Negotiating a Pay Raise, Company Troubles

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cbr shadow
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Negotiating a Pay Raise, Company Troubles

Post by cbr shadow »

I work for a small company in a major tech market. The company's core business has been struggling a lot since the beginning of the pandemic. I'm completely separate from that in a technology role. The contract me out to a major tech company, which they've done now for 7 years. I'm paid reasonably well and have gotten raises every year since starting in this role. The expectation originally was for me to be in a 3 month contract, but I've expanded this project at the tech company and built value from within which has made this a long term project that is seen as very valuable at the tech company. I've had to manage the project, present to executives about why the project should grow, push for more resources, etc. My 3 month contract has now been going for 7 years and I've gotten (2) additional people added to the project (contracts that my company makes money on) that I now manage.

My salary initially was $83k. I'm now paid $130k. None of these increases came without me speaking to the executives at my company and pushing for a raise. It's been a year since my last raise, but I now manage an additional person, so I'd like to push for another raise. My concern is that the company's core business isn't doing well. My 'piece' of the business, or my department/project is doing fantastic and is dependable consistent income for the company I work for. Do I ask for more money?

I think I'll probably get 2 types of responses:

1) The company you work for is not doing well but you're going to ask for a raise?!
2) The core business of your company is separate from your department, and your department is doing really well - ask for the raise.

Since the company wasn't doing well when the pandemic hit they stopped their 401k match. Last year when I asked for a raise I mentioned the 401k match going away and they said they would deposit $5k into my 401k at the end of this year, to make up for the year of not matching in 2021. I want to be sure that this isn't seen as a 'pay increase' this year though. By promising me the money in early 2022 and giving it to me in late 2022 / early 2023 I'm afraid they're getting double credit for the single deposit.

How do I negotiate all of this?

Thanks for any advice.
CletusCaddy
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Re: Negotiating a Pay Raise, Company Troubles

Post by CletusCaddy »

You do neither of the things you suggested.

Instead, you go out and test the job market. Get an offer in hand to see what you're really worth. Then you go back to your boss and say you are underpaid relative to your market worth and what can they do about that.
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by KlangFool »

OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
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KlangFool
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Re: Negotiating a Pay Raise, Company Troubles

Post by KlangFool »

CletusCaddy wrote: Fri Aug 05, 2022 11:48 am You do neither of the things you suggested.

Instead, you go out and test the job market. Get an offer in hand to see what you're really worth. Then you go back to your boss and say you are underpaid relative to your market worth and what can they do about that.
+1,000.

KlangFool
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sport
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Re: Negotiating a Pay Raise, Company Troubles

Post by sport »

You are "contracted to a major tech company". Can you go to work for that company? They know you and apparently are pleased with your work.
muffins14
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Re: Negotiating a Pay Raise, Company Troubles

Post by muffins14 »

sport wrote: Fri Aug 05, 2022 11:53 am You are "contracted to a major tech company". Can you go to work for that company? They know you and apparently are pleased with your work.
This seems like the right path to explore
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wannabebogler
Posts: 74
Joined: Mon Jul 07, 2014 10:02 am

Re: Negotiating a Pay Raise, Company Troubles

Post by wannabebogler »

cbr shadow wrote: Fri Aug 05, 2022 11:38 am

Since the company wasn't doing well when the pandemic hit they stopped their 401k match. Last year when I asked for a raise I mentioned the 401k match going away and they said they would deposit $5k into my 401k at the end of this year, to make up for the year of not matching in 2021. I want to be sure that this isn't seen as a 'pay increase' this year though. By promising me the money in early 2022 and giving it to me in late 2022 / early 2023 I'm afraid they're getting double credit for the single deposit.

How do I negotiate all of this?

