In my Q1 2021 Financial Update, I revealed that I internally negotiated a 25% raise in salary.
Today, I will be sharing the details on what I did that resulted in the largest jump in my W-2 income since entering the workforce 5 years ago.
Introduction – Have You Been In This Situation?
For those new to Time Value Millionaire, my name is Matthew and I work as a Project Manager for a company with +100,000 employees. It is the textbook definition of a bureaucracy.
Despite consistently busting my ass, my performance has never translated into a significant bump in pay.
So I decided to do something about it.
Despite it being easier to get a pay increase by switching companies, I opted to negotiate for a higher salary at my current company for the following reasons:
- My Accumulated PTO Accrual Rate (PTO is based on time served with the company)
- Work Life Balance (I work 9/80’s – every other Friday off)
- I didn’t want to have to ‘prove myself’ all over again
Fortunately, I was successful. As a result, I wanted to share how I was able to internally negotiate a 25% raise in salary.
Know The Playing Field
When I first started, my primary responsibility was creating daily status reports for company leadership.
And there were a lot of reports.
There were so many reports that I was creating these reports for 9 hours a day, 4-5 days a week.
It wasn’t the sexiest job in the world. However, I was a college hire – what did I expect?
Everyone was telling me that I needed to “put my time in” and that things will inevitably improve.
So for two years that’s what I did. The result?
The job did not get any better
However, I did pick up on two important realizations:
- There was little to no critical thought required and felt like I wasn’t creating any real value
- There were higher level project managers doing the exact same thing that I was doing
Engaging in office politics seemed the fastest way to “grow,” however I knew that path wouldn’t help me find fulfillment in my life.
It was around that time that I stumbled on this post from FourPillarFreedom. In the post, Zach talks about the idea of learning hard skills to grow your income. I 10/10 recommend checking it out.
Reading that post made something clear: I saw what everyone was doing, but more importantly I saw what everyone wasn’t doing.
I knew what I needed to do.
Understand Your Value
Most of the project managers (including myself) were doing the same thing: manually building status reports via excel.
If you don’t work in excel on a daily basis, it does have a small learning curve. However, it is more or less an easy tool to pick up.
This fact resulted in a third but more painful realization: I was 100% replaceable.
The reality was that there was nothing special about my position. If you knew excel, you could build the same status reports.
This didn’t set well with me.
So instead of engaging in office politics, I used that time expanding my skill set.
I learned basic database architecture, data automation via SQL, and how to create interactive visualizations using Tableau.
I then leveraged these new skills to build a system that automatically generated all the reports that my department was responsible for.
This new system resulted in:
- Reduction in labor costs associated with reporting (no one was fired, they were reassigned to different projects)
- Interactive dashboards that allowed leadership make more data driven decisions
Between those two factors, this system saved the company over $10,000,000 last year.
That’s right, $10,000,000.
I went from a 100% replaceable employee to a slightly less replaceable employee (in the end, we are all replaceable).
However, here’s the kicker… I still only received a 3.00% raise last year.
To summarize my management’s rationale:
You are doing great things. However, you aren’t performing the company’s definition job of a project manager. Therefore, we had to give you a lower raise relative to other project managers who are doing ‘real project management work’
Management
To say that I was livid is an understatement.
Prove That Your Worth It
Despite saving the company millions of dollars, I only received a 3.00% raise.
Something needed to change.
I decided to apply to another position within the company.
During the interview, I explained my skill set and how I could bring value to the department.
A month later, I was contacted with an offer for a 3.00% raise in my current salary (gosh damn it).
At this point, I was completed deflated.
Before replying to accept the offer (it was still a raise), I noticed another position pop up in a different department.
I decided to apply and was surprised when the recruiter contacted me immediately to set up an interview for the next day.
The interview went well. I spoke confidently to everything that I did for my previous organization and even shared some of my favorite dad jokes.
“How do you catch a unique rabbit? … You unique on it”
Time Value Millionaire
Despite feeling good about the interview, my expectations were still low.
45 minutes after the interview, I received a phone call from the recruiter. She mentioned that I left an impression on the interviewing managers and that they refused to interview anyone else.
She proceeded to say they wanted to make an offer that represented a 15% raise from my current salary.
I was flabbergasted.
Channeling everything I learned from Pawn Stars, I countered at 31%.
I will admit that was aggressive on my part. However, I justified my counter offer by saying that they were unlikely to find someone with same skills internal to the company.
They came back at 25%. I accepted.
Final Thoughts
There are a lot of challenges associated with internally negotiating a large salary bump.
However, I’m happy to report (not via excel) that it is possible to do without drinking the office koolaid.
To emphasize what I learned from my friend Zach: the key is learning hard skills.
Afterwards, it then becomes a matter of finding the confidence in the value that you can provide and then proving it.
Have you ever internally negotiated a large raise at your company? Let me know!
Thank you for reading! 🙂
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Full Disclosure: Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my ‘Terms & Conditions’ page for a full disclaimer.
Dividend Power says
25% is a nice raise. The problem most companies have is that raises are in a bandwidth defined by HR for most people.
Time Value Millionaire says
It’s funny you mention that because my company actually has one of those policies that cap internal promotions at 20%. However, when the recruiter told me that the hiring manager really wanted to extend an offer and not speak to anyone else… I decided to test how strict that our specific policy was.
Turns out if they want you bad enough, they’ll pay for it 🙂
NZ Muse says
DANG! Nice one and GOOD on you for sticking to your guns.
Time Value Millionaire says
All those years of watching Pawn Stars paid off 😀