Over the past two years, I've built two businesses: a marketing and design agency that has grown to include a number of amