How to Get a 6-Figure Raise with John Gates, Pay Negotiation Coach

(Intro Narrator at 00:00:00) Today, we're talking to pay negotiation coach John Gates about how you can get a six-figure raise. You're listening to Joel Beasley, Modern CTO.

(Joel Beasley at 00:00:15) We've got this title here of the podcast: How to Get a Six-Figure Raise. How do we actually do that? Make that real simple for me to understand.

(John Gates at 00:00:24) Great question, Joel. So I think it's important to know that it is way, way, way, way easier—by an order of magnitude—to get a raise when you're moving from one company to another than if you stay at your current position. And the reason for that is, of course, you're in the middle of all the HR curbs and blocks and policies and processes when you're an employee. So if you want to get a raise, companies have all these curbs in place to say, "Alright, you're getting a one-grade bump or you're getting a two-grade bump." That means you can get a maximum of a 7% increase, or maybe for a two-grade bump it's going to be 10 or 12% or something like that. Right? So when you're a candidate moving from one company to another, there are still curbs in place. They still have to think about salary equity. You moving from one company to another, you're going to join a company and be compared to all the people inside the company, but you just have a lot more latitude to move. So the easiest raise you'll ever get is the one that you negotiate when you're moving from one job to another, yet most people waste that opportunity. They don't negotiate. And I know because I was the guy on the other side of the negotiating table for 30 years.

(John Gates at 00:01:49) I was the head of global recruiting for multiple Fortune 500s. I was exclusively responsible for all executive recruiting at those companies, and I oversaw the whole recruiting organization and all of the deals that they were doing every single day. And we would frequently be extending 200, 300 offers a month. And at that kind of volume, you get a sense for what's going on and what's happening. So when somebody's moving from one company to another and I'm doing the deal on behalf of the company, I'm negotiating for the company against the new hire that's coming in. I track when people negotiate and when they don't. And over that course of 30 years of tracking, 80% of the people that I extended offers to, even at the executive level, never negotiated at all. The other 20% split in about two even camps. 10% negotiate effectively, and the other 10% negotiate in such a way that it's so bad they hurt themselves in some way. So, and I think there are reasons for it. There are reasons for it, especially at the executive level. People are concerned about the risks of negotiating the pay. They don't want to lose the offer first and foremost, and there are other reasons why people don't negotiate. But—

(Joel Beasley at 00:03:24) What were that 10%? Can you dial in on that 10%? I want to know what—who—what were the really bad things that they would do? We'll get to the good things, but just entertain me for a second.

(John Gates at 00:03:33) These are great stories, right? So the most common way that people mess things up in negotiation, I think, is changing their personality when it comes time to negotiate. This has happened many times in my experience. So, in fact, I was negotiating a deal for a chief financial officer maybe seven or eight years ago. This one still sticks in my mind. And so we're sending the offer to this CFO, and he becomes somewhat aggressive on the negotiating side. And I think a lot of people think that in order to negotiate, you have to become aggressive. Like, you're going to dominate the conversation. It's a high dominance that's going to win the day, or you're going to be disagreeable, and that's what's going to get you the offer. The problem with that is once a CEO decides that he or she is going to hire someone, they think they're hiring this person that they interviewed. And when I go back and I share the story of, "Well, he's negotiating. Tell me what's going on." Alright. And I tell the story to the CEO to get additional money approved or to broach the subject of adjusting the offer. The CEO will—they'll step back. Hiring managers at all levels do this. If the candidate changes their personality, now they're questioning the selection decision.

(Joel Beasley at 00:05:06) Not even about the money. It's just the selection decision.

(John Gates at 00:05:10) This can cost you the offer if you do this, because hiring anybody at any level, especially at the C-suite, is very high risk. It's very high risk because if you pick the wrong person, it's going to affect you in a very, very negative way as the hiring person, your boss. And in this case, the boss is the CEO. Who's the CEO's boss? The board of directors. The board is going to approve any C-suite offer. They know the person's coming in. If the CEO picks the wrong C-suite person, all kinds of initiatives come off the track. You know, things happen that are bad for the business, bad for the CEO's reputation, bad for the CEO's financial bonuses at year-end, which are significant. So they're very risk-averse in hiring people.

