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I joined my current employer almost two years ago. They usually offer pay raises once a year.
After my first year I was offered a very moderate pay raise of 5% while being offered a leading role in software development. "Let's see how this will turn out" I was told.
Now with the next annual pay raise talk coming up, I am unsure of what to demand.
I think my work as the lead developer (which I de facto had already been doing 6 months before my first pay raise) was very good, if not extraordinarily good. As a result of that I got transferred to a new department earlier this year. There, they wanted me to build a completely new software from scratch which I currently am doing and doing well. I don't have a team any more in that position.

By changing the department I got a different boss, too, who is not familiar with my field, but still in software development.

I feel underpaid at the company and would now like to request a really high pay raise. I am also about to be eligible to become a senior developer and would like the company to honour my accomplishments in the last 1.5 years + my becoming a senior in the future.

Can I have both factors be a topic in the talk? How can I tell/convince my new boss of what I achieved in the previous position (the old boss left the company btw)? Can I request a pay raise of 20-25% or would that seem offensive?
My qualifications are pretty exceptional for that company and such a pay raise would definitely make me one of the highest paid developers there. The company is rather young and there are only few senior developers around.

Joe Strazzere
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8192K
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    possible duplicate of How should I properly approach my boss if I'm feeling underpaid? – IDrinkandIKnowThings May 11 '15 at 18:47
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    I think the accepted answer for that question is VERY applicable to this question. – Brian May 11 '15 at 18:51
  • @Brian I don't think so. THe answer is US-specific and deals with the economic crisis. If possible, I'd like an answer which can be transferred to the current situation in Germany and for a company which is doing very good economically. – 8192K May 11 '15 at 18:52
  • @Sebastian Only the first paragraph even mentions the economic climate. The rest still applies - explicitly lay out what you have done and what value you have added to the company. – David K May 11 '15 at 18:59
  • @DavidK OK, then the real question should actually be: Can I request a high pay raise if all my accomplishments are taken into account and if I want to become senior developer at the same time. Or will one of the two not make it into the pay raise? I simply don't want to have worked "for nothing" for the last 1.5 years and "only" get the senior promotion. – 8192K May 11 '15 at 19:02
  • @Sebastian If you want the title Senior xxx ask for it as well. At least in my region of the US titles mean very little between companies and pay is what is more important. – RubberChickenLeader May 11 '15 at 19:33
  • pay raise of 20-25% or would that seem offensive - offensive is a rather strong word :p , I don't tink he'd spit out the coffee he's drinking. But let's face it , 25% raise is NBA salary – Caffeinated May 11 '15 at 19:35
  • @Sebastian, can you is going to be very company specific, and thus off topic here. – IDrinkandIKnowThings May 11 '15 at 19:35
  • @WindRaven I get the impression that Germanys a bit more by the book when it comes to titles - and in this economic environment 5% is a good pay rise – Pepone May 11 '15 at 22:17

2 Answers2

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Anytime that you are in the tech field especially (this applies to some other fields too) there is a huge amount of chance taken on by the employer in that they are unsure of your skills. There isn't any governing body that tells the employer, John is a great developer.

So they usually pay very low at the beginning. I have hired really really good developers out of college and paid them 35K a year. Think of it almost like the NFL or MLB when owners get to pay great young players the minimum because of their rookie contract. That doesn't mean the player is bad. It just means that is what they were paid.

Also just like my NFL/MLB example you pay for talent. So take two baseball players with same rookie contract - Player A hits .230 with 10 HRs and Player B hits .290 with 34 HRs. There is a good chance Player A will see very little raise (and could get demoted) and Player B could end up making 10 times as much a year than he was making. Note that it doesn't matter that these players aren't 10 year veterans when they ask for their raise.

Well you aren't in MLB so the 10 times your current pay is out, but luckily unlike MLB you probably don't have a 3 year rookie contract.

That means once you show your worth to your current company you deserve to be paid at least how much they would pay someone coming off the street with your skill level. And since you are proven and having understanding of the company and projects I would think the average salary is just a starting point.

As a manager of developers it was very normal for me to give a developer who was with us 1.5-2 years a 20-40% raise - and a few times even higher. And this all depends on what I hired someone at. If it is 35K - which I know seems very low but it works - I have given some developers 50% raises before the two year mark. I know other companies will pay them 50-60K a year so I want to match that.

