It’s that time of year again
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Inflation is on the rise in the U.S., and the current annual inflation rate for the 12 months ending this September is 5.39%. In 2021, the inflation rate worldwide is already 3.5% higher vs. last year.
Compared to a year ago:
Gasoline prices have increased 42.1%.
Prices for used cars and trucks are up 24.4%.
Food prices are 4.6% higher.
Rent prices soared 9.2% in the first half of 2021.
Energy (e.g., electricity, gas) is up 8.5%.
The pandemic and global shipping crisis aren’t helping matters much either. The supply chain is stressed and causing shortages and delays in almost every consumer good you can imagine (e.g., electronics, cars, shoes, exercise equipment). This has created a ripple effect in the cost of used goods too (e.g., the availability and price of used vehicles).
As a result, in 2022, the Social Security Administration will boost the cost of living adjustment to the highest level in 39 years as inflation soars in the U.S. That will certainly help retired folks. Unfortunately, the income in millions of working households is not being adjusted to keep pace with inflation.
Why am I sharing all of this? Well, simply put, if your income isn’t increasing to keep pace with inflation and the growing cost of living, you’re falling behind. Today’s dollar is worth less than it was a year ago.
If you aren’t receiving a sizable raise that exceeds inflation, you’re actually making less money every year because the dollar isn’t as valuable. It’s as if your annual salary was reduced by thousands. And, due to the rising costs of almost everything, it is getting harder to make ends meet.
You must ask for a promotion or raise
Yes, you should always have a household budget and strive to reduce your expenses. You know that I’m an advocate for living more simply and curbing extravagant spending. That’s one reason I left the Bay Area of California.
However, that doesn’t mean that you shouldn’t maximize your earning potential at the same time. If you want to get ahead and live a better life, you must ask your employer for the compensation you deserve.
Some people are comfortable requesting raises and promotions every year (Note: You shouldn’t expect a promotion every single year). I had a few employees like that. But, most folks don’t like to push or pitch themselves. Instead, they hope their hard work will speak for itself, and their manager will do the right thing.
But, I’m here to tell you that waiting and hoping is a risky strategy. Not every employer looks out for their employees. Not every boss is going to fight for you.
Many employers try to keep their expenses down, and, for most businesses, salaries are the most significant expense. If an employer has many employees (e.g., Walmart has 2.3M employees), reducing raises by a few percentage points can translate to millions in savings.
I want you to get comfortable with having a conversation with your manager about your performance every year before the employee review process begins. For many companies, this happens in late Q4 and early Q1. If you wait until the decisions have been made, it is too late.
I also want you to feel good about asking for a promotion (and the associated raise) when you know you are performing at the next level and deserve it. I want you to feel confident asking for the raise you should receive every year to keep pace with inflation and cost of living increases.
Don’t feel shy.
Don’t be nervous.
Don’t feel “greedy.”
When you are providing value to your employer, you deserve commensurate compensation in return. And, if your employer doesn’t understand that, it’s time to find a new job with an employer who will pay you fairly.
Prepare for the conversation
Here we are in Q4, and the Fall weather reminds us that winter is coming. It is also a reminder that something else will be happening soon.
Your annual performance review.
Now, not every company has its annual performance reviews at the end of the year or the beginning of the next one. However, I know that many do.
I also know that most people put off writing their personal performance review until the last minute. Then, they scramble to gather information, ask people for input, and remember everything they did during the year.
Don’t be that person.
Start capturing information and notes for your review now. Doing this gives you plenty of time to prepare by spending a few minutes on the task each day.
Go back through your calendar for the year. Review the meetings that you attended. Doing this will jog your memory for a few activities and accomplishments that you may have forgotten.
Similarly, review your email inbox and other messages. Quickly scroll through starting at the beginning of the year, or search for key phrases. Most of the messages won’t be that useful or will look familiar. However, a few will jump out at you and remind you of projects, achievements, and other work you did during the year.
As you start writing your review, gaps will appear and help you create a to-do list of information you need to gather and conversations with people you may need to have. That’s normal. It sure is better to start this process now vs. waiting until it is too late.
A performance review is your opportunity to ask for that raise or promotion. So, capture as much quantitative data as possible to support your case (e.g., the project you worked on that increased sales by 23%).
Know your internal value (e.g., prepare several quantitative examples of how you’re helping the company succeed).
Know your market value (i.e., what your compensation could be with a new employer). For example, I once received a 50% “raise” when I joined a new company vs. the 5% raise my current employer had just given me.
You also need to understand what the expectations are for the level above you. Please tell me that your department has a levels and expectations document (e.g., a senior individual contributor is expected to demonstrate ABC and do XYZ)?
Hopefully, you’ve been focused on clearly performing at that level this year. It’s also essential to demonstrate proof that you are operating at that level.
It’s hard to justify a significant raise if no one is aware of what you are doing. Don’t expect your manager to take your word for it either. Have proof.
However, I stand by my belief that you still deserve a raise that keeps pace with inflation if your performance is meeting expectations. Don’t settle for less.
Of course, some of your accomplishments will have to be qualitative. That’s ok too. It helps to gather feedback from your coworkers. A few positive quotes always improve your review (e.g., “Susan saved our project from disaster. We couldn’t have finished on time without her help!”).