(John Gates at 00:06:06) And so they go through an extensive interview process. This, by the way, is why sometimes they'll go through seven or eight rounds of interviews before they get selected, because the hiring manager is trying to reduce that risk of making a mistake. So now we're negotiating. You've been selected. We're negotiating, and I'm explaining to the CEO, this person has changed their personality. And now the CEO is wondering, was all that stuff during the interview just smoke and mirrors? Is this the real person, or was that the real person?

(Joel Beasley at 00:06:45) Or is it incompetence I'm hiring?

(John Gates at 00:06:48) Yeah. I'm questioning whether he or she is going to fit with the leadership team, with the team, with the investors, with the customers, with everybody. And I've seen a lot of deals blow up because of that personality shift that happens. You know, sometimes people—maybe they agreed early on to a number, and now that we're negotiating, it's three times that or it's some ridiculous amount. Or they move the goalposts. This has happened more than once. Even with some of my salary coach clients, once they get a taste for negotiating success, they will tend to move the goalposts down, and I have to counsel them and say, "No, you're stepping in a risk zone here." What I mean by that is, we'll go back and we'll say, "Well, if you can offer this, then we'll accept." And so they offered that. And now instead of accepting, the client wants to say, "Well, they accepted that too fast. Maybe we should ask for more."

(Joel Beasley at 00:07:55) Oh, that's a bad idea.

(John Gates at 00:07:56) It's disingenuous. It creates problems, and they might say yes. You might still get the job, but you're damaging your reputation. You're somebody that doesn't keep their word anymore, and that's not good. So that's one of the things that I do: I help people to avoid these common mistakes and landmines. I've got an excellent radar for when something might blow up because I've seen just about every way it possibly can, multiple times, right?

(Joel Beasley at 00:08:27) I was surprised to learn how Microsoft Unified Support works. Apparently, Microsoft decides your support fee based on the amount of software that you buy instead of billing you for the actual support hours that you use. This means that you pay for support that you might never use. The pay-as-you-go model is a much better model, but Microsoft doesn't offer that. I did find a company that does offer this, and they're called US Cloud, and 50 of the Fortune 500 use them. Not only is it better, faster support with all US-based engineers, it's also cheaper. 94% of US Cloud clients report saving a third or more when switching from Microsoft Unified Support to US Cloud. Now you'll just have to figure out what to do with all of that extra money. If it were me, I'm responsible. So I'd reallocate that money to improve my team. What would you do, Josh?

(Intro Narrator at 00:09:14) I think I'd just try and buy a ticket to space.

(Joel Beasley at 00:09:17) Alright, Astronaut Josh. For out-of-this-world savings, visit uscloud.com to book a call and find out how much your team can save. So let's talk about the 10% of people that are doing it effectively. What are they doing?

(John Gates at 00:09:32) Yep. Well, first of all, I think they are collaborating. They're not confrontational in the process. This is something that a lot of people misunderstand about negotiation, Joel, especially at the executive level. There is a way to negotiate that does not put your relationships at risk or your offer at risk. And what I teach in the Salary Coach Method is a collaborative approach where you're asking a bunch of questions. You're discovering what could be—you know, what could be possible here or there. You're trying to create a win-win with the person you're negotiating. You're not twisting their arm. Negotiation should not be a high-stakes game of chicken, which is what most people think it is. It's not adversarial, which is what most people think it is. And so if you think that it is those things, it's no surprise to me that 80% of people don't want to do that. So the people that do it really, really well are good at engaging in a casual conversation that goes something like this: "You want me to be here. I want to be here. I have a few obstacles. Help me to get around those." And it starts a collaboration process. So what I do with my clients, I teach them to discover the leverage that they have, the questions that they should ask to create this discussion, to identify the obstacles, how to communicate that, how to go through that process in a way that doesn't put your offer at risk. So you can imagine if you approached it that way, they're not going to say, "Oh, ick, yank the offer." They're going to engage in a conversation with you. And through that process, you discover what's still on the table, what they can do. You know, you have to keep in mind, once they offer you the job, they want you to say yes.

