Underpaid, how do I ask for a raise?

Hey guys,I have my annual review coming up and would like some advice on how to ask for a raise. Currently I'm pretty far under market and I'd like a big adjustment but want to do it the correct way.

Here are some stats..

Industry: Corporate Venture Capital (healthcare)

Title: Sr. Analyst / Associate

YOE: 4 (approaching 2yoe in VC, other 2 is in startups / corp fin)

Region: mid west (MCOL)

Total Comp: $68k salary, no bonus

One year ago I was given a $5k increase. Had a discussion with my manager about comp range being under market / what his expectations were for the future and it did not go well..

My research suggests the bottom end of comp range for Sr. Analyst’s is $80k and associated $115k. There is some ambiguity around which level I’m at but I’d be happy with $90k. My performance has been good and I was relied upon heavily this year while we were understaffed.

How do I bring this up professionally during my annual review? I don’t want to sound entitled or ungrateful, but this is a major pain point for me because it’s peanuts compared to where I should be at. Any tips?

 

My experience is that comp increase rarely happens by talking about it with manager.Get an outside offer with 20-50% increase and ask them to match it or beat it. This is the most effective way.

 
[Comment removed by mod team]
 

Just to reiterate this, you got to move and get slotted in correctly.

FWIW, the manager might not have much wiggle room either, I’ve had ppl slotted in low that I wanted to get to market and HR wouldn’t play ball.

 

My mentors have always told me that it's better/easier to find a new position than to ask for a raise. Unless you are indispensable to the firm, and as a sr. analyst you're not, then it is more cost-efficient for the firm to replace you than to give you the raise you want.

Also, don't ever be "grateful" for a job in this context. I mean yes you should be appreciative of the opportunities you're given; however, don't look at it like the firm did you a favor that you should be grateful to them and accept low compensation. You worked your whole life for that job and deserve to be compensated for the labor that you put into the company. Don't ever put your head down and be grateful for whatever they give you. They hired you because you proved yourself and showed your worth in your resume.

Treat these companies like the corporations they are, if you died tomorrow they wouldn't close down for the day and wouldn't even care. Always put yourself and your health before any "loyalty" to a company. Especially if the company is publicly traded, then they're definitely only loyal to the dollar and their shareholders, definitely not you. Always keep your sense of self-worth.

If you're not being compensated then leverage the experience they gave you (which you earned) and bounce to a firm that wants to pay you.

 
Most Helpful

I would advise against trying to leverage an offer into getting a raise- it sends the wrong signal to your current company (that you're looking outside, don't have a long term view of the company, will get pulled away for more money, etc). Yes, those are all legitimate reasons and I am not saying you should not think that way- my opinion on outside offers essentially boils down to this: is the offer better or not? if it is, take it. If not, don't. You don't want them to call your bluff and you to be stuck with a job you don't actually want, or staying in a job after you threatened to leave. Legitimate or not, companies hesitate to invest in people who they don't see as "all in". Just the way things are.

You asked specifically about how to ask for more money- this is definitely worth doing. You have nothing to lose, and it could just be that your company/boss doesn't pay attention to your pay and hasn't thought about it. The phrase you use would be something like this: "I am happy here and am learning a lot- I just want to make sure my compensation is in line with the market. I don't want to be distracted by other opportunities, and I am sure the company doesn't want a workforce that feels underpaid."

The idea is that you are essentially letting your company know you are not unaware that you are underpaid. You are hoping the underpayment is just because you havent spoken up and they haven't noticed. That is basically all you can do- anything stronger and you get to the territory of looking like a mercenary (right, wrong, or indifferent- companies dont like that). And any other reason for underpaying you is a resounding reason to leave.

