How to Ask for a Raise When You Are Underpaid

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Do you feel underpaid? With data indicating that the average U.S employee is underpaid by 13.3% (or $7,500), you might be right!

As a young professional, perhaps you challenge yourself to learn, put in long hours, and make several sacrifices—all to take your company a step ahead and make more money. But about those extra efforts and accomplishments at work…do you feel like they’ve been compensated for reasonably?

When you are working hard and providing value to your company, it’s only fair you reap the maximum fruits of your labor. 

So you might be asking: How do I ask for a raise when I feel underpaid?

You don’t want to come across as pushy or desperate. But again, don’t just sit back and watch the situation escalate. Taking that single step could mean more money in your pocket, financial freedom, and a renewed journey towards a fulfilling life. 

This post will teach you how to negotiate a raise the right way. Also included is a “how to ask for a raise when you are underpaid” example for your inspiration.

Let’s start with figuring out if your current paycheck measures up.

How Do You Know You’re Underpaid?

Often, the clues are within your reach. Here’s how to tell if you aren’t paid enough:

Evaluate Your Salary History

One of the most critical steps to take if you are underpaid is to analyze your salary growth. 

Chances are you might have left some money on the table if you didn’t negotiate your starting salary. That’s because recruiters suggest an initial offer based on the expectation that a candidate will negotiate for more compensation.

Keep in mind that the dollar’s purchasing power fluctuates over time. So, you also want to check if your salary accounts for inflation. 

For example, 2021’s rate of inflation averaged 3.55%, according to the Bureau of Labor Statistics. If your remuneration hasn’t increased by a similar rate, you’re earning less than you should.

Research Typical Salaries in Your Region and Industry

You can always check your market value on Glassdoor and Salary.com. These websites provide data on the average salaries people earn at various companies and in different cities across the U.S.  If you take home less than the salary estimate provided, you’re likely underpaid.

Ask Your Peers

Another way to know if you are underpaid is to consult with a coworker – preferably someone in your department. 

Does the idea feel intimidating? Just remember that the law prohibits employers from banning pay discussions at work. But considering the sensitivity of the matter, I recommend approaching someone you know well in a low-pressure situation.

11 Signs You Are Underpaid

Does any of the following statements strike a chord with you? 

  • Online average salary data and calculator suggest you’re underpaid
  • You are earning less than your peers holding a similar position
  • Your responsibilities have increased without any or reasonable increase in your compensation
  • You haven’t received a raise despite an impressive performance review
  • New roles that demand less experience than yours pay more 
  • Your pay has remained flat for long
  • Newer team members are receiving salary increments while you don’t
  • You haven’t received a raise despite your company making more money
  • You receive tiny pay increments that hardly account for your growing expertise and skills
  • Your coworkers are receiving holiday bonuses or performance bonuses—but you’re not
  • Your salary doesn’t reflect that your career is highly specialized or in high demand

When to (and Not to) Ask For a Raise

The last thing you want is to bring up the discussion about a salary raise at the wrong time and risk upsetting your boss or the budgeting process at your company. 

Below are circumstances where your employer or manager is likely to consider your request: 

  • You’ve scored a good performance review
  • The company is performing well financially
  • Your responsibilities have increased

But when is your employer likely to reject your request for a pay raise? If you can relate to the following situations, please wait for a better opportunity to bring up the discussion.

  • Your company is struggling financially
  • There’s bad blood between you and your manager/boss (Fix the mistrust  first)
  • You’re a new hire (wait at least 6-12 months)

How to Ask for a Raise When You Are Underpaid

Salary negotiation can be a nerve-wracking experience for any professional navigating the early years of their career. We may feel uncomfortable being assertive, and self-promotion can feel downright awkward. And it’s not surprising that 57% of American workers have never requested a raise in their current job. 