(Joel Beasley at 00:11:41) Yeah.

(John Gates at 00:11:43) And that, by the way, is a big mistake that the 80% make. They get the offer, they say yes, and they lose all that leverage because, hey, they want you to say yes. You can withhold that for a little period of time and get some extra stuff, usually.

(Joel Beasley at 00:12:02) Yeah. I like that you spend time here, that you're sharing your experience, that you're writing, you've got groups people join and all that because you're a coach, right, in this. So tell me a little bit about—let's do a quick plug for you and what you're doing. If people want to work with you to improve their salary, how do you do that? What does that look like?

(John Gates at 00:12:21) Great. So there are a couple of ways that I work with people. One is called the Salary Coach Academy, which is a collection of recorded video lessons on how to talk about money at every single step of the process from the point when you're applying or somebody first calls you and they ask you, "Joel, what's your pay expectation?" Most people don't know how to answer that question without cutting their own throat. You want to move forward, so you tend to lowball yourself at this stage, and then you paint yourself into a corner. And so most folks, even senior-level people, are beginners at talking about money and their own money and their pay. So I guide you step-by-step through that process in the academy, and I show you how to talk about money at every single step of the process: in interviews, at the offer stage, counteroffer, all that stuff. So the Salary Coach Academy is there. As an upgrade, you can do private coaching with me. So this is what a lot of senior-level people want to do because their pay packages are so complex. There's equity positions. There's multi-tiered bonuses. There's all kinds of fronts that we can negotiate on. C-suite people are leaving six figures on the table all of the time, and they don't even know they're doing it. So a lot of people want to hire me as a coach to guide them through the process. And some will hire me to walk them through that entire process. They're just starting their search. They want coaching about how to get through this phone screen that's ahead of them, how to prepare for the interview that's ahead of them in addition to the negotiation pieces. Some people have an offer in their hand or they just found out they're getting an offer tomorrow, and they want my help. And so very often, people will call me—I've never heard their name before—they'll call me or they'll email me and say, "John, I'm getting an offer tomorrow. Can we talk?" And the answer is, of course, yes. We can do that. So that's how I work with folks. Also wrote the book behind me, Act Your Wage.

(Joel Beasley at 00:14:29) That's a good title, by the way.

(John Gates at 00:14:31) Oh, thanks.

(Joel Beasley at 00:14:40) Can people get that on Amazon?

(John Gates at 00:14:42) Yeah, they can get it on Amazon, and it's a good overview of the Salary Coach Method and how it works. So if you just want to learn some of the key principles, that's a great place to start. But otherwise, people can reach out to me. Email is a great way. You can connect with me on LinkedIn.

(Joel Beasley at 00:14:59) Yeah. I like the title because in my gut, I could feel the truth in it. You know, after running multiple businesses and hiring lots of people and doing all of that, I was like, "Yeah, there are definitely people who need to learn that concept of acting their wage."

(John Gates at 00:15:15) Yeah, yeah. Yeah. I think it's important too, Joel, just to recognize the negotiation—and pay negotiation specifically—is a skill anyone can learn. Anyone can learn this. It has a lot of nuance, but really, once you learn the secrets, the process, everything's going to make sense to you all of a sudden. And if you can learn this skill, it's going to pay you money throughout your career, not just in your next move, but every move after. It's a good investment.

(Joel Beasley at 00:15:45) Yeah. What does the academy cost to get into there?

(John Gates at 00:15:50) There are two ways to pay. One is monthly, and the other is annual. So annual costs the same as three months. So if you think your search is going to last three months or longer, it's just good to buy the annual. So it's $249 a month or $749 for a year. And, believe me, that's—

(Joel Beasley at 00:16:10) Just a signature number on the line. Come on.

