I was managing a team of eight people. One day one of them came into my office and said they were within a month of tendering their resignation.
I had no idea what was happening, so I closed the door and began to unravel the situation. Obliviously my first question was, “What did I do"?”.
My team member was a victim of some very bad short-sided HR planning. HR had created a pay scale and percentage increase scheme that looked fair on paper, but it failed to have time periods for market adjustment. The scheme only planned for normal inflation, which is a joke for another time.
If you joined the company in 2010, your annual percentage increase was the same as if you joined in 2015. That seems fair right?
Except, that the cost of an engineer in 2010 was 50% lower than the same person in 2015. Meaning, as the years went by my team member was more valuable than the contract they held. Any job, even a job with fewer responsibilities, would now pay them more than the school was paying them.
I had to have three meetings with HR about this. I even met with the head of school. I collected salary data from numerous firms and schools as well. I demonstrated that the employee could walk out of the door today, and literally increase their salary by 50%-75% tomorrow.
I eventually won the battle, but HR was not happy. I had mathematically ruined their flat model for salaries. It was like a Steven Seagal victory moment.
Markets rates, taxes, and currency fluctuations matter tremendously. I have seen people take a 15% raise within the same school, only to earn nearly the same due to tax brackets. But, a RAISE means more work. So they had a new job with more work to do and they were earning about the same every year.
I have never been able to personally get a significant raise within the same school. I have always had to change jobs to get beyond a 15-20% increase in salary.
Many of you might feel that 15% is good, but when I started settings targets for my money, 15% was not even close to what I needed. Everyone is different, some people don’t set goals at all and do fine.
Changing jobs has always given me the best avenue for earning more money, because I have a target in mind before the hunting begins.
I will push the employer early on to reveal the salary range. I would estimate nearly 90% of the employers I have engaged with had no issue giving me this information well before third and fourth round interviews.
If you are job hunting, remember, the job needs to be a win-win. If the employer cannot give you a range for your position, that means they are only considering their position. That is a zero sum strategy, not a win-win strategy.
People often get nervous asking about money. I like to wait until the initial interview, and then wrap-up with the money question. If the first interview is short, and more of a touch-base, then waiting until the second interview is fine.
When I am finally asked if I have any questions, I deliver the money package:
“Thank you. I have a few questions. I know people often avoid discussing salaries, but I would like to confirm the salary range you have budgeted for this position. If you can’t tell me now, that’s fine, but I would appreciate a follow-up. I understand this is not an offer of any kind. I would simply like the information to help me compare my offers.”
Many jobs do post the salary range, but some only post the projected savings rate. Forget the savings rate. That number is difficult to calculate, and only applies to a fraction of any population of people.
Moving jobs can easily get you into a 20%-50% increase in salary, especially if you are taking on a larger role or going to a start-up school.
I know what you are saying, “Tony! I can just ask people on [INSERT SOCIAL MEDIA PLATFORM] and they will tell me about the salary. People know stuff!”.
This is highly flawed logic. You are assuming some stranger on social media, or even your actual friend, is good at negotiating. You are also assuming they are good at math and have the same priorities as you do.
Remember the story above, HR could have made some new changes to upcoming contracts that are better than the contracts current employees are on. Always ask about money for yourself and take this responsibility for yourself.
But! YOU LOVE YOUR CURRENT JOB. You want to stay. However, you need more money.
I understand.
So here is my advice, when you are being asked to re-contract, push for at least a 7% raise. If you are offered more than that on a re-contract, and your duties are the same, then it would be fair. I would take it and move on. Look at your housing etc. and negotiate things to keep your cost of living down.
Why 7% ? Most employers are going to try to give people a cost of living increase. This is usually based-on a belief that a person needs 3%-4% more every year to maintain their standard of living.
Most people never ask for additional money, and 7% feels good. 10% would feel like a big step, whereas 7% would feel reasonable.
The way people feel about money is important, even if it is ridiculous.
The best part about 7%, is that you can come down to 5% and still be above the planned 3%-4%. There is some room to move, and simply asking means you are more likely to be at the top of the scale.
I am not factoring in housing and other benefits. Just remember, unless your housing and other benefits are some how earning you additional income, they should not be counted as income (even though they are often seen as income on US taxes :( ).
If there are financial priorities in your life, use what you have learned at the job you love, and build a new job you love somewhere else.
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Why is this SubStack called, Pancake on a Stick?
Pancake on a Stick is the single funniest story I have ever heard in my life. In about a year from now, the event will be reenacted and recorded. I named the SubStack after the story, because every time I think of the name, I smile and laugh. This helps with my writing and tone, and makes me always remember the most important things in life.
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Most social media is dead to me, but you can find me on LinkedIn and Youtube.
LinkedIn (A bastion of boredom but mostly on mission)
https://www.linkedin.com/in/tdeprato/
Email
info@tonydeprato.com
My video series on Expat Recruitment is BORING but useful Listen or Watch and you can master this process.