How to Increase Your Salary

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I talk about salary negotiation and how to maximize your value in your career. Let's hop into it.

Ladies and gentlemen, it is time to get paid. If you're one of the 3.3 billion workers on planet Earth, and I'm assuming you are, this is for you. I'm going to walk you through a tried and true framework for maximizing your value in your job, so you not only feel great about the work you're doing, but also how you're being compensated for your work. And it's a pretty simple framework because there are just two rules. If you do these two things you will escalate quickly in your career and money and titles will follow.

Rule #1: Make losing you really, really painful 

Rule number one: Make losing you really, really painful. The more painful it is for your boss or your company to see you leave. The more leverage you have to make big asks within your company. If you are a senior leader within your company, the way you do that is by making the CEO or your boss’s life so easy, such that they really don't even have to manage you. You get to a point where there's just this implicit trust that exists, and they know that you understand the strategy of the business, you understand how to hire the right people, and you understand the priorities, such that there isn't really anything they can do to add value to your work. That is an incredible place to be because one of the first things that a CEO learns on the job is how brutal it is to have to spend a lot of time managing just one person. Now, if you're a junior person at a company, it's a little bit different,. It’'s all about being a force of nature. I've talked about this in a past Founder's Journal and I'll link to it in the show notes, but the best junior people in a business create a ton of momentum. And they do that through curiosity, defaulting to action, they work really, really hard, and they build trust, such that if you ask them to do something, you just implicitly know it will get done and it'll get done well. Now this may sound weird or counterintuitive, but this is how you negotiate for more money, more equity, or a greater title within a business. Without being a top performer, you don't create leverage, because you don't make it painful for your boss or your company should you decide to leave. This is why performance is 90% of the game to get paid. That leaves 10%. And that leads us to rule number two.

Rule #2: Learn how to advocate for yourself

Rule number two: To get paid, learn how to advocate for yourself. Now, I don't one-hunred percent believe that if you don't ask, you won't get people who are top performers in companies can still rise the ranks really quickly without asking if they work for companies that value great talent. That being said, learning to be your best advocate stacks the deck way in your favor. Rather than hope and pray for upward mobility, you become the captain of your own career. Now, what does it mean to be your best advocate? It means knowing your worth, knowing what to ask for, and knowing what to say. So how do you know your worth? Said differently, what is the market willing to pay you to do your job? There are a few ways to get this information to figure out what you're worth, and I'm going to go from most valuable to least valuable. Most valuable, get intel from your coworkers. This is the hardest, but most valuable information to get. It requires strong relationships and deep trust in order to find out what the people at your level are making and the people a level above you are making. Second, get Intel from the market. So you can check Glassdoor for your company salaries or the salaries of competitors in the space, or if you can't find either of those, you can pan out one level and look at the salaries of basically the same role as you for all companies in your category, whether it's health care, tech, B2B, SaaS, or digital media. The third option is you can figure out your personal opportunity cost. Said differently, what is your market value if you choose to take another role outside of the company? And to do this, it obviously requires you always having your ear to the ground, taking calls with recruiters, even when you're not actively recruiting and keeping irons to the fire for new opportunities. 

An example

So now that you know your worth, you need to know what to say to your boss when the anxiety-provoking, title-and-compensation conversation happens. And I have a very simple rule of thumb for what to ask for and when to ask. Here's the rule: Ask as often as possible for as much as possible without insulting your boss or the company. Let's use an example.

Let's say you're an account director at a company. You're making $125,000 and you have $50,000 worth of equity. And let's assume that you're a great performer, which again is 90% of this whole game. And you're already doing the job of the title above you, which is a senior director. You have figured out your worth by doing the first thing that I talked about, which is talking to a senior director in your company. And you know, now that they make 175K and they have a hundred thousand dollars worth of equity. Here's what I would do. I would ask for the title increase to senior director from your currently account director. And then I would ask for an adjustment of salary to $200,000 and equity to $125,000. And I would do this for a few reasons. First, you have no idea how much the employee that you talked to had to negotiate to get their salary to 175K. You want to leave wiggle room for that. Second, if this employee that you got intel from started making that salary last year or the year before, there is always a natural rise in salaries to account for this little thing in the economy called inflation. And third, if you're able to get them to agree to your ask, it just increases your leverage overall, not just in the company for future title promotions or increase in compensation, but also for jobs outside of your company. And this leads to the final piece. 

Once you know what you're worth, once you know what to ask for, you need to know how to ask for it. At the end of the day, maximizing your value as a professional is a sales pitch. You are selling yourself to your company, just like a business sells itself to investors, a company sells a product to customers, or founders sell a vision to employees. And I actually did a full episode on the power of storytelling, which you should check out if you're interested, I'll link to it in the show notes. And like any sales pitch, you have a goal. Your goal is to leave your boss with a changed perspective, to take them from, I think we pay John fairly, or I think Peggy has the right title, or I think Natalie has enough equity, to them thinking differently.

Alex’s framework for knowing what to say to your boss

And here's my framework for knowing what to say. Step one, set the tone. This is where you show your excitement for the vision of the company and you acknowledge recent developments that make you more confident than ever in the business. It honestly just shows you're really thoughtful and know what's going on at the macro level with your company. Step two, state your goal. This is where you just speak openly. And honestly about what your ask is. Ideally your boss has already put a proposed title or salary change in front of you. And this is where you react to it. Step three, show your value. This is where you brag. You show why you've been a force of nature, what you've done to make your boss's life easier, and how you're already doing the job of the title that you're asking for. This is where you use all of the evidence you've accumulated throughout the year to basically prove your case. Step four, show your preparation. This is where you show you've done your homework regarding what you're worth. And the goal is to make it clear that you're being thoughtful and you're being reasonable about what you're asking for. And step five, shut your mouth. This is probably the most important advice I can give you. Stop talking, start listening, and use the information your boss gives you to guide the conversation moving forward. 

Recap

So to sum it up, the formula for getting paid is 90% performance, 10% self-advocacy. And in order to be a great advocate for yourself, you need to know your worth, you need to know what to ask for, and you need to know how to say it. If you have any other questions about maximizing your value in your career, shoot me an email to alex@morningbrew.com. And while you do that, please subscribe to Founder’s Journal and leave a review on the podcast player of your choice, whether it's Apple, Spotify, or any other. It is the number one way to grow this show. As always, thank you so much for listening and I'll catch you next episode.