(John Gates at 00:16:13) Yeah. You know, it's crazy. And so a lot of academy people, they'll join the academy. And then when they get to offer stage, they start to get a little bit nervous. Like, "I know what to do, but I'm not completely 100% sure." And sometimes people will upgrade to talking with me at that step after using the academy and just get through everything else.

(Joel Beasley at 00:16:33) And, honestly, that's what I would do. I mean, I've made a living off of going, finding experts, and then asking them questions. But yeah, because look, as much as I negotiate deals regularly as a business owner and selling companies—negotiating either raising the money or selling the business to another company, going through all of that—is not the same as if I said, "Okay, you know what? I'm going to put my entrepreneur stuff on the back burner, and I'm going to go work at X or Microsoft or some big company." I have no idea what's going on up there. I've never been up there. I don't know, and I know enough now in my career at 37 to know how little I actually know. And so when I pick up on that discrepancy, I'm like, "Let's go talk to John. Let's go talk to somebody who knows what's happening behind the scenes, who's seen it a thousand times." And then at that point, I found, John, that the skill is really to shut up and do it, because so often I'll want to be like, "Well, they said that, but then, you know..." And then I realized if I just stop talking and do it, it works.

(John Gates at 00:17:41) It is so funny, Joel. Like, most of my clients are senior-level people who negotiate very well. They already know how to negotiate, most of them. But even if you don't, you can still learn this. Right?

(John Gates at 00:17:53) But the difference is the stakes. I have head of sales clients who do negotiation, multimillion dollar deals every day, every week, sometimes $100 million deals. I've had a couple of clients that were senior level recruiters, recruiting leaders who are on the other side of the negotiating table. They know this stuff. But once the stakes are personal, it's very, very different.

(John Gates at 00:18:22) Like, if you were a sales leader and you go into your boss's office and the boss says, Joel, you're fired if you screw this up. Now go make the deal happen. Those are the same kind of stakes that you feel in a salary negotiation because you know if you screw it up, it's personal. All the people that are depending upon you, the mortgage, the car payment, the kids' education, all that stuff is hanging off of this job offer. That is why people don't want to risk negotiating.

(John Gates at 00:19:00) But there are very, very low risk techniques available. They just think it's high risk, and so they say nope. They nope right out of that. They might poke at it a little bit just to see if there's any movement, any flexibility, but most people, even if they are skilled negotiators, they're not prepared to handle that anxiety of personal stakes.

(Joel Beasley at 00:19:27) Yes.

(John Gates at 00:19:27) And that's why they need me.

(Joel Beasley at 00:19:29) Well, I fully agree. Yes. Yeah. Because that's when you get squirrelly and make bad decisions.

(John Gates at 00:19:35) Exactly. That's when you leave all that money on the table. You know, when I was a recruiter, I've been laid off a couple of times already. And I discovered that one of the things I could do to try to protect myself against that was to track my success as a recruiter. And one of the things I started tracking was how much money people were leaving on the table because I wanted to say, look at the negotiation savings I had for the company.

(John Gates at 00:20:04) I would be able to, let's say, I was extending an offer to a technologist for $160,000, but I had approval to go up to $185,000. And I had a $10,000 signing bonus already approved in if needed, in case, just in case. Right? And I would get these negotiating ranges pre-approved so I didn't have to go back and get things re-approved later. I found that that slowed things down, and sometimes people would say no, and it would mess up a deal, and then we'd have to go all the way back.

(John Gates at 00:20:41) So I would get negotiating range pre-approved the first time and then use as little of that as possible, and then go back and say, well, I closed at $165,000. I could go up to $185,000. That's $20,000 of negotiation savings. And so I would set a goal to cover my entire salary, my annual salary every month in negotiation savings, and I was hitting that most months. And that's why I started getting invited to train other recruiters on how to negotiate on behalf of the company.

(John Gates at 00:21:17) And then when I became a leader, I set goals to cover the entire talent acquisition budget with negotiation savings from the team, so I would have them track this. That's how I know that C-suite folks are leaving six figures on the table a lot, and they don't know that they're doing it. The average person, mid-career person, probably leaving five figures on the table. That could be $12,000. It might be $72,000 or anything in between.

