Personal Finance

Here's how to ask for a raise

Key Points
  • With a strong labor market, it's a great time to ask for more money. But it's up to employees to make the first move.
  • Here's how to negotiate a pay increase successfully.
Salary negotiation
Salary negotiation

It's a good time to ask your boss for more money: The job market has the lowest unemployment in 18 years, starting salaries are better and wages are finally picking up.

"In these conditions, the employee is in the driver seat," said Alison Sullivan, a Glassdoor pay trends analyst.

But often, when it comes to getting a raise, it's also up to employees to take the initiative, added Michael Erwin, a senior career advisor with CareerBuilder — and that's where most workers falter.

"Asking for a raise or promotion is worse than public speaking," he said. "People just don't know how to do it."

To be successful, Erwin advises workers follow these steps:

Plan ahead

"Raises are won in the month before you ask," he said.

"Lay out some goals that have quantifiable numbers, then keep track of your successes," Erwin said — including sales figures you've hit, new clients you have brought on board or additional responsibilities that you've taken on.

"Show them that you've moved the needle for the company forward and you are an asset for them," he said.

Do your due diligence

Research what an appropriate pay increase would be, using sources like Glassdoor's salary calculator or the Bureau of Labor Statistics as a guide. Also, have conversations with people in your network with similar backgrounds.

These tools can help by measuring your pay against your experience and position and comparing it to the wages of other people in your field and give you a starting point for negotiations with your boss.

Be realistic

Erwin advises employees to begin with a monetary range in mind. But be realistic, he added: "It's probably going to be hard to go in and ask for $20,000, but easier to get $5,000."

If even that seems unachievable, consider lobbying for a boost in benefits instead, such as reimbursement for transportation or child care, and more paid vacation.

"That will put more money in your pocket in the long run," Erwin said.

If at first you don't succeed…

Don't be discouraged if you hear "no" at the outset. Establish a time frame for when you can revisit the topic, Erwin said.

In the interim, work on how you can demonstrate your achievements. "Build yourself a business plan and come back in six months," he said.

Most companies make salary adjustments in the back half of the year, Erwin added, which makes this a good time to speak up.

"If you start the discussion now, that's a good way to plant the seed," he said.

"On the Money" airs on CNBC Saturdays at 5:30 a.m. ET. Check listings for air times in local markets.

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