How to Score that Big Raise!
On any given day, I talk with at least a dozen individuals exploring new opportunities with my insurance clients.
When the discussion turns to compensation, it’s amazing how many of these very bright insurance professionals are severely underpaid because they don’t know how to negotiate a raise with their existing employers.
In particular, I find that many loyal account managers who have worked for small agencies for long periods of time have been downright taken advantage of by their bosses/supervisors/owners regarding compensation.
The WSJ has reported that not negotiating with your employer over compensation during your annual review results in more than $1 million in lost compensation and promotions for the typical executive over a professional lifetime.
With a little bit of knowledge, you can fight back and get what’s rightfully yours.
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For example: I have been working with a commercial lines account manager (let’s call her Kim) since 2017. I can set my watch by her because she calls me exactly 30 days prior to her annual review each and every year to strategize with me over her next annual review meeting. Why do I help her? Because she is one of only a few who takes the time to call me for help. I don’t mind telling you that she is prepared for war during her annual reviews and she usually gets most of what she asks for. She methodically approaches each annual review meeting as if she is going into battle! She has been promoted four times and, per my notes, she has gone from making $51,500 to more than $102,000 during this time. Not bad for seven years.
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So where do we start?
Your annual performance review.
Minimum questions to ask in your next review should be at least:
· What is the path to advancement? Find out what the expectations are. Write down the specific steps one has to take to get to the next rung on the ladder. Always be thinking of getting to the next level. Know what the requirements are. Find out what certifications you can obtain that would make a difference – CIC, CISR, ARM, ACSR, etc.?
· What specifically can I do to positively impact this company? Ask your boss what YOU can do specifically to help get your company from good to great…or maybe from bad to good – you get the point! The important point here is to get specifics on how you can personally drive positive change in your company.
· What areas did I perform above and beyond the call of duty in? Have your boss tell you specifically how and why you had a positive impact on the company. Press him/her. Make a list. This is very important because you always want to be focusing your efforts on those things that you do very well.
· How can I improve? Don’t be afraid to ask this question…I know it hurts sometimes, but this is a critical data point to get. You want to minimize your weaknesses and put all your efforts into what you do well. Better to find out now. Specific areas of improvement can also be included in your performance-based benchmarks that related to bonuses, etc. More on this below…
· What are the specific goals and objectives for me to achieve in the next year? This is a key part of the conversation. You want to have a specific list of quantitative and qualitative expectations for your specific position. In a perfect world, you will have a list of specific benchmarks and KPIs (key performance indicators). Make sure you discuss and mutually agree on these. Don’t just accept them – discuss and agree on them. Then read them at least once per week and personally track your progress.
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So how exactly do I get a Pay Raise??
According to a recent Mercer Consulting Group salary survey, pay raises for the foreseeable future will not keep up with inflation. This makes it even more important to negotiate smartly.
Here are several things you can do to negotiate a pay raise:
· Personalized Goals: As discussed, come up with a mutually acceptable list of performance metrics/benchmarks during your annual review – and then beat them. Review them every day. Exceeding agreed upon goals = bonus $$ so make sure you tie your metrics to a specific bonus amount. Once again, what about professional certifications?
· Never too late to ask for an informal review: If you are more than six months away from an annual review, ask for an informal one. Trust me, just do it.
· Lock & Load: Gather all your data, specifically, with regards to your mutually agreed upon benchmarks and performance metrics from the review period. Make a list of all the “above and beyond the call of duty” items you gleaned from your boss during your annual review session. Review it so you are fluent in it. Most likely, your boss will arrive to the meeting completely unprepared…arriving from another long meeting.
· Do your Research: Call me! I have all the data you need regarding insurance salaries for account managers and producers for the DC region. And then do your own research – there are many online pay charting systems to gather data.
· Role Play & Script: This is a very important meeting – probably one of the most important for the entire year. Role play and script out what you are going to say. Yes, chance really does favor the prepared mind. If you have control of the information, you will win this negotiation with your boss. And, yes, there is always a winner and a loser in a negotiation. A “win-win” is for losers. Total cliché.
· Base versus Bonus: This is one neglected area of compensation. Don’t just focus on the base compensation because in many cases this is set by Human Resources for each position, BUT bonuses are, in most cases, different. In other words, take some of the “above and beyond the call of duty” items and tie them to specific bonus amounts.
· Never make the first offer: When discussing specific compensation, never be the first to make an offer or suggestion. If you do, you have just negotiated against yourself. Don’t do it.
· Get it in WRITING: Verbal representations are worth zero. You always want to get any promises in writing. Worse case, put it in writing yourself and present to the boss. Otherwise, he/she will procrastinate and get a case of memory loss.
Final Thoughts:
One thing is for sure: if you don’t ask for a raise, it will probably be little to nothing. Stop procrastinating and get in the fight. Get that review and raise that you deserve. Your family will appreciate your efforts! Call me anytime. Glad to help!