(John Gates at 00:21:50) I've seen it all.

(Joel Beasley at 00:21:52) How long have you been doing just the coaching stuff?

(John Gates at 00:21:56) I started doing Salary Coach about three years ago as a formal business launch. But probably my whole career, I've been coaching friends, family, things like that. I left money on the table myself when I was young in my career, and that by itself is an interesting story. But when it's your deal, you're just tempted to be done with the chaos and done with the uncertainty, and so you leave money on the table. But about three, four years ago, I thought, I wonder if I could do this for people that I don't know. And that's how Salary Coach was born three years ago.

(John Gates at 00:22:41) Before that, I just went out to LinkedIn. I found 10 senior level job seekers that I didn't know, and I said, I want to coach you for free. Let's do a little pilot. I want to see if I can help you to get more money. And every single one of those 10 had a gain.

(John Gates at 00:22:58) The smallest gain was 9,000 or so, just shy of $10,000. The biggest gain was north of $50,000. I think it was $52,000. And as soon as I saw that, it's like, wow, 10 out of 10, I think I have a business here.

(Joel Beasley at 00:23:10) For sure. I think—

(John Gates at 00:23:11) I have something valuable to offer that nobody else is offering. And that's when I came up with Salary Coach and started doing it. Made a lot of mistakes along the way, but now I've got the method all dialed in, and it's great. I'm truly enjoying it. It's a business I can do from anywhere too, which is really cool.

(Joel Beasley at 00:23:31) And so your aim, you just enjoy living out your purpose, and that's where you're at right now.

(John Gates at 00:23:39) Yep. I have two different consulting businesses. So the other one is called Recruiting Transformations. And in that business, I help companies to fix their broken recruiting process. But there's a different level of passion.

(John Gates at 00:23:53) I enjoy doing that. I like fixing problems. But when you're helping a person in a way that transforms their life, that's cool. That's a new level of cool. I am enjoying it so much.

(John Gates at 00:24:12) So at this point, Salary Coach is beginning to eclipse the first business, and I think there's certainly a possibility I'll just mothball that other thing and focus on this completely as Salary Coach continues to grow. But, you know, at this point, struggling a little bit with being a one of one. I'm unique. There's nobody else doing what I do, so people don't know I exist.

(Joel Beasley at 00:24:38) Well, they—

(John Gates at 00:24:38) Will now. I hope so. They don't think, I'm about ready to negotiate my deal. I wonder if there's a negotiation coach out there who could help me.

(Joel Beasley at 00:24:50) Oh, I think it'll definitely be—Yeah. Like, for the first three years of this show, it was me going out to people, you know, but then eventually, you do it for years and then people start to just come to you. And then—Yeah. Yeah. That's been a nice—The

(John Gates at 00:25:04) The book really opened things up for me now. I'm getting a lot of speaking opportunities because of the book, and that's starting to warm the world up that I exist. Yeah. And it's just amazing how many people I've helped and how many people come to me every single day asking for advice. And it's a blast, Joel.

(John Gates at 00:25:25) I wouldn't want to be doing anything else. It's so much fun.

(Joel Beasley at 00:25:29) One thing I did want to touch on, I didn't want to leave out our startup friends. And I'm talking, you know, maybe 10 people to a hundred, early stage companies that they're living on a prayer financially. You know, they're trying to figure it out. It's not like Apple. If I was negotiating a salary at Apple, they're a publicly traded company.

(Joel Beasley at 00:25:52) I could see how many hundreds of billions of dollars they have in cash on hand that they're doing nothing with. That's a different situation than, you know, you and the two to three people that you've got you're starting up. How do you negotiate at small companies versus big companies? Have you ever worked for small companies? Do you have experience there?

(John Gates at 00:26:11) Oh, yeah. Okay. Yeah. I think it's really important to understand who you're negotiating with. And when you are looking to join an organization, you want to try to understand, first of all, what is your boss or your future boss? What are they hoping for? How are they rewarded? How are they paid? So in a public company, a publicly traded company, for example, you're going to have traditional pay vehicles like pay. There's going to be a defined, probably, annual cash bonus program.

