Do you think it’s possible to get a big raise? In this article, we’ll analyze how to do it, and the solution might surprise you.
If you want to significantly increase your income, expatriation can be a beneficial choice, but unfortunately, it’s not an option for everyone. Alternatively, you could try creating a second income stream by leveraging some of your skills, but this could hinder your career or be frowned upon by your boss.
Another option is to consider changing jobs, but we all know that change is stressful and carries many risks that cannot be measured beforehand.
Your options are not over yet, and in this article, we’ll analyze how it’s possible to get a salary raise.
The Context for a Raise
For simplicity, let’s imagine you work in the private sector in a typical SME. For those who don’t know, small and medium-sized enterprises contribute 63% to GDP and 76% to employment (in Italy). Before taking action, I advise you to carefully evaluate your chances of success.
We all know that in a company, salary is an “open secret”: we all want to know how much our colleague sitting next to us earns or what our boss makes, and we’re often surprised when we find out the truth.
Step 1: The Big Picture
To get the right picture, the first thing to do is to check if the sector your company operates in is growing or not, and if your company is doing well or is in decline. These details are easily accessible by consulting the latest financial statements and seeing if the main financial indicators are improving.
Try to gauge the atmosphere within the company—what’s known as “smell of the place.” On this topic, I find the 1995 Davos speech by rof. Sumantra Ghoshal very interesting (unfortunately, the video quality isn’t great, but the content is excellent).
If both of the above conditions are met, you can proceed with your analysis; otherwise, it’s better to wait for future developments or start looking around.
Step 2: Quantitative Analysis
Workers are a commodity, despite all the politically correct rhetoric, and salaries are dictated by the laws of supply and demand. We are all easily replaceable—accept this and put your ego aside. Consult industry studies, which are periodically published by recruitment companies, and try to understand if your salary is aligned with the market. Recently, a salary study by Michael Page came out that I find very interesting.
If your salary is in line with the market, why should you get a raise? What makes you special enough to be paid more than others?
Step 3: Check Your Skills
Carefully analyze your skills. Here, you will encounter biases that will tend to make you overestimate yourself—don’t fall into the Dunning Kruger effect.
The Dunning-Kruger effect is a cognitive bias in which people with low ability in a certain field tend to overestimate their competence, mistakenly believing it to be above average.
Try asking your colleagues for feedback to understand how you are perceived, but avoid asking friends.
Dunning Kruger effect
Step 4: Take Action
If the previous conditions have been met, it’s time to take action and make your request.
Time is Your Friend
Personally, I believe a good time to ask for a raise is during major changes: the entry of new partners, the sale of the company, a new boss, and so on. You must take advantage of extraordinary events.
In my experience, I recall that the company I worked for had great difficulties completing a project. After unsuccessfully attempting to go public, they decided to sell 35% of the shares to a private equity fund. In the end, the due diligence went well, and the key executives involved, including myself, received a raise. What I didn’t know was the other side of the coin. The company I had worked hard for, in order to sell, gave the fund the option to fire me within six months if I didn’t perform, but that’s another story.
It won’t always be possible, but you should always focus only on what you can control: work hard and give your best effort, without being obsessed with getting a raise. The principle is the same as compound interest—results will come in the long term, so never give up.
The Testimony
To develop this topic further, since I am a CFO, I thought it might be helpful to ask for insight from someone truly specialized in human capital. I’d like to introduce my friend Chiara Bodini, founder of the agency Purpose&Talent..
Thank you for sharing your insights, I know you’re very busy at the moment.
TFC: In your opinion, is it possible to measure talent?
CB: First, let me preface this by saying that salary is a great motivator in the short term and is identified in psychology as extrinsic motivation—the part of motivation that comes from “outside.” Intrinsic motivation, on the other hand, is more powerful in the long term, such as recognizing that we are doing things well. It’s what we give back from within.
Now I can begin.
Measuring one’s talent requires a certain degree of objectivity and self-awareness, and I say this right away because if you’re not honest, it will be a pointless exercise. For those willing to challenge themselves, especially with a long-term focus, it’s definitely a worthwhile activity to maximize income.