Thanks for any advice.
Not sure if they don't know better or aren't using correct language, but I highly doubt they'll deposit an amount into your 401k, just because. Companies can't do this without a significant amount of testing.
Topic Author
cbr shadow
Posts: 390
Joined: Wed Jul 10, 2013 2:12 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by cbr shadow »

KlangFool wrote: Fri Aug 05, 2022 11:50 am OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
1) I don't really have one. I've gotten 10% raises each year I've been here, roughly, so I figured I was in a good spot.

2) I think you're probably right. I'm in the Bay Area and live comfortably, but probably should look at other jobs.

3) Yes I'm involved in the contract. They have a single contract for the (3) employees and basically charge 2x our salary. They provide benefits, but those aren't amazing so the total compensation isn't a whole lot higher than our actual pay. My pay raises have cut into the "2x" a bit (They charge $250k for my $130k salary), but there's still lots of money coming in for the company from these 3 employees contracted.

4) Yes this is a possibility, but not likely. The department I work for notoriously has a large contracted workforce, and has for a while. You bring up a good point though, so I should look into that option.
Topic Author
cbr shadow
Posts: 390
Joined: Wed Jul 10, 2013 2:12 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by cbr shadow »

wannabebogler wrote: Fri Aug 05, 2022 1:35 pm
cbr shadow wrote: Fri Aug 05, 2022 11:38 am

Since the company wasn't doing well when the pandemic hit they stopped their 401k match. Last year when I asked for a raise I mentioned the 401k match going away and they said they would deposit $5k into my 401k at the end of this year, to make up for the year of not matching in 2021. I want to be sure that this isn't seen as a 'pay increase' this year though. By promising me the money in early 2022 and giving it to me in late 2022 / early 2023 I'm afraid they're getting double credit for the single deposit.

How do I negotiate all of this?

Thanks for any advice.
Not sure if they don't know better or aren't using correct language, but I highly doubt they'll deposit an amount into your 401k, just because. Companies can't do this without a significant amount of testing.
I'm not 100% clear on the details, but the CEO and I had a conversation in January where he said he's not allowed to give just 1 employee a match, but said he can legally do a lump sum payment into my 401k in december, which he said he would do. He followed that conversation up with an email so that I have it written that they'll give me $5k lump sum into my 401k at the end of the year. I can definitely bring this email to him and say "just a reminder..." but I don't want him to feel like he's given me something in lieu of a raise. This is a payment for last year's promise, not a new 'bonus'/raise.

It sounds like I need to look around a bit and see what I'm actually worth. There's plenty that I do love about the job. I work from home and have lots of flexibility, fairly low stress, and take some pride in the growth of this project and adding new employees.
wannabebogler
Posts: 74
Joined: Mon Jul 07, 2014 10:02 am

Re: Negotiating a Pay Raise, Company Troubles

Post by wannabebogler »

cbr shadow wrote: Fri Aug 05, 2022 2:34 pm
wannabebogler wrote: Fri Aug 05, 2022 1:35 pm
cbr shadow wrote: Fri Aug 05, 2022 11:38 am

Since the company wasn't doing well when the pandemic hit they stopped their 401k match. Last year when I asked for a raise I mentioned the 401k match going away and they said they would deposit $5k into my 401k at the end of this year, to make up for the year of not matching in 2021. I want to be sure that this isn't seen as a 'pay increase' this year though. By promising me the money in early 2022 and giving it to me in late 2022 / early 2023 I'm afraid they're getting double credit for the single deposit.

How do I negotiate all of this?

Thanks for any advice.
Not sure if they don't know better or aren't using correct language, but I highly doubt they'll deposit an amount into your 401k, just because. Companies can't do this without a significant amount of testing.
I'm not 100% clear on the details, but the CEO and I had a conversation in January where he said he's not allowed to give just 1 employee a match, but said he can legally do a lump sum payment into my 401k in december, which he said he would do. He followed that conversation up with an email so that I have it written that they'll give me $5k lump sum into my 401k at the end of the year. I can definitely bring this email to him and say "just a reminder..." but I don't want him to feel like he's given me something in lieu of a raise. This is a payment for last year's promise, not a new 'bonus'/raise.

