Pay raises don’t always come automatically. I had to learn to ask – and to keep asking

A few years ago, I was stuck in a financial rut. I was doing everything right: I tracked my expenses religiously, avoided unnecessary spending, and took advantage of almost every cashback or savings hack I could find. And yet, no matter how much I tried to save, my bank account wasn’t growing as fast as I had hoped. 

That was when I realised something crucial: Frugality is important, but it has its limits. After all, there’s only so many dollars you can cut before you hit a wall. But once you learn how to increase your earnings, the sky is the limit.

The real game changer isn’t how much you save – it’s how much you earn. 

The fastest way to increase your earnings isn’t necessarily through investing (which takes time) or starting a business (which carries risks). For most of us, it all starts with learning how to negotiate for a higher salary.

DON’T EXPECT A PAY RAISE IF YOU DON’T ASK FOR IT

For years, I had believed in the common assumption that hard work naturally leads to rewards: Promotions and pay raises. 

But in reality, raises don’t always come automatically. Many of us people feel underpaid simply because we never ask.

I have a friend who is great at her job. But her employer – a multi-national conglomerate with thousands of staff in its Singapore office alone – is grossly underpaying her for the value that she contributes to their team. 

And they get away with it because my friend never learnt (and is too afraid) to ask for what she’s truly worth.

HOW DO I KNOW HOW MUCH TO ASK FOR?

Some companies have fixed criteria for what it takes to be promoted, and each job rank comes with a corresponding pay grade. This generally applies to the military and the public sector – but if you’re an employee in the private sector, you will need to learn to fight for your own salary.

It can sometimes be difficult to know exactly what you’re worth. 

The bad news is, there’s no universal rubric or metric – your “correct” number doesn’t exist. 

The good news is, you can therefore get any number within reason – as long as you can prove your value and contributions.

Of course, such reason should take into account your job seniority and the industry that you’re in. For instance, an account executive in an advertising agency will never be paid the same amount as an account executive in a software firm. (In today’s climate, the difference between both can be as high as S$200,000 annually.)

To get a sense of how much you can potentially ask for, speak with your colleagues (if they are willing to share) about their salary, and benchmark it against job listings on the open market similar to yours.

So that’s exactly what I did. I pushed aside my fears of rejection and approached my boss to negotiate my first pay raise.

PREPARE YOUR CASE

But this isn’t just a matter of guts and glory. Your boss isn’t going to give you a raise just because you want one. You need to be able to prove that you deserve it and communicate your value clearly. 

Most people make the mistake of saying they need a pay raise because their expenses have gone up, or they need to pay for extra services and care for dependents, and so on. 

But the company does not care about your personal situations. They need to take care of their bottom line, of which your salary is a part of.

Instead of focusing on your personal reasons, highlight your contributions: Key performance indicators met, new clients brought in, significant cost savings through efficiency improvements, or additional responsibilities you took on when your colleagues went on leave or got laid off.

When I finally asked my boss for a raise, I didn’t just say, “I work really hard, and I think I deserve a raise.”

Instead, I said: “Over the past year, I’ve taken on additional responsibilities, successfully led Projects X and Y, brought in new clients like A and B, and helped the company achieve this amount of revenue. Based on my contributions, I’d like to discuss increasing my salary and progression pathway to reflect my value to the company."

My boss was taken aback – but he agreed that I had made a strong impact. I walked out with a 50 per cent salary increment that day.

To strengthen your case further, you can gather testimonials from clients and co-workers. 

One of my friends, Sarah, was working in a customer service role and consistently received five-star reviews from clients. Before her salary review, she printed out all the positive feedback and presented it to her manager. 

The result? A 15 per cent pay raise.

PREPARE FOR REJECTION

The reality is, you could come prepared with all the receipts – and your boss might still say no. 

I understand this fear very well. What I shared above sounds good – but the truth is, this was my second attempt at requesting a raise. I’d been rejected once before by a previous employer.

But that’s not necessarily a bad thing. A refusal opens up an opportunity for you to ask for what specific improvements they need to see before considering a raise and revisiting your request in a few months’ time, or in the worst-case scenario, look elsewhere for a job that will pay you what you’re worth.

For me, hearing a “no” from my first employer eventually led me to a better-paying role elsewhere. Had I given up, I wouldn't have gotten my 50 per cent hike at my next attempt. 

And once I learnt how to negotiate, I had to also learn to keep doing it – usually every two years or so. Today, I earn five times what I did when I first started working. 

If you never ask, you’ll never know. Worst that could happen is that your boss might say no – but what if they say yes?

Dawn Cher, also known as SG Budget Babe, has been running a popular blog on personal finance for the last 10 years.