Talent, first and foremost, is a combination—everyone has it. If well-managed (like resources), it can grow, and finally, it’s a commodity (to use economic terminology!).
First, you need to analyze your knowledge area, which refers to what you’ve acquired in terms of education and information in the broad sense. What you know is a substantial part of your talent, as it represents the most measurable exchangeable goods, though not necessarily the most important ones.
Second step: an informed analysis (here you can ask for feedback from those who work with you) of your transversal skills, such as your communication ability, leadership, negotiation skills—everything that relates to the competencies you’ve developed across different areas and dimensions. This is the second element, which is more complex to identify, but once clarified internally, it provides a driving force for change.
The third step is related to “flow,” that feeling we get when we do something we love and that makes us feel good, where time passes without us even noticing. When, after hours, we look up and realize it’s evening. This indicator is very important as it allows us to understand our inclinations—not necessarily a job or a role, but what makes us feel good.
These three steps are the ingredients of talent, which can be measured and analyzed in various ways. The first is certainly simpler than the second, and the third is mostly a matter of inner awareness. Methods such as working with a coach or assessments like Hogan can help, but above all, our ability to see ourselves as a whole and not in isolated compartments.
Who we are and what we do shouldn’t be, or at least shouldn’t seem, so distant from each other.
TFC: What should be the purpose of every worker?
CB: Purpose is the meaning of one’s existence and identity. Simply put, it’s what makes us get up in the morning and do what we do. Work represents a large part of our existence. In our relationships with others, we bring our whole selves, not just our skills—indeed, we bring our talent.
The purpose of the worker is to perform at their best, both for themselves and for the organization they operate within. The intrinsic motivation of human beings is the most powerful factor when it comes to the long term and generating value for both themselves and the outside world.
TFC: Do you think people overestimate their abilities when measuring their skills?
CB: Many studies demonstrate this, as you mentioned with the Dunning-Kruger effect. Another aspect to consider is impostor syndrome, which makes those who experience it feel undeserving of the success they have achieved. So, it’s the exact opposite. I think it’s good to be aware of these two psychological effects in relation to self-analysis, which is full of biases.
However, by investing in self-awareness, honesty, and critical thinking—and by asking for feedback from those around us—there’s a good chance of doing an excellent job. Personally, I believe strongly in the power of writing: a simple diary is a powerful tool for the writer, useful for bringing order and clarity.
I’d add that continuing to learn, by increasing the level of the first ingredient (knowledge), gives talent the opportunity to flourish. It’s like saving is to investment; forgive the metaphor.
TFC: What might be the best strategy to get a raise?
CB: Knowing why you deserve it and being able to argue your case very well and in detail. Understanding which companies might recognize this merit (for an internal boost). Knowing that the chances are 50% up to us. If you don’t get it immediately, 25% will be about increasing your efforts, and the remaining 25% will be about networking. By doing so, you also give the organization the chance to recognize it.
TFC: Personally, reading books, not just on economics, has become a regular habit. I’ve dedicated many hours to this, especially in recent years. Honestly, I think the benefits are evident in many ways over the long term. Is there a particular book that changed your life or an author you follow closely?
CB: Books are pure nourishment, and as I mentioned earlier, knowledge is a fundamental ingredient in our talent recipe. There are many books and authors who have given me so much, especially in terms of inner growth, and one that I can mention—which isn’t really a book but a speech compiled into a small booklet—is The Way of Man by Martin Buber.
Buber was a great philosopher, psychologist, and theologian of the 20th century, with an incredible life and unparalleled wisdom. I’ll just quote a couple of lines from the book: “With every man, something new comes into the world that has never existed before, something that is first and unique.” “Everyone must safeguard and sanctify their own soul in their own way and place, without envying the way and place of others.”
I don’t want to add much more because I hope that after reading this article, someone will feel inclined to read Buber. This philosopher helped me see with clarity and simplicity that the purpose of each of us is a path, not an object to chase after.
Thank you, Chiara, for this short interview and for the time you’ve given us. It has been truly fascinating to discuss this with you. We encourage our readers to follow Chiara Bodini for further advice and inspiration.
On avance!