How do you handle this? Be honest with your boss. Since your boss isn't in your field (not sure how technical he is) you might need to educate him. You need to figure out where you would be hired in at in your company and other companies for your skill level. Then find the salary ranges based on position, tenure, competency, and region.

Then you have to come up with a number. So let's say that you are making 45K a year and your position makes 60K a year normally in your region/industry - middle of the range.

You don't want to come to your boss demanding 60K. You probably want to say something like, "Hey BOSS, I really think I am underpaid. I feel that I am a high contributor and do XYZ. I see that my current expertise and position would normally pay me 65K. I know this isn't in the range of our normal yearly raises so how should we proceed?"

This does two things. First it isn't demanding anything and it let's your manager feel a bit in control. Second you are giving your manager padding to work with (you want 60K but said 65K).

Your manager will work with his boss and HR. They will determine what your value is and how to deal with your case. Even if you are worth 70K they might not give you 55K. Also having a non-tech boss could really help or hurt you.

You can go back and forth a few times to get to an acceptable level but if they give you a final offer you basically have to take it. If you don't like it then you start looking for other jobs. But know that when negotiating it isn't how much you are currently making but is your replacement worth to their company.

blankip
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  • I do really like blankip's approach with taking this to your boss. Ultimately they will play a key role in your raise (or lack there of) blank is correct though depending on the role large raises aren't unheard of. Where I work we hire what would be considered senior developers at most places, even then sometimes people get a pretty healthy raise as they demonstrate more value than anticipated. (Basically the more valuable you are to me, and the harder you are to replace, the better leverage you have to get a raise) – Eric J Fisher May 11 '15 at 19:30
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    ++ I like the anecdote. Also, what hadn't occurred to me was how you gently pass on the news that "normal" raises won't cut it. – Nathan May 11 '15 at 19:38
  • Great post , like the idea of saying 65K when aiming at 60K – Caffeinated May 11 '15 at 19:38
  • @NathanCooper - I would usually tell really good employees to bring this up outside or before their yearly review/pay raise time. If they do bring it up then - yearly reviews - it could be detrimental to the team. If I give really good employee A a 20% increase then I have to lower the increases across the board for the rest of the team. – blankip May 11 '15 at 19:48
  • @Adel - And as a good manager you might want to cleverly suggest to the employee to ask for more than they want. Some employees have big mouths and you have to word it right but it is really really hard for me as a manager to go to my boss and demand the full monty for an employee's request. Now if I look like I can "save" my boss 5K then we are good to go. How would I word it to my boss... "Ray is easily worth, 70K on the open market. He asked for 65K. How about I work him down to 60K? Are we all happy with that?" – blankip May 11 '15 at 19:51
  • @blankip First of all, thank you very much for taking that much time to write a really good answer! Second, I'd like to thank you to give me a really decent approach of how to talk with my manager. I think I'll do it like that. +1 – 8192K May 11 '15 at 20:34
  • @blankip I suppose because there's a fixed budget for raises? I'm not really sure how you'd go about raising the issue of pay outside of the ""performance"" review. – Nathan May 17 '15 at 22:23
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What can you get elsewhere? 5%, 20%, 50%, who cares, you can't pay your bills with the gradient. It's unfortunate that companies see the world in this way (I don't believe all do, how on earth would you retain junior devs with 5% raises!?), and it's a highly related unfortunate fact that 2-3 years is a typical amount of time to stay in a job.

I'll be looking at this from your side shortly, but it's up to you to emphasis the value you're delivering. So, you need to emphasize the clear link between you and the money flowing in (and all permutations of that fundamental question)

But when it comes down to it the dirty secret is that you need to evaluate what you feel is fair, which is based on the economy (strong), your value (high) and your willingness/ability to leave (?). So the portion of your question not answered by the question commenters have already linked you to is here: How can I determine a reasonable salary to ask for?

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Nathan
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  • I will say "Your willingness to leave" should also consider your "Ability to leave" if there are other opportunities to go for right now and your boss knows it and you're prepared to make that leap if you don't get what you want you're on negotiating high ground. Now if you're in field that has low demand, more applicants than jobs, or are unwilling to quit if you don't get your raise your ability to negotiate is effectively hamstrung. – Eric J Fisher May 11 '15 at 19:23