(John Gates at 00:26:47) There might be an equity program that is fairly well defined. In a private equity company, those are like house flippers for businesses. They, you know, they come in and they buy a company with the idea that they're going to hold it for three to five years and sell it. So if you are a CTO interviewing with a private equity company, you better understand what their exit strategy is. The people that own that business want to sell it for a profit.

(John Gates at 00:27:19) Their whole business model is to improve the value of the business so they can sell it for a profit. Now if you're the CTO and you're interviewing, you should be wondering, well, okay. How am I, as the CTO or any other C-suite executive, how am I going to improve the value of this so that they get paid? Now there, you might want to negotiate your own golden parachute because two, three years from now, the business is sold. What if the new owners want to install a whole new C-suite?

(Joel Beasley at 00:27:52) They usually do.

(John Gates at 00:27:53) Or what if they just wanted the intellectual property of the business? You have to negotiate with that in your mind. Now startups, you need to understand where they are. Is their goal to grow it and sell it? Is their goal to grow it and go public?

(John Gates at 00:28:12) What's their goal? How are you going to help them to get there? And startups are cash poor, so they're going to tend to leverage an equity sort of story. They're going to say, well, we can't afford to pay—you know, our salaries are at the thirtieth percentile because we're cash poor. But if we hit certain milestones, we're going to pay out these cash bonuses.

(John Gates at 00:28:39) We're going to give you an equity position that gets refreshed over time. There's just different philosophies. So I think it's important when you're talking about pay to shift into a total pay language as fast as possible. Don't think about salary as much as you would. That's why I talk about pay negotiation, not so much salary negotiation.

(John Gates at 00:29:07) Because every single company is going to have this different mix of how they're going to pay people. And if you say, my minimum salary is $220,000, what if they offered you $180,000 but a $2 million equity plan? Would you take that, or did you just close the door on yourself by saying my minimum is $220,000? So you have to just take a step back, take a breath, try to discover how they pay people, what their philosophy is, and what their goals are as a business. And you'll always make more money if you can show them how you're going to make them more.

(Joel Beasley at 00:29:49) You know what I was surprised at with my businesses? How little employees valued equity. I was like, what? I was like, oh, I was fine by it because I'm like, alright. More equity for me.

(Joel Beasley at 00:30:02) But the fact that they didn't understand how to value it. And that was just a surprise to me. I stopped wondering why and I just moved forward.

(John Gates at 00:30:13) Yeah. You have to, as a business owner as well, you have to get good at explaining the value of it and justifying the potential, but even modeling it out for them so you can say, if this, if this, if this, then this is what happens to the business valuation, and that's what happens to your equity stake. And it can really, if they understand it, as a small business owner, you can really get a lot of discretionary effort out of people. They'll see that this is a big opportunity for them. If they don't understand it, they're not going to give all that they could.

(John Gates at 00:30:52) If that makes any sense.

(Joel Beasley at 00:30:53) Well, that goes even if they're just working on salary. If they don't understand where the business is going and what's trying to be accomplished, then they're just not going to be able to do it.

(John Gates at 00:31:02) Yeah. Yeah. Several years ago as a consultant, I helped a pharmaceuticals company to position the value of their equity package. Because the head of talent came to me and said, we're getting so many of our offers declined. We can't figure out why, but we think every bit the recruiters are just selling the salary.

(John Gates at 00:31:22) And we have this amazing equity plan that they're not good at describing what that's worth or how that's worth. So, worked with them to create a new offer process and model out the value of the equity plan over—what the historical value has been, what they think the future value is going to be with a bunch of caveats, and they're saying, this is just a model, but, you know, it's not a promise. But if these things happen, this is what the valuation could do. And it helped people to understand the total package better. But that's what candidates need to do.

(John Gates at 00:32:03) They need to understand the value of the whole package and then understand too that some pieces of that puzzle can be moved and others can't. You might discover that there's a lot of flexibility in the salary, but if they start saying, we want you, but we're maxed out on the salary, that might mean that you can negotiate in other areas, but not on salary. Maybe you're going to get a signing bonus or maybe extra equity or upfront equity, or you can get the initial, maybe, bonus payout guaranteed at a certain level or something like that.

