When Getting A 20% Raise Kind Of Sucks

Just to start things right, I haven’t gotten a 20% raise recently.  The one and only time, and the focus of this story, was in 1999 I think.

But the lesson learned is still applicable today.

My first job out of college was working in a call center.  I started at a pretty low salary, but the company I was working for had a great reputation in the IT industry, and many an IT professional used them as a stepping stone to bigger and better things.

After a couple of years there, I was itching for more and ready to be one of those ‘stepping stone’ stories.  I would have stayed there, but they stopped my training path and they declined my request for anything more than a 3% raise.  So it was time to jump.

If you go back and recall, that’s right around the time when the entire Y2K thing was heating up.  Companies were basically prepared to address anything on the hardware side of thing by replacing everything.  So, it was a good time to be an expert in Windows server, desktop, and networking technology.

I interviewed around, and I happened across a very small company, just growing in that area, looking to hire their third person.  They were a company of about fifteen people, with most being on the application development side of the fence, but they wanted to grow the hardware side of the fence, so they took a look.

Being that the company was so small, I was a little leery, as I was coming from one of the biggest IT companies in the world.  Yet, the minute I sat down with the owner, I knew I had a great fit.  We clicked and the interview was more of a talk.  He was someone that really earned my respect, and he still has it today, even though I haven’t worked for him in a number of years.

When it became clear that it was a fit, we started talking salary.  He asked what I was looking for and I threw out a number that was roughly a 40% increase over what I was making.

He didn’t balk and agreed to the number.  I was ecstatic as that was a pretty huge raise.

After about a year, we sat down for lunch for my review, which was great, and at the end he handed me an envelope that included my new compensation number.  I about fell over when I saw it was 20%.

Another year passed, another lunch, another envelope, and this time it was around 15%.  I’d over doubled the salary I left my last job for within two years.

Around the time of the second salary increase, I offhandedly mentioned that I was looking to start my MBA.  I told him simply because I wanted to give him a heads up that I’d be focused on other stuff after hours (and being a small place, there were many times when we were needed after 5pm).  He offered to pick up the tuition.

At that point, I was still only around 25-26, so I didn’t see the flip side of this. While the salary increases were great and getting a free MBA where I’d been all set to pay the roughly $10k, it only took until I got a few years older to realize that I’d likely underpriced myself from the beginning.

I likely lowballed myself when I asked for the initial amount.  He knew, though, that eventually I’d learn my market value, so the initial two increases were to make sure that I was still happy, and let’s face it, three big raises (including the ‘jump’ raise I got when coming aboard) in that short of time was going to be seen as great.

Did I feel taken advantage of?

Not a single bit.

After all, I got exactly what I asked for.

By the time I got the second increase followed by the roughly $5,000 per year in MBA tuition, I was right in line with what salary comparison websites were saying was standard, so while I likely undercut myself, it was only for two years, and the gap definitely narrowed the second year.  All in all, I probably could have gotten $5,000 – $10,000 more those first two years had I gone in with a better number.

But, since I loved the work and loved who I worked for, I never have felt bad about it at all. Still, it serves a lesson to make sure you know your value going in.  I fell trap to the big increase I was getting, not really believing that I could have gotten even more had I asked.

So, while I look back at that 20% increase as the pure awesomeness that it was, a part of me looks back and realizes that a portion of that was making up the fact that I undercut my value.

What was the biggest raise you ever got?  Did you ever feel that a big raise meant that you’d been working below value prior to the raise?


12 thoughts on “When Getting A 20% Raise Kind Of Sucks”

  1. After I graduated from college, I went from a retail management job to my analyst job, which was a pay increase of around 100%. Don’t know if you can count that since they are completely unrelated, but it was still good.

  2. I’ve actually never gotten a raise, I’ve just switched jobs into a position that makes more money. I make about $4/hour more than I did last year, which is alright but nothing to jump up and down at. I’m hoping I can bring that up when I graduate.

    • That’s a pretty good raise for still being in school and all. I’d be jumping up and down if I got a $4/year raise. I could live with that for the next few years. Figure five years of that and you’d be making $20 more an hour, or $800 more a week, or $40,000 more a year based on a 40-hour week. I’m dreaming 🙂

  3. Man that stinks, but that is part of life to live and learn. We learn from our mistakes. If you had known how much you were worth, the small company might have balked at how much you were asking…. No harm no foul…you got a great post out of it atleast 🙂

    • Thanks! Yeah, in the end, I have no regrets about working there. I just realized afterward that those great raises were probably not as great as I had thought at the time. You live and learn.

  4. maybe, the memory is fading, but I do not remember a real big raise. I think my biggest raise was 10%. My real increases came when I was in business. It was the first opportunity to see a direct correlation with my efforts and results.

  5. When I switched positions most recently, the new position came with a salary that was 33% larger than what I had been making. I don’t know if it was a “raise” per se, as I did switch positions, but I stayed within the company.
    Our company gives raises every year at a rate of 3% of total payroll costs. In order for me to get a raise larger than 3%, that means someone else has to get less. However, a couple years ago I did get a raise larger than 3% and I will this year, too.

    • Good stuff. I guess that’s a quick and easy way to see how you’re doing compared to the rest of the employees.

  6. Last year, I saw a 10% raise and I’m expecting a pretty good raise again this year. I definitely think that I’ve been underpaid for the last few years, but at least it’s getting sorted out pretty quickly?

    I sometimes wonder how much of a salary increase I would get if I tried to change companies. Maybe I would get my compensation bumped up to $150k? Who knows.

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