It sounds like I need to look around a bit and see what I'm actually worth. There's plenty that I do love about the job. I work from home and have lots of flexibility, fairly low stress, and take some pride in the growth of this project and adding new employees.
He must be talking about a profit sharing contribution within a new comparability arrangement. They still have to do testing, but if you're the only one getting it and you're not a highly compensated employee, it might be ok.
KlangFool
Posts: 25854
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Re: Negotiating a Pay Raise, Company Troubles

Post by KlangFool »

cbr shadow wrote: Fri Aug 05, 2022 2:29 pm
KlangFool wrote: Fri Aug 05, 2022 11:50 am OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
1) I don't really have one. I've gotten 10% raises each year I've been here, roughly, so I figured I was in a good spot.

2) I think you're probably right. I'm in the Bay Area and live comfortably, but probably should look at other jobs.

3) Yes I'm involved in the contract. They have a single contract for the (3) employees and basically charge 2x our salary. They provide benefits, but those aren't amazing so the total compensation isn't a whole lot higher than our actual pay. My pay raises have cut into the "2x" a bit (They charge $250k for my $130k salary), but there's still lots of money coming in for the company from these 3 employees contracted.

4) Yes this is a possibility, but not likely. The department I work for notoriously has a large contracted workforce, and has for a while. You bring up a good point though, so I should look into that option.
cbr shadow,

1) This is simply not true. You did not get 10% raise every year. If you did, your pay would had been at least double of 83K now.

2) Earning 130K in the Bay Area does not make any sense. You could had earned that much or more and live somewhere else with a lowered cost of living.

3) 250K = ~$125 per hours That seems to be a very cheap contract.

4) Actually, you probably should look elsewhere. As far as I can tell, your client is not paying the market rate too.

In summary, your pay/compensation seems to be very low in the Bay area.

KlangFool
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Topic Author
cbr shadow
Posts: 390
Joined: Wed Jul 10, 2013 2:12 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by cbr shadow »

KlangFool wrote: Fri Aug 05, 2022 3:12 pm
cbr shadow wrote: Fri Aug 05, 2022 2:29 pm
KlangFool wrote: Fri Aug 05, 2022 11:50 am OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
1) I don't really have one. I've gotten 10% raises each year I've been here, roughly, so I figured I was in a good spot.

2) I think you're probably right. I'm in the Bay Area and live comfortably, but probably should look at other jobs.

3) Yes I'm involved in the contract. They have a single contract for the (3) employees and basically charge 2x our salary. They provide benefits, but those aren't amazing so the total compensation isn't a whole lot higher than our actual pay. My pay raises have cut into the "2x" a bit (They charge $250k for my $130k salary), but there's still lots of money coming in for the company from these 3 employees contracted.

4) Yes this is a possibility, but not likely. The department I work for notoriously has a large contracted workforce, and has for a while. You bring up a good point though, so I should look into that option.
cbr shadow,

1) This is simply not true. You did not get 10% raise every year. If you did, your pay would had been at least double of 83K now.
I'm coming up on the 7th year now, so 10% raise for 6 years, starting at 83k means I'd make $133,670. I make $130k, so thought that was close enough to call 10%. :sharebeer

2) Earning 130K in the Bay Area does not make any sense. You could had earned that much or more and live somewhere else with a lowered cost of living.
I believe You've made assumptions that are incorrect. There are lots of reasons to live in the Bay Area outside of how much money someone makes (beaches, mountains, WEATHER, I could go on), and $130k is more than the median household income for most cities in the Bay Area. What I didn't mention is that my wife makes more than 2x what I do, since it wasn't relevant to my question.

3) 250K = ~$125 per hours That seems to be a very cheap contract.
That's probably subjective - it feels like a lot to me! I have lots of coworkers who are contractors and their salary and contract are much lower.

