impact our job whether we realize it or not. Asking for more in the workplace isn't easy; while organizations generate large sums of revenue, they also have to budget around the same rising costs affecting our personal lives. So how can we go about asking for more in the workplace while still respecting the financial wellbeing of the organization employing us?

I personally have never asked for a raise, I'm just not that guy. As a matter of fact, when I first got the job I have here in Iowa I tried to argue that they were paying me far too much for the job I was going to be doing. I still have that feeling, but I just choose to be thankful now. However, if there is one thing I know about asking for a raise, it's that it can often lead to tensions between team members and leadership. Not because of the initial request, but the misunderstanding from one or both parties. If you're thinking about asking for a raise, here are a few things to keep in mind:

Organizational Leadership's Responsibility: Depending on the structure of your workplace, the pressure of this responsibility can differ, but the pressure of financial responsibility for the organization is a firm constant. Wherever you work, the leadership team has a priority, and that is to be profitable (make money). Signing up to pay workers more money (giving out a raise) typically means one of two things - they either need to bring in more money or cut spending elsewhere. Put simply, giving out a raise is very literally putting more pressure on their responsibilities.

The Numbers: While organizations look at a multitude of numbers, they are really honed in on profit. They care about the other numbers because of how they effect their profits. What this means then, and a lot of people know it but don't consider it when asking for more, is that while your organization might be bringing in thousands/millions/billions of dollars, they are likely also forking out thousands/millions/billions of dollars to operate. The negotiation strategy of stating that the company is, "making millions of dollars a year, they can afford to pay me a little more." is quite literally the worst in the book. Not only is it frustrating to leadership, but it also shows a very clear misunderstanding of finances. (which as I stated above is a high pressure responsibility for leaders)

Scenario - If your organization generates $25MM in revenue in one year, that doesn't mean they made $25MM. In reality, it means that after expenses like payroll, employee benefits (insurances, 401k match, vacation time, sick leave, bonuses, etc), taxes, fines, fees, supplies, donations, sponsorships, etc. are paid, they've probably spent $24.5MM. Meaning they only truly made $500,000 (And that's probably being generous.)

Who's the boss?: The pressure on leadership to perform well can come from many different places, but it all originates from the market. They need to do well financially to stay in business, that's the obvious. But even then, whoever you might consider the boss, still has people keeping an eye on their performance, and that includes the CEO. It blows my mind how many people are unaware of this truth, but being a president/CEO truly doesn't make you the king in the castle. There is in most cases a board of directors that oversee the performance and progress of the entire organization, including the president/CEO. Even if this isn't the case though, the market still has rule over a private owner, if they don't do well they won't stay in business. So, just like we sometimes fear we might lose our job, CEOs do also. Expenses add to that fear because they negatively effect financial responsibility, and their opportunity to be fired (literally under a board and fiscally under private ownership) typically comes around once a month, not once/twice a year.

So, to sum it up, keep in mind that the person you're asking a raise from takes financial responsibility for the organization as a whole, there is more to the numbers than the dollar amount you see, and every boss has a boss, whether it be people or finances. So, with that in mind, what negotiation methods work?

Italics below outline a full-circle example of a communicated request for a raise.

Understanding: Understanding the true weight of what you're asking for and with that, what you're already being provided, is a great place to start. The pay you're seeing is truly only a portion of what it costs to have you employed. An article from American Express shares more on this. Once you understand what you're already being provided, verbally acknowledge it. Let the leader know that you know how high maintenance you truly are (yes, I said that). They will be extremely willing to listen just based on your gratitude and understanding of your cost to employ. Show you understand, "I first want to share that I understand the costs of employing me. I know that I currently make $x, and that the benefits being provided add an additional cost to my wage. I also understand that this organization is very costly to operate, and adding expenses can be stressful."

Reasoning: The next step then is to have a reason. If your reason is that you need more money, go back to the drawing board. What are you doing that's different from everyone else? How is the organization benefitting from having you on the team? What improvements have you made that have in turn helped the organization financially? Don't wait for the leader to ask these questions, just provide the information up front. Explain it, "I suggested that we make the change to our operations and on average it saves each marketing associate an average of 30 minutes of labor per day, times 6 associates is a total of 3 hours of labor per day. With a base pay of $25/hr for that position, that's $75/day, or roughly $18,750/year at a minimum that this new operation has saved the company."

Requesting: With an understanding of their position and a clear explanation of the value you're bringing, your request is going to be heard and at the very least, considered. If your reason is your financial benefit to the company, let me be clear that asking for the whole amount of that benefit is unwise and going to again express a lack of understanding. An example would be like above, if you ask for an $18,750 raise, you're 1) likely not going to get it, and 2) putting yourself back into a position of difficult negotiation. Like in the understanding section, understand the weight of what you're requesting. It should be realistic and not rob the organization of the benefit of your employment. It's a relationship, if they aren't benefitting from your work, they aren't going to keep you. Your benefit is your income. Request a reasonable raise, "Seeing that this new operation is saving the organization an estimated minimum of $18,750/year, I think I am in an okay position to request a raise of $2/hr. This would total roughly $5,000/year in additional cost of my employment, and the organization will still continue to benefit $13,750 on the implemented operational change." That's a reasonable request that is likely going to generate a large amount of consideration for a raise. They might fire back with a lower number, but that's okay. You're in a position to negotiate now.

Agreeable: When you're negotiating the numbers, be agreeable. Remember that they don't owe you anything, and adding another expense is, for them, another stressor that affects their responsibilities and in turn, their job. They have every right to just give you a flat out no and ask you to go back to work (although a good leader won't do this). If the best they can give you for a raise is $1.5/hr, be thankful. That's still an additional $3k/year on your paychecks.

So if you're considering asking for a raise, understand that you are very literally asking to add a stressor onto their responsibility at work, that responsibility is indeed extrinsically enforced (by something/someone other than their own self), and that there is more to those numbers than what you see. They may already be digging into company savings to cover payroll each month. With that understanding, express it, give a solid reason as to why you deserve a raise, make a reasonable request, and be willing to negotiate and agreeable on an outcome.

Getting a raise is not impossible, it's just hard. You've got this.