So, your research indicates you are under-compensated. Here’re six steps to how to ask for a raise at work like a pro: 

  1. Learn about your company’s policy on raises
  2. Develop a game plan
  3. Pick the right time for the discussion
  4. Be confident yet appreciative
  5. Be prepared to negotiate
  6. Prepare for rejection

Learn About Your Company’s Pay Adjustment Policy

Take some time to learn about your company’s compensation practices. Ask your peers if they have ever received a raise and what the process was like. Then, find out if there are any internal guidelines you must follow when negotiating your salary. 

Develop a Game Plan

It helps to step into a salary negotiation with the right mind frame. You are not begging for more money; you are making a business case for why your company should pay you more.

Start with knowing the exact salary increase you deserve. Next, prepare the evidence that supports your request. 

For example, if you’re asking for a pay increment based on additional responsibilities or more working hours, gather statistics that support your claim.

If it’s about accomplishments or wins, prove how your contribution benefited the company. Think about times when you helped the company save money, increase revenue, or improve processes or systems. 

Choose the Right Time for the Discussion

Never negotiate your salary in high-pressure situations. 

If things seem super busy at the moment or your manager is going through a hard time, wait until things slow down. 

I highly recommend targeting happy moments, for instance, when your boss hits a milestone. Yes, compliment them first, then ask for your raise as part of that conversation.

Be Confident (And Thankful)

Practice asking for what you want with complete confidence in your worth. That means preparing facts about your accomplishments and communicating them with conviction. But take care not to come off as egotistical. 

It’s also important to express your appreciation for the level of trust your boss has placed in you. And once the meeting is over, thank them for their time and attention.

Be Ready To Negotiate

Your manager may have immediate concerns or objections they’d like to address first. It’s here you must think like an attorney. 

Think through some of the common objections and how you might respond. An example could be, “I understand the economy is bad now. But our company performed exemplarily in the past 7 months, and I think I’m an integral part of why we’re defying the tough times.”

Because 84% of raise requests are successful, your chances are pretty good. 

But what if a salary increment is totally out of the question?

If so, consider something else delightful. Perhaps a bonus or incentive program? More vacation days? Whichever your idea, let your manager know.  

Prepare For a “NO!”

Regardless of extensive preparation and compelling presentation, there are chances your company might dismiss your raise request.  It could be for several reasons. For example, you might be focusing on the wrong areas, or your company’s budget can’t accommodate your request.

So what next?

  • Keep calm: It’s natural to hurt when your request gets declined. But you’ve got to fight the impulse to respond rudely, enter into a screaming match, or badmouth your employer.
  • Focus on the future: Put the rejection in the rearview and start fixing the weakness areas that compromised your raise request. 
  • Follow up: You can arrange with the manager to revisit the subject at an appropriate time in the future.
  • Find a new job: If you’ve exhausted all possibilities to no avail, it might be the time to jump ship.

Example of What to Say When Asking for a Raise if You Are Underpaid

Wondering how to phrase your opener? Take some inspiration from the following sample of how to ask for a raise when you’re underpaid

“ I’m grateful for this opportunity to have this dialogue with you. I’m excited about my current role, and I hope to continue growing my responsibilities and achieving more for the company. Accordingly, I wanted to touch base with you about my compensation.

I’ve worked on plenty of projects that have improved the company’s bottom line. For example, last fall, I was in charge of our biggest client event to date. Attendees rated the event 8.5 out of 10—the highest we’ve ever had! Since then, lead generation has jumped 15% over last year’s, not to mention a 27% increase in revenue. 

Based on this argument, I hope to build a conversation around increasing my annual salary by Y% to [desired income]. What do you say? ”

Summary

Getting that raise often lies in preparing facts. Conduct some research and collect the statistics that will help you make a compelling case for more salary. Keep in mind the strategies we outlined above and take that leap!

But remember that some factors are beyond your control. From how the economy is doing, the kind of relationship your manager has with the boss, to the political climate, all could positively or negatively influence your chances. So, approach the matter with an open mind. 

And when you score that bump, don’t forget to follow up with your manager with a thank-you email.