(Joel Beasley at 00:32:43) And then what tips do you have if you're, you know, a lot of this conversation was centered around the negotiation when you're going to a new company. That's what we started with. What differences are there, or how do you do it when you're within your company? Because a lot of people like the culture of their company. They have fear of the unknown of, you know, what if it's a significant pay bump, but I go there and they're all rude?

(Joel Beasley at 00:33:10) You've got all of this mystery that's out there, but then there's the company that you know. And, you know, I talk with people who hop jobs every three years. I talk to people who've been at IBM for 30 years. And I wouldn't say that there's necessarily a wrong or a right way to do it. But what are you thinking about when you're trying to get an internal raise?

(John Gates at 00:33:30) That's a really good question. It's a different process because you have a different kind of leverage. When you are external, you have a lot of other leverage that you don't have internally. This is why it's a mistake to say, if a company says, we're going to promote you in six months if you take this offer, or this bonus program is going to be available next year or things like that. Companies often don't keep those promises.

(John Gates at 00:34:02) But if you're currently in a role, the only leverage you have is if they don't satisfy you, you're going to quit. And that's way too much for most people. They don't even want to pretend that that's leverage for them. And I've worked for companies that say, well, you're unhappy. Good luck.

(John Gates at 00:34:27) Go quit. And they just don't care as much. So—

(Joel Beasley at 00:34:32) I see that a lot, actually. I see that a lot. They just, like, say, okay. Well, your position can be replaced for this. So—

(John Gates at 00:34:39) Yeah. See you. Bye now. If you—and they'll test how serious you are by doing that. And then you'll go get another job, and then they'll come back and say, no, we were—here's your money now. They'll give you a counter offer to stay. That's probably the biggest mistake you can make. It's a huge career mistake to use an offer from another company as leverage on your boss to get a raise. That is a big career mistake because now your loyalty will always be in question.

(John Gates at 00:35:14) They don't—you've got an offer for another company. If they don't give you what you want, you're gone. They feel blackmailed, but they also feel like the timing is really bad. We can't afford to lose Joel right now. Two weeks?

(John Gates at 00:35:28) Oh my god. This whole thing is going to come apart if Joel doesn't stay. Right? So they feel blackmailed, and they're going to come back to you sometimes and give you a matching offer, or they'll give you what you've been asking for for the last couple of years. Some people think that's the right leverage, but they just don't like the timing of your departure.

(John Gates at 00:35:52) Once the timing of the departure becomes a little more comfortable for them, they can let you go if there is a layoff that comes up. And they're trying to decide who they're going to keep and who they're not going to keep. Are they going to keep the, you know, the loyal person or the person who four months ago had one foot out the door? He might leave. We think he might leave.

(John Gates at 00:36:17) Anyway, so this happens a lot. They may not trust you with really important projects going forward either. They're probably not gonna promote you. So these are all big political risks, and that's why I say it's bad leverage to use. Here's something that you could do instead that gives you similar leverage that is really—it's softer, but it doesn't bring your loyalty into question.

(John Gates at 00:36:44) You can go into your boss's office. Let's say you're in a situation where the market has moved. You know you're making $300,000, but you know that what you do is being paid 20% higher than that. $360,000 is probably where the market is right now. You want to go ask for a raise, but the company is saying no raises this year, or the company is saying we're limiting raises to 3%, 4%. That's not gonna close a 20% gap.

(John Gates at 00:37:16) So instead of going and getting another offer, you want to stay at the company. You go into your boss's office and you say, "Boss, I'm getting a lot of phone calls from recruiters. Right now, I'm shutting them all down, but they're throwing insane numbers at me. Like, it's getting uncomfortable. It's getting harder for me to say no to these calls. I really want to say no to these calls because I love working here, and I love working for you, and I want to keep doing that, but it's a distraction. Can you help me to make this distraction go away so that I can continue to hang up in their face when they call?" So you are positioning yourself with this style as you're loyal. You're on the team.

