How to Negotiate a Big Raise
How to Negotiate a Big Raise
…and take charge at your Semi-Annual Review
Many employees are having their summer semi-annual review about now. It has been proven that the consequences of not being prepared for your annual review will cost you more than $1 million in lost compensation and promotions over a professional lifetime.
With a little bit of knowledge, you can fight back. Our annual salary survey this year is showing the overall percentage increase for compensation for combined P&C/Employee Benefits for producers and account managers to be less than 3%. And I know for a fact that all of you are working your tails off – employers are squeezing more out of you now than ever.
One example: I have been informally coaching one particular commercial lines account manager since 2017. I can set my watch by her because she calls me exactly 30 days prior to her annual and semi-annual review each and every year to strategize with me her next annual review meeting. Why do I help her?
Because she is one of only a few who takes the time to call me for help. I don’t mind telling you that she is prepared for war during her annual reviews and she usually gets most of what she asks for. She methodically approaches each annual review meeting as if she is going into battle! She has been promoted four times and, per my notes, she has gone from making $51,250 to more than $108,250 during this time. Not bad for just seven years. That is an annual increase of more than 12% annually.
So where do we start?
Your annual performance reviews. In your next review, make sure you inquire about: 1) additional compensation, 2) taking on more responsibility, and 3) how to keep your career progressing vis a vis performance benchmarks. Minimum questions to ask should be at least:
- What is the path to advancement? Find out what the expectations are. Write down the specific steps one has to take to get to the next rung on the ladder. Always be thinking of getting to the next level – and know what the requirements are. Find out what certifications you can obtain that would make a difference – CIC, ACSR, etc.?
- What specifically can I do to positively impact this company? Ask your boss what YOU can do specifically to help get your company from good to great…or maybe from bad to good – you get the point! The important point here is to get specifics on how you can personally drive positive change in your company.
- What areas did I perform above and beyond the call of duty in? Have your boss tell you specifically how and why you had a positive impact on the company. Press him/her. Make a list. This is very important because you always want to be focusing your efforts on those things that you do very well.
- How can I improve? Don’t be afraid to ask this question…I know it hurts sometimes, but this is a critical data point to get. You want to minimize your weaknesses and put all your efforts into what you do well. Better to find out now. Specific areas of improvement can also be included in your performance-based benchmarks that related to bonuses, etc. More on this below…
- What are the specific goals and objectives for me to achieve in the next year? This is a key part of the conversation. You want to have a specific list of quantitative and qualitative expectations for your specific position. In a perfect world, you will have a list of specific benchmarks and KPIs (key performance indicators). Make sure you discuss and mutually agree on these. Don’t just accept them – discuss and agree on them. Then read them at least once per week and personally track your progress.
So how exactly do I negotiate a Pay Raise??
According to a recent Mercer Consulting Group salary survey, pay raises for the foreseeable future will not keep up with inflation. This makes it even more important to negotiate smartly.
Here are five things you can do to negotiate a pay raise:
- Personalized Goals: As discussed, come up with a mutually acceptable list of performance metrics/benchmarks during your annual review – and then beat them. Review them every day. Exceeding agreed upon goals = bonus $$ so make sure you tie your metrics to a specific bonus amount. Once again, what about professional certifications?
- Never too late to ask for an informal review: If you are more than six months away from an annual review, ask for an informal one. Trust me, just do it.
- Lock & Load: Gather all your data, specifically, with regards to your mutually agreed upon benchmarks and performance metrics from the review period. Make a list of all the “above and beyond the call of duty” items you gleaned from your boss during your annual review session. Review it so you are fluent in it. Most likely, your boss will arrive to the meeting completely unprepared…arriving from another long meeting.
- Do your Research: Call me! I have all the data you need regarding insurance salaries for account managers and producers for the DC region. And then do your own research – there are many online pay charting systems to gather data.
- Role Play & Script: This is a very important meeting – probably one of the most important for the entire year. Role play and script out what you are going to say. Yes, chance really does favor the prepared mind. If you have control of the information, you will win this negotiation with your boss. And, yes, there is always a winner and a loser in a negotiation. A “win-win” is for losers. Total cliché.
- Base versus Bonus: This is one neglected area of compensation. Don’t just focus on the base compensation because in many cases this is set by Human Resources for each position, BUT bonuses are, in most cases, different. In other words, take some of the “above and beyond the call of duty” items and tie them to specific bonus amounts.
- Never make the first offer: When discussing specific compensation, never be the first to make an offer or suggestion. If you do, you have just negotiated against yourself. Don’t do it.
- Get it in WRITING: Verbal representations are worth zero. You always want to get any promises in writing. Worse case, put it in writing yourself and present to the boss. Otherwise, he will procrastinate and get a case of memory loss.
Stop procrastinating and get in the fight. Get that review and raise that you deserve. So why do most hiring authorities (that are not my clients) dislike head hunters? Well, now you know.