Which brings me to my final point- odds are you leave. Leveraging offers, asking for more money... those are just band-aids. The underlying problem is the company isn't willing to pay for talent, so you'll constantly have to have these conversations. There are plenty of companies out there that are willing to pay for talent and willing to advance talent. No use sticking with a company that isn't. $68k is ridiculous- FLDPs at my prior (stingy defense) company are now getting 70k out of college to be cost accountants/human button pushers. You're getting shafted. Look outside, and ask for 100-120k as an SFA. Do it with a straight face and a steel stomach. Those roles are out there.

 

I appreciate your perspective and will be trying this approach. I also agree that odds are I will leave.

What should my end goal of this conversation be? Do I want them to give me a new number, acknowledge I’m underpaid and commit to making it right, etc..

I can foresee my manager asking me what would make me happy or what I think market rate is. Should I be straight forward with my response or would it be better to let him give numbers first?

I’m concerned for my approach because I’m showing my cards - I’m basically telling them that I know I’m underpaid and if they don’t make it right they’re going to lose me, just in a more delicate way. Should I even care that they’ll know this?

 

The end goal is more about your own career goals, so I can't exactly say. If it were me, the ideal conversation would end with them saying that they've appreciated my contributions and are promoting me to expand my responsibilities and pay. To me, title and experience are king in the first 10-15 years- Not to say I don't care about pay, but I'm ok with being (modestly) underpaid as long as I am building a great resume. After that, however- its time to really cash in.

When is your year-end discussion? when do year-end raises normally happen? You have to be careful about any promises with a horizon longer than 3 months- its a gamble if those come through.

When it comes to giving a number- I wouldn't shy away from giving the number you actually want, plussed up by 5-10k (for negotiating room). In your post you said you'd be happy with 90k- I would pitch 95-100k. Really think through how much you actually want. At my prior company I felt like the industry was niche enough that I could build specific knowledge and become very valuable to them and accelerate much faster down the road. For that, I was willing to take a discount to pay in the short run. Not title, though- and this was the reason I left. And furthermore- the experience/acceleration in my new role is far better than anything I've had before, and I'm being paid well. Best of both worlds.

Regarding not wanting to sound ungrateful/entitled- they would be having the same thoughts in your shoes. If anything, I have less respect for the person who stays under-appreciated for years than the person who leaves too soon for a raise. That is why the key part of the phrase I mentioned before is saying that you are happy and have been getting great experience, and that you have not been looking for something else- you just know you are below market level, you want to know the company values you, and you don't want the lower pay to be a distraction to you.

Again- I'd say the odds are 5% you get what you want. That's why I wouldn't worry too much about sounding ungrateful. You are essentially giving them the benefit of the doubt that maybe they haven't realized that you are severely underpaid. They'll likely hand-wave and give you some token increase. You'll leave, and they'll be forced to hire your replacement at $90k.

 

Any time you’re trying to negotiate a pay bump you need to have data to support it. Try to find posted salaries on Glassdoor or a similar site for similar companies in your industry/market. However, if you’ve already attempted this discussion once and it didn’t get anywhere then I don’t think your chances are much better the next go around. I agree with other posters that it seems you are incredibly underpaid and need to go elsewhere. 
 

Good luck!

 
[Comment removed by mod team]
 

IMO it depends on your relationship with your manager. You mentioned you already had a discussion with them last year about pay, but that didn't go well - was that because they themselves didn't think you deserved more / weren't willing to work with you or moreso they couldn't move the needle with the appropriate decision makers. If it's the former, I wouldn't even bother asking for more pay. If the general vibe you get is your manager isn't on your side, I don't think a conversation (with or without an offer) will lead anywhere substantial in the long term and your best bet is to find another job.

After 4 years of experience you can definitely find a senior analyst / associate role elsewhere and as everyone keeps pointing out the pay is going to be significantly better. IMO I would just start applying now - the hiring market still seems pretty favorable despite recessionary fears.

 

Dude, $70k was my first year salary in a back office corp fin role 3 years ago. Screw the negotiation - you are so ridiculously underpaid that you need to immediately start looking for a new role. If they are short changing junior team members, imagine how badly they're underpaying seniors. This is an irreconcilable situation. You should easily be at 2x that comp.