4) Actually, you probably should look elsewhere. As far as I can tell, your client is not paying the market rate too.
I think you're right. I need to start applying for other positions and see what I'm really worth.

In summary, your pay/compensation seems to be very low in the Bay area.

KlangFool
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by KlangFool »

cbr shadow wrote: Sat Aug 06, 2022 5:25 pm
KlangFool wrote: Fri Aug 05, 2022 3:12 pm
cbr shadow wrote: Fri Aug 05, 2022 2:29 pm
KlangFool wrote: Fri Aug 05, 2022 11:50 am OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
1) I don't really have one. I've gotten 10% raises each year I've been here, roughly, so I figured I was in a good spot.

2) I think you're probably right. I'm in the Bay Area and live comfortably, but probably should look at other jobs.

3) Yes I'm involved in the contract. They have a single contract for the (3) employees and basically charge 2x our salary. They provide benefits, but those aren't amazing so the total compensation isn't a whole lot higher than our actual pay. My pay raises have cut into the "2x" a bit (They charge $250k for my $130k salary), but there's still lots of money coming in for the company from these 3 employees contracted.

4) Yes this is a possibility, but not likely. The department I work for notoriously has a large contracted workforce, and has for a while. You bring up a good point though, so I should look into that option.
cbr shadow,

1) This is simply not true. You did not get 10% raise every year. If you did, your pay would had been at least double of 83K now.
I'm coming up on the 7th year now, so 10% raise for 6 years, starting at 83k means I'd make $133,670. I make $130k, so thought that was close enough to call 10%. :sharebeer

2) Earning 130K in the Bay Area does not make any sense. You could had earned that much or more and live somewhere else with a lowered cost of living.
I believe You've made assumptions that are incorrect. There are lots of reasons to live in the Bay Area outside of how much money someone makes (beaches, mountains, WEATHER, I could go on), and $130k is more than the median household income for most cities in the Bay Area. What I didn't mention is that my wife makes more than 2x what I do, since it wasn't relevant to my question.

3) 250K = ~$125 per hours That seems to be a very cheap contract.
That's probably subjective - it feels like a lot to me! I have lots of coworkers who are contractors and their salary and contract are much lower.

4) Actually, you probably should look elsewhere. As far as I can tell, your client is not paying the market rate too.
I think you're right. I need to start applying for other positions and see what I'm really worth.

In summary, your pay/compensation seems to be very low in the Bay area.

KlangFool
cbr shadow,

Law of compounding.

10% per year for 6 years

(1.1)^6 = 1.77

83K * 1.77 = 147K

Year Increase Amt
0 0.00 83.00
1 8.30 91.30
2 9.13 100.43
3 10.04 110.47
4 11.05 121.52
5 12.15 133.67
6 13.37 147.04

KlangFool
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Topic Author
cbr shadow
Posts: 390
Joined: Wed Jul 10, 2013 2:12 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by cbr shadow »

KlangFool wrote: Sat Aug 06, 2022 5:41 pm
cbr shadow wrote: Sat Aug 06, 2022 5:25 pm
KlangFool wrote: Fri Aug 05, 2022 3:12 pm
cbr shadow wrote: Fri Aug 05, 2022 2:29 pm
KlangFool wrote: Fri Aug 05, 2022 11:50 am OP,

1) What is your plan B?

2) Your pay seem to be kind of low for that level of responsibility.

3) Do you know how much money that the company make from this project? You do not have to tell us the number. I am just asking whether you know.

4) Is there a possibility for you to work with the client directly if everything at your employer falls apart?

My gut feeling tells me that you are severely underpaid. Any pay raise would not fix your problem. You should work on your exit plan.

KlangFool
1) I don't really have one. I've gotten 10% raises each year I've been here, roughly, so I figured I was in a good spot.

2) I think you're probably right. I'm in the Bay Area and live comfortably, but probably should look at other jobs.

