I suspect there are two types of people. Those who talk about money too often and those who don’t talk about it enough.
On the one hand there are those people who at every review period, every 6 months in my case, come over with cap in hand. Some of them perhaps genuinely feel undervalued and others just to negotiate for the best possible deal.
The other type sit and wait for the raise to come to them. They think that someone on high will recognise their worth, and recompense them accordingly. Actually usually those people need the recognition, and the money is secondary.
I had this conversation with a friend the other night, and he described how he felt undervalued working for his organisation and was considering leaving. I asked if he had asked for a raise, to which the answer was negative.
Constructing Value in Consulting
In consulting much the same happens. We talk about day rates and past experience as a means for constructing consultant value and this is total nonsense. The real question is – what business value do we bring to the organisation, and how can we measure that?
My preference when costing a project is to understand that business value and see if the resource blend required to provide that value is commercially viable. And this is why – in my opinion – Time & Material projects don’t work in modern consulting.
Suppose for example, that I know how to save your business a million dollars a year, and down to my 15 years of industry experience mean that I can do that in 4 weeks. Is there a day rate that could fit the value that I brought? Doubtful, but in a shared risk/reward scenario you may be prepared to share 25% of the reward with me.
Constructing Personal Value
Bringing this back to the example of my friend, I questioned him on the value that he brought to the organisation and he was able to quite clearly articulate the business benefits that he had reaped the organisational unit in which he worked. In addition, he had just been given additional responsibilities, which involved working at a level above that which he was capable of working when he started his job.
And yet he appeared willing to take the experience that he had learnt and leave the organisation and take it somewhere else, rather than negotiate for a better remuneration package where he is today. There are several possible reasons for this but I suspect that whilst he claims to be financially motivated, he is actually motivated by recognition, and feeling undervalued makes him want to move.
Masters of our own destiny
Segwaying back again into the consulting world, there is a huge problem in the world we live in, which is the pace of change and the commoditisation that this brings. Ten years ago, a decent SAP programmer could easily earn $1000 a day. Now I can pick them up on the contract market for under $500.
This has been caused by a number of reasons – global economic recession, the commoditisation of IT by the offshore outsource players and an excess of skills in the market deflating day rates. And it’s completely irrelevant because the best consultants are still in huge demand. I know self-employed SAP contractors working at rates north of $1600 a day.
Those contractors have been masters of their own destiny – they are people that I call “sticky”. A customer meets them and they always want them back – and they ask for them by name. They communicate effectively, have hard to find skills and they keep themselves ahead of the market (and their peers). And they key point is that they are able to articulate this value.
How do we articulate our value?
As I’ve just explained, our value in the market naturally declines. If you go to ask for a pay rise and when asked why, you say that you have a year’s extra experience in the market then the answer is that you are actually worth less in most cases.
Therefore your value needs to be obvious to you. If you are a consultant then how chargeable were you last year? How did you contribute to the organisation and how did that benefit the greater masses? Did you manifestly grow and what is your trajectory?
Then what are the market trends, what is coming? Are you abreast of what’s going on or do you just expect the work to land on your plate? Do you understand your competitors and the economic market in which we operate?
And the most important question: do you feel a bit uncomfortable? If you don’t, then you aren’t growing.
Translating value into earnings
I remember an example a few years back where a consultant was overlooked for promotion on my watch. When I told him he had not been promoted, he told me how disappointed he was and how he thought he was operating 2 grades above his current – and was able to clearly articulate examples of where and why he did this. I broke process and gave him the promotion.
So, if – like my consultant did – you can articulate your increased value then your employer would be crazy not to recognise that, and I have never met an example where they have not. What’s more, your employer will know your worth and will respect you more for it.
Just make sure you keep the conversation fact based and provide evidence if needed. If it’s not fact based then they may not agree with your valuation and you will be nowhere. And if you’ve done all that and they don’t see your value then you will need to take your value elsewhere.