The secret to growing your salary 500% in 5 years
Working in a salaried job is a lot like playing at a poker game. If you play your cards right and double down at the right moment, you can grow your stack exponentially.
When looking at average income growth rates over the last decade, it’s easy to think that being an employee will never make you rich. After all, the average pay raise in 2019 is expected to be about 3.1% . But that’s for average people. If you are reading this blog, you are probably not an average Joe on the street. You are thinking of financial independence and getting there in the fastest way possible.
Right from the beginning of my career, it was crystal clear to me that I did not want to be a salaried worker forever. My original intention was to save up enough capital to start my own business and work for myself, but along the way, my goal switched to pursuing financial independence. Even though the end goal is different, the path to get there is the same, I had to essentially earn as much money as I could in a short time and of course save most of it.
With that in mind, I became very mindful and deliberate about increasing my salary. I ended up growing my salary by more than 500% in 5 years within the same company! That shaved years off my path to financial independence. It may sound impossible, but here’s how you can do it too.
Work smarter, not harder
Gone are the days where you get a promotion simply for clocking in earlier than your boss and leaving the office later than everyone else. These days, with the amount of technology distractions throughout the day, not being able to finish your work within working hours might even be seen as a sign of inefficiency and low productivity. If you find yourself putting in long hours and not being recognized for your work, ask yourself if you are focusing on what really matters to the company.
At many companies, big projects and high impact changes are the most visible work with the highest levels of recognition. Fixing bugs and maintaining the status quo to keep things humming along smoothly often does not get as much credit as it should. To get promoted quickly, you have to focus more than half of your time, ideally 80% on high visibility projects that are the company’s biggest bets. If you are not involved in those projects, ask to be involved, and gradually pivot your contributions to be indispensable to the project. When performance review comes around, you can proudly include it as a badge of honor and negotiate for promotions/pay increments.
Go where the money is
If you are on a rocket ship, you will naturally travel further than someone who is on a bicycle. Even if you are standing still or walking backwards within that rocket ship.
Take a macroscopic view of the sector and industry you are in - is it growing, or is it stagnating? Presently, the highest growth industries are in technology, health, energy and media. If you are not in one of them, can you engineer a career move into those industries? Even if you are a sous chef, working in a tech company kitchen instead of a normal restaurant can have handsome rewards. For instance, a chef at Google is paid 23% higher than the national average!
If you are in the wrong industry or do not have the right skills to move, redevelop your skills. Go for bootcamps, internships, volunteer work and change your industries as fast as you can. At the current rate of change in the working environment, every company needs employees who can learn fast and adapt to new ways of working. Make lifelong learning a core mantra and move into the fastest growing industry you can join.
Already within one? Find out the top paying roles and departments with the best bonuses and try and move internally. Set up time to learn more about their work, volunteer to help out and express interest in moving when they have new openings. You can often get as much as a 30% increment just by changing roles within the same company.
The easiest way to grow your salary is when your company and sector is doing well. The profits at the top will overflow and trickle down to everyone at all levels in the company.
Develop expertise and go deep
Within your job, identify opportunities where demand is greater than supply. Double down on that area, go as deep as you can, learn everything about it and become the go-to person for all things related.
For instance, if you notice that a certain company goal requires an understanding of a new product X in order to achieve success, and very few people in the company understand product X - you’ve got yourself a winner. If you devote time to learning all about product X and volunteer to advise anyone who needs help with product X, you start to build expertise and be seen as a knowledgeable person with valuable inputs. Your competency in product X will eventually get rewarded as you help more and more people with it.
Don’t stop at one such opportunity, try two, or even three to maximize your chances of hitting a goldmine that keeps on giving. You often hear the same case studies or fables being told over and over again about someone’s work in a certain area. Make yourself part of such a powerful story and the financial rewards will come along with it.
Build a reputation for delivering and over delivering
To become the go-to person, you need to build trust and credibility. If someone hands you a task for the first time, complete it to the highest quality possible and over deliver whenever you can. For instance, complete it in one week instead of two. Or add in recommendations or suggestions they may not have thought of. Figuratively, it’s like wrapping up the results in a ribbon and delivering it on a silver platter to leave a great impression.
Over time, as you take on and over deliver on more projects, you will be known as someone who can be trusted to produce great work. When you start getting overwhelmed by projects over time, you can then start being a little more selective and choose the ones with the highest impact and visibility. Build the demand for your time and that next pay increment will be duly justified. In some companies, you may even be awarded occasional spot bonuses for completing high impact projects.
Spend your free time consciously
Use your lunch sessions, coffee breaks and happy hours strategically. Mingle or at least get yourself known in the right circles. Set up 1 on 1 chats with stakeholders from other teams and understand their goals, backgrounds and skills. Offer to mentor new hires, or help someone get up to speed in their new role. Build your network within your team and across the company little by little through hundreds of small interactions with different people. It all adds up later on when you need a favor or a recommendation from someone else. You might be an introvert like me, but do not eat lunch alone at your desk everyday.
Oh, and remember to distance yourself from negative naysayers who like to gossip and badmouth the company. They are not good for your mental health and long term career development.
Be nice to everyone
Make your workplace an enjoyable one - really get to know people and develop deeper relationships. Too many niceties are uttered at work in a superficial manner. “Hey how are you? (but I don't actually care to know).” Be genuine in getting to know someone and you may even gain some lifelong friends along the way!
Smile and make friends at all levels of the company. Don't be a snob that only manages upwards. Learn more about people: where they stay, their favorite restaurant, their partner’s name and even their pet’s name. Build small repeated interactions consistently, when you run into them in the corridor, or over the company chat system. A strong network keeps you informed of the best opportunities in the company and you never know who will refer you to your next role when they leave the company.
Engage in learning opportunities
Often, demonstrating engagement in company activities and active learning contributes to a good performance review. Many companies offer training courses, online e-learning or even just lunchtime talks. Take advantage of these resources where possible. Be open to learning new skills and processes, or even just understanding a project that someone else did. It may help you learn a new skill that your coworkers do not have, or open your mind up to a new way of thinking or solving a problem.
Knowledge is accumulated, and often not free, so make full use of company opportunities to learn from others. When you finally reach financial independence, this might be one of the aspects of working you may miss.
Negotiate during performance reviews
Even after you have done all the above, often doing good work is just not enough. You have to remind your managers about it. Make sure you have regular catch ups with your managers about the results you are producing at work. Make it crystal clear to them that you want to be promoted and take on bigger responsibilities. Ask them what it takes to get promoted, or receive a bonus payout and deliver what they ask for. Don’t wait till the week before annual reviews begin to do this - it has to be done consistently and throughout the year so that your name is top of mind when it comes to distributing the bonus pool.
Within a span of 5 years, I grew my salary 5X through role changes, promotions and annual pay increments, all within the same company. It enabled me to achieve financial independence by 35, years before I ever thought it was possible. I left on a good note with many lifelong friends and bosses I still keep in touch with, and the social capital I have built in those five years are still yielding dividends today.
Make a commitment to yourself today to strive towards multiplying your salary in the shortest time possible - don't resign yourself to a short stack like the average Joe.