 
[Comment removed by mod team]
 

I would literally pack up and leave man. This is modern slavery. Having a corporate VC suggests your company is sizable, thereby afford to pay at least market. Why not just take your experience and go elsewhere? They are paying you so much below the market which indicates a frugal culture there.

I often get depressed about my crappy bonus, but oh boy you have all the rights to be pissed

 

(1) How is the performance of your group as well as the broader company? If your group/company isn't doing well vs financial targets, it's going to be more challenging to get the raise you want, even if your direct manager agrees with your contributions and rationale. It makes very little sense, but kind of a "is what it is" often times with overly structured corporations and tight budgets.

(2) Why did your previous conversation not go well regarding future expectations? You say your performance has been good- is this confirmed in your rating in previous annual reviews? E.g. are you above, or just meeting expectations. Not saying you did this, but I'd be careful about blanket statements like, "my research suggests I should be making XYZ." It shouldn't really matter what others make, regardless of whether you're above the average or below the average. You need to make a case for the value that you bring to the organization, with less of an emphasis on benchmarking others' salaries.   

(3) If you ask for $X amount more in base salary, how can you justify that raise with additional responsibilities? This conversation will go much better than just asking for 50% more money for doing essentially the same work. 

(4) You took a job that paid $63K and no bonus - why? Now you're asking for a ~50% raise vs where you initially came in at just 2 years ago. You have to admit, this one is kind of on you. Lesson learned. If your goal was to leverage this experience into something similar but higher paying, that's a fine strategy and you can continue down that path. But if your hope was to make 50-100% more in just 2 years at the same company without promotion, that's a stretch in the corporate world.   

Good luck with whatever decision you choose.

 

Best way to ask for a raise is to get an alternative offer which offers you more than the current. Then you go to your boss and tell them if they dont match / give you more, then you will quit.

You can always bluff too, but it is ballsy and may not work. Well, worst case scenario you have extended holidays btw Seychelles / Dubai is amazing by this time of the year!

 

Not to pick on you in particular but leveraging another offer is something I just don't understand. There is so much more to a job than just the money- the responsibilities are always slightly different, the hours expected, the name-brand, the exposure to leadership, the average age of managers/directors/VPs, the average turnover for employees, growth of the company (organic and inorganic).. each one of those has huge implications on your career.

There are so many factors at play that getting them to match money is rarely enough. If I were a frugal, cutthroat manager I think it would be safe to assume that if someone came to me to leverage an offer, the other job is likely worse on multiple other fronts because if it wasn't, they'd accept it outright. So I wouldn't match- maybe give some slight bump, but not match.

What happens if they do match? Now they know you've been shopping your skills around- are you going to come back in 3 months with another offer? why would they groom you for a higher position down the road if you're not committed for that long, or will get the training and then jump?

And what happens if they don't match? You either have to accept the other job (which must be shittier if you weren't willing to accept it on it's own merit), or you don't accept it and now you're a dead man walking. You're the guy who tried to leverage an offer, had his bluff called, and decided to stay. No more attention or growth for you.

Bottom line- you are worth what the market gives you. If the offer is better, take it- if not, don't.

 

If it didn't go well the first time, and if I am that underpaid, I would find another job. You seem to have solid experience, so finding another job shouldn't be too hard. They can find someone else to rely on.

 

Ut dolor perferendis quia occaecati. Consequatur nihil doloribus eos quia. Asperiores eius quia nesciunt sequi incidunt sapiente necessitatibus. Sit exercitationem praesentium aut dignissimos.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
dosk17's picture
dosk17
98.9
6
CompBanker's picture
CompBanker
98.9
7
kanon's picture
kanon
98.9
8
GameTheory's picture
GameTheory
98.9
9
DrApeman's picture
DrApeman
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”