(John Gates at 00:38:07) You love what you do. You're not thinking about making a move, but this money thing is just a distraction. You want your boss to help it go away, and you're enlisting your boss as an ally in this process. And that's one way to do it. Here's another way. Let's say the market hasn't moved, but you still want to get a pay raise.

(John Gates at 00:38:30) So I think one of the best ways of doing this is to expand your scope. So your job is doing scope A, but you want more money. So what you can start doing is taking on projects that aren't part of scope A. You start taking on things. You discover what your boss really wants to happen. What are they really passionate about? Do they have a pet project that they really want that would be very valuable for them, maybe gonna help them get their bonus at the end of the year? You can say, "Hey, I want to help you with that. Let me take that on," and you start doing things that aren't part of your normal scope.

(John Gates at 00:39:20) And if that's more than just temporary stuff and you've expanded the scope—maybe when you were hired, you were managing one team and now you're managing three teams, right? If your job description changes quite a lot, now you can go to your boss or you can even go to HR and say, "Hey, here's my original job description. Here's what I'm doing now. Can we regrade this? Because I think I'm doing a different job now." You can use HR to do that with you. You can go to your boss and say, "Hey, I've taken on a lot of extra stuff here. I think my job is no longer the job I was hired for. Like, I'm doing a different job now. I'm doing a bigger job now. Let's discuss." And you want to do this off cycle. And by that, I mean you don't want to do this when you're getting your annual performance review.

(John Gates at 00:40:17) So here's the reason why. It's especially true in big companies. There's a lot of bureaucracy. What happens is the executive team will approve a budget for raises. That budget goes down to leaders in the company, and they'll say, "Alright, here's your budget for raises." You can sometimes spread them out or there's a formula or whatever, but you're limited. If I give you a lot of money, it means I can't give some to somebody else in that process. So the time to get a raise is not during that. You're gonna get the raise that everybody else gets during this time.

(John Gates at 00:40:55) You might get some extra whatever, but if your scope has grown, you want to raise that conversation outside of this process, outside of this cycle so that it doesn't get bundled into this. You're gonna lose money if you do it that way. It's much, much better to do it off cycle to get a one-off adjustment, and then you can still participate in the annual merit cycle, whatever that happens to be. Does that make sense, Joel?

(Joel Beasley at 00:41:27) That's good advice. I'm taking notes, man. I'm like, alright, I think we can...

(Joel Beasley at 00:41:31) I'm taking notes, man.

(John Gates at 00:41:33) That are really helping the folks that are listening here, and somebody's gonna use this to make a lot of extra money. That would make me very, very happy.

(Joel Beasley at 00:41:41) That would make me very happy too. Yeah. There's different points in your career, and this is something it doesn't come up enough for you to intentionally spend time to get good at, but it comes up enough to where you should at least go find someone who knows how to do it. And it's like a repair at your house, handyman repair. It's like sometimes things break, and I'm like, look, I could watch a YouTube video and I could spend a weekend or two doing this, or I could just call someone, pay them, and just make my life easier.

(John Gates at 00:42:11) Yeah, yeah, exactly.

(Joel Beasley at 00:42:14) Well, John, this is great. So you've got the—can you reiterate the academy and then the private coaching and how people can figure that out?

(John Gates at 00:42:22) Yeah, yeah. So the academy is at salarycoachacademy.com. That's really easy to find. You can also email me at [email protected]. That is an easy way to get on my radar. You can also connect with me on LinkedIn. There's all kinds of free content that I produce every week on LinkedIn, and that's a good way to stay in touch with me. When the time is right, you can hit me up, and I will help you to make more money.

(Joel Beasley at 00:42:50) Salary Coach Academy, John Gates. John, thank you so much for doing this. We made a podcast. How do you feel?

(John Gates at 00:42:57) I feel great, man. This has been a fun conversation.

(Joel Beasley at 00:43:00) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you would like to hear discussed on the podcast, either add me on LinkedIn or send me an email: [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.