How to ask for a raise - HR meeting

hutman

Currently working as a consultant in the city:


At my first annual review meeting HR ambushed me with figures such as annual bonus for this year, next year target and raise. Literally they expected me to nod my head and walk off. No.

The problems below emanate from agreeing a lower salary when I took the job last year.
• Due to have annual second review meeting with employer and want a substantial raise.
• Why?
• Cohorts in the industry perm or contractor get a lot more than me.
• Have met all my goals for the year and over delivered
  
  
  I would some thoughts on how to approach second meeting. My preferred option is not to offer any demands or ultimatums but worried that is the only option to extract the numbers I want.
  
  
• My main goal is to have a decent amount of money going into my pension about £15k p.a. Currently its about 5k..
  
  
• Could I ask employer to raise its pension contributions from 5% to 10-12% and give me a slight raise? This will save them employers NI?
• Should I ask for a substantial raise above what they've offered? Likely outcome they will decline.
• Should I ask for a better bonus target?
• Should I walk out and aim for lucrative contract day rates?
  
  
  I have become aware that any salary raise in the 40% threshold is swallowed by the taxman. What is the best way to ask for a raise with the goal to boost your retirement income?
  
  Thoughts?

xapprenticex

Contribution line sounds reasonable. The worst thing you can say is "I want more because bob earns more", from a business point of view, its not a good reason for wanting a raise imo.



Just be careful with how you word it, unless your place is a place where its expected that people ask for raises. You could always keep an eye out for something better.

Savvy_Sue

hutman wrote: »

I have become aware that any salary raise in the 40% threshold is swallowed by the taxman.

How do you figure that? Every extra £100 you earn you take home £60, no?

Salary sacrifice for pension contributions may be the way to go if you're not far above the 40% tax bracket.

TBagpuss

When asking for a raise, the best way to do it is to justify what the business benefit is for the raise.

-Showing that you have exceeded targets / expectations is good, as is showing you have taken on more responsibilities.

What other people are paid is potentially relvant, but you have to be a little bit careful - if you are, in effect, saying that you would get paid more elsewhere, the employer may chose to, in effect, say "off you go, then". If you riase that, I''d phrase it as you wanting to stya and being aware that if they were looking to replace you it would cost them more than what you are asking for. Don't threaten to go elsewhere for more pay unless you are willing (and able) to do it if they call your bluff.

Look carefully at the bonus structure. If you are over performing, what will these mean for your bonus and how much of the shortfall between your salary, and desired salary, does that make up? A higher salary will usually also mean higher targets before any bonus kicks in. Some employers prefer to pay lower salaries but higher bonuses, as it gives them more flexibility and gives incentives for employees to continue to perform well. If your employer has that mind set, then you might be more successful negotiating on the % of bonus rather than on base salary.

owen_money

Savvy_Sue wrote: »

How do you figure that? Every extra £100 you earn you take home £60, no?

Salary sacrifice for pension contributions may be the way to go if you're not far above the 40% tax bracket.

I work on 50% stoppages. 40% tax and 10% NIC. Seems about right in practice

hutman

The predicament im facing is how to install the salary that I'm owed.. in other words market professionals performing identical or similar job functions to mine with similar profiles are earning on average a third above my salary. You might ask so why didn't you just ask for more, something to which I can only answer that I didn't have enough information with the slight worry of not sounding greedy at interview stage.

The employer know my salary is equivalent to that of a junior in my profession, so if they give me a 'raise', it is something which i'm owed based on market rates.

This is my frustration. The bother of asking for raises is over politicized, and begrudgingly i have to use to get paid what im owed.

steampowered

It is very simple really.

You ask to get paid what you think the market will bear.

If the employer says no, politely inform them that you are not happy with the pay and will therefore be looking at leaving and working for somebody else.

If the employer still says no, leave and work for somebody else.

No need to complicate it. And certainly no need to take your pay personally - it is business.

Asking for more pension contributions will save them a bit of NI, but at the end of the day it is just another way of asking for a payrise.

Savvy_Sue

owen_money wrote: »

I work on 50% stoppages. 40% tax and 10% NIC. Seems about right in practice

Never having been a higher rate tax payer, I can only bow to your experience. However, it still seems to me that earning £100 as a higher rate tax payer gives £50 in your pocket, not all 'swallowed by the taxman'.

hutman wrote: »

The employer know my salary is equivalent to that of a junior in my profession, so if they give me a 'raise', it is something which i'm owed based on market rates.

You might think so, but your contract is that you do X, your employer pays Y. You're not 'owed' a payrise.

hutman wrote: »

This is my frustration. The bother of asking for raises is over politicized, and begrudgingly i have to use to get paid what im owed.

You're not 'owed' any particular salary either. Yes, you do have to negotiate. You negotiate with your current employer, or you move elsewhere.

If you want a straightforward 'onwards and upwards' salary structure, then the place to be used to be the Civil Service and local government. You'd start on this grade, at the bottom, and gradually move up. Progression to the next grade was not automatic but likely if you wanted it. Very straightforward and transparent. Everyone knew your grade, so everyone knew (or could find out) roughly what you were being paid. Even if it's still like that, I'm not sure I'd recommend it.

theoretica

If when you started two years ago you did not know market salaries were you new to this field? If so, perhaps acknowledge that you negotiated a lower rate which reflected that you were new and they were taking a chance on you, but you now feel you have proved yourself.

owen_money

Savvy_Sue wrote: »

Never having been a higher rate tax payer, I can only bow to your experience. However, it still seems to me that earning £100 as a higher rate tax payer gives £50 in your pocket, not all 'swallowed by the taxman'.

It feels like it when you get a £20k bonus and you lose half of it

Energize

Savvy_Sue wrote: »

How do you figure that? Every extra £100 you earn you take home £60, no?

Well not exactly, the employer pays 13.8% "employers NI", and you normally pay 2% NI at the higher rate tax band. So every £100 the company pays towards you, you get £50.97. An effective tax rate of 49.03%. Quite frankly, I would call that "swallowing".