3) Yes I'm involved in the contract. They have a single contract for the (3) employees and basically charge 2x our salary. They provide benefits, but those aren't amazing so the total compensation isn't a whole lot higher than our actual pay. My pay raises have cut into the "2x" a bit (They charge $250k for my $130k salary), but there's still lots of money coming in for the company from these 3 employees contracted.

4) Yes this is a possibility, but not likely. The department I work for notoriously has a large contracted workforce, and has for a while. You bring up a good point though, so I should look into that option.
cbr shadow,

1) This is simply not true. You did not get 10% raise every year. If you did, your pay would had been at least double of 83K now.
I'm coming up on the 7th year now, so 10% raise for 6 years, starting at 83k means I'd make $133,670. I make $130k, so thought that was close enough to call 10%. :sharebeer

2) Earning 130K in the Bay Area does not make any sense. You could had earned that much or more and live somewhere else with a lowered cost of living.
I believe You've made assumptions that are incorrect. There are lots of reasons to live in the Bay Area outside of how much money someone makes (beaches, mountains, WEATHER, I could go on), and $130k is more than the median household income for most cities in the Bay Area. What I didn't mention is that my wife makes more than 2x what I do, since it wasn't relevant to my question.

3) 250K = ~$125 per hours That seems to be a very cheap contract.
That's probably subjective - it feels like a lot to me! I have lots of coworkers who are contractors and their salary and contract are much lower.

4) Actually, you probably should look elsewhere. As far as I can tell, your client is not paying the market rate too.
I think you're right. I need to start applying for other positions and see what I'm really worth.

In summary, your pay/compensation seems to be very low in the Bay area.

KlangFool
cbr shadow,

Law of compounding.

10% per year for 6 years

(1.1)^6 = 1.77

83K * 1.77 = 147K

Year Increase Amt
0 0.00 83.00
1 8.30 91.30
2 9.13 100.43
3 10.04 110.47
4 11.05 121.52
5 12.15 133.67
6 13.37 147.04

KlangFool
We're getting a bit off topic here, but year (1) I made 83k, not year zero. So for the first year I made $83k until the end of that year when I got a 10% raise and started making $91.3k. That's $91.3k AFTER year 1. I'm coming up to the end of my 6th year right now, so if I get a 10% raise I'll be slightly below the $147k mark that you outline above AFTER year 6. Your salary table almost perfectly matches my actual salary for each year.
Goal33
Posts: 1922
Joined: Sun Apr 12, 2015 12:30 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by Goal33 »

Seems like you are dramatically underpaid for your value and level of responsibilities. Ask for a 40% raise or go find another job that pays 200k+
MadDash335
Posts: 50
Joined: Thu Jan 08, 2015 6:55 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by MadDash335 »

Are you very happy in this current role? You seem to be underpaid at a struggling company, so in my opinion the happiness and security (?) of the current job must be significantly valuable to you to warrant staying for under-market pay. This seems quite low for Bay Area tech work.

If you're looking for a raise in times of trouble, you need to have a competing offer. I would recommend that competing offer being a job you'd happily take if the conversation goes south. When you hold all the cards, these conversations are easy- you either get the raise or leave...both are a win for you.

Good luck!
tunafish
Posts: 293
Joined: Mon Apr 26, 2021 9:47 am

Re: Negotiating a Pay Raise, Company Troubles

Post by tunafish »

What happens to you if the struggling company goes into the bit bucket?
random_walker_77
Posts: 1887
Joined: Tue May 21, 2013 8:49 pm

Re: Negotiating a Pay Raise, Company Troubles

Post by random_walker_77 »

This is the bay area, where job hopping is normal and the average tenure is only a couple of years. The biggest raise you'll get is when changing companies, and you're way overdue to test the market. You may decide you like your company, and are willing to take tradeoff comp for the privilege of working for your current boss, but you should at least understand how much money you're leaving on the table. Shop your resume around.
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