Benchmark your way to a raise
A little chutzpah goes a long way
February 16, 2012 at 12:34 AM
5 minute read
The original version of this story was published on Law.com
There is a time and a place for everything. That phrase certainly applies to the advice I'm about to offer.
Most of us are uncomfortable, and correctly so in my opinion, asking friends and relatives any variation on the rather personal question, “So, how much money do you make?”
But what qualifies as polite in one context may translate into a missed opportunity in another. Specifically, I highly recommend that you reach out to peers at other companies and ask them, in some detail, how much they make. I do it all the time as part of doing my job effectively as a recruiter, and most in-house attorneys are happy to entertain the conversation. They want to know what I know, and vice versa.
I suspect many of you are cringing at the previous paragraph. You may deem my suggestion inappropriate; more likely, you simply find the idea uncomfortable. If so, you also will find yourself at an information disadvantage when you sit down with your boss, and/or perhaps HR, for a discussion about your compensation.
Corporate earnings are generally pretty strong these days, thankfully, but you may have been working for the past few years in a pay freeze or cost-of-living-increase-only type of environment. Are you ready to make the case for a real raise—say 10 percent or more—that might even require a promotion to your company's next grade level?
Don't approach the raise conversation from the simple premise of, “I work hard, add value to the team, and (insert reasons here) I deserve it.” Your company expects performance, and the institution is of the view that you are being compensated for it. Here is what moves the HR machine to act: when they can prove that you are underpaid relative to your peers at other companies.
Compensation culture at most companies is centered on a desire to pay the average, “at market” price for the position you hold. Leadership, at the CEO and VP of HR levels, does not want to underpay professional headquarters staff. They don't want to overpay for a position, but at the same time, they definitely want to avoid the internal perception that your company pays below market. Accordingly, your company spends tens of thousands of dollars per year on benchmarking surveys and customized benchmarking reports across multiple job titles and areas of expertise. Your company looks for any data that will confirm what it wants to know, and usually finds it. I'm not accusing anyone of lying or conspiring, but I am pointing out that an agenda is at work. So, if an apples-to-apples comparison is unavailable, then the most favorable (for the company) apples to oranges benchmarking data will suffice.
Several attorney-specific benchmarking surveys come out annually, and summaries of such surveys are featured on occasion in InsideCounsel. Complete or customized survey results are costly, and they always are based on questionnaires that were completed months ago. Since some information is better than none, do arm yourself with survey summaries if you are unwilling to heed the advice that follows. At the very least, you will demonstrate that you are serious about the compensation discussion and have done some homework on your fair market value.
My advice is to do better homework than your employer. It costs nothing, and it forces your boss or HR to consider current apples-to-apples information. So, for example, if you are a securities attorney in Cincinnati, call securities attorneys at other publicly traded companies in Cincinnati. You should try to get as close as possible to the same industry, company size, experience level, etc. The comparison will never be identical, but you can come pretty close.
If you have the chutzpah to make a few of these calls, then the collective information will be more valuable versus a single comparison. If you can tell your employer that others in your role earn $20,000 more in base salary, and $60,000 more in total compensation, then you are speaking an effective benchmarking language that your company may act upon.
How do you ask someone what they make? It's easiest of course if you know your peers and network with them—something you are hopefully doing for other reasons as well. Nine times out of ten, though, even a complete stranger will respond to the inquiry. You have to candidly preface the purpose of your call. You can even reference this column if that will make it easier for you to do so. Volunteer your compensation up front—it's an exchange of information. Your peers crave this transparency, too.
If it turns out that you are not underpaid for the role that you hold, that's still powerful information. It means you must focus your internal raise request on a grade level promotion, or a push for additional responsibilities that would align with a higher salary benchmark.
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