As I’ve mentioned in the past, bosses often forget all of the details of what you have accomplished. They don’t remember all of the work you did during the year. Writing your detailed review may make all the difference between a small raise and a much more significant raise or promotion.
I often talk with my clients about maximizing their earning potential during their long-term careers. To successfully negotiate raises and promotions — and you should be prepared to negotiate — you have to demonstrate that your value to the organization is continuously increasing.
In other words, if you continue to do the work you’ve always done, at the level of contribution expected for your current level, that is not enough. That is called “meeting expectations.” You may get a minimal raise as a cost of living increase (e.g., 2–3%), or you may receive nothing (which means your compensation is actually decreasing).
The business of your career
I wish I had known earlier in my career how important it is to treat your career like a business. This is what I recommend to all of my clients.
You can’t just put your head down and work hard within the walls of your company, hoping that a good boss will always recognize your contribution and value and commensurately reward you. You have to market yourself, just as a business markets its products.
The world needs to know that you exist!
I work with so many talented people who have virtually no presence online or at real-world events either. They are so busy working hard — and living their lives — that they haven’t bothered to put themselves out there. They haven’t spent much time networking, public speaking, or writing.
Like any business that wants to succeed, you need to market the “business of you.” Find ways to demonstrate your expertise and talent outside of the office. Show the world what you know and how you think.
This boosts your perceived value, generates inbound interest from potential employers (or clients), and shows your current employer that they have competition for your talent.
Being more visible is hard for many people, especially those of us who are a bit introverted. It requires that you find a way to share your knowledge and insights publicly.
Creating this content generates inbound interest in you. Being in demand is one way to always know your value and have negotiating power.
Some of my most talented employees, who were also good at marketing themselves, received unsolicited job offers every week. They didn’t have to hunt for work.
Jobs came to them, and they always knew their value. They weren’t shy about asking for raises and promotions because they knew they had options.
Note, I am not saying that they used job offers as leverage to threaten me. I highly recommend that you never use that approach with your manager.
Instead, we would honestly discuss and evaluate job offers they had received. We’d talk about the pros and cons of taking the offer vs. staying. Sometimes I had insight into that company and their potential boss and colleagues there.
If it genuinely seemed like a fantastic opportunity with no hidden “gotchas,” who was I to stand between them and a great chance to advance their career much more quickly than they could with me?
Be in demand
Asking for a raise or promotion is so much easier when you know that you are clearly delivering value above and beyond your current level.
You’re not asking for special treatment with a chance to prove yourself later. You have already proven that you are worth that investment.
When you are known and in demand, you are constantly receiving data that confirms your value. Putting yourself out there allows the right people to be aware of you and find you.
Sooner or later, someone will want to talk with you about an opportunity. There is nothing wrong with having conversations with people who are interested in hiring you.
It’s good practice to interview with the few that are of particular interest. If your current job, compensation, and career path all still seem great in comparison to something new, then, by all means, stick with your current job!
However, if your current manager and company don’t recognize and compensate you appropriately for your value — and a new company will — then it’s time to seriously consider an offer from that company. My most significant jumps in earning potential always happened when I took a new job.
But, don’t be hasty
The grass isn’t always greener, so take the time to evaluate any new opportunity deeply. You don’t want to be hasty and jump ship, only to regret it later.
I have always used a spreadsheet to compare different opportunities on dozens of factors quantitatively. It helps me remain a bit more objective, although emotion can’t help but play a role too. Sometimes you are really excited about a new opportunity or really upset about something going on in your current job.
Regardless of whether you decide to stay in your current job or pursue something new, you should be compensated appropriately for the value you bring to an organization.
When you know that you are delivering above and beyond your current job level, have an honest conversation about your expectations and ambitions with your manager. If you never ask for something, you may never receive it!
My Career Accelerator can help you
Members of my Invincible Career Accelerator have used the advice and support from the community to find better jobs and receive promotions. For example, one person received a 10x return on his investment in the Accelerator when he landed a new job with a much higher salary last year.
We all want to be compensated as much as possible for our time and effort. We all want to find work that we enjoy.
However, we sometimes get stuck and find ourselves blocked without a clear path ahead. When this happens, it’s easy to get tunnel vision and feel like there’s no way to escape a bad job or get paid what we are worth.
That’s why it helps to join a friendly and supportive community of people who have “been there and done that.” We can help you explore options, prepare for your job search, practice job interviews, and hold you accountable for making progress.
The weekly check-ins and the accountability to the group have helped many people overcome obstacles. More importantly, it encourages you to invest in yourself and your happiness and fulfillment.
If you are feeling stuck and nothing is working, lean on us and let the community help you break free. ➡️ Learn more about my Career Accelerator.
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This week’s office hours topic
Larry Cornett is a leadership coach and business advisor who hosts a private mastermind community for ambitious professionals with weekly challenges, office hours, and 24×7 support. If you’re interested in starting your own business someday (or accelerating an existing one), check out his “Employee to Solopreneur” course (launching in 2022).
Larry lives in Northern California near Lake Tahoe with his wife and children, and a gigantic Great Dane. He does his best to share advice to help others take complete control of their work and life. He’s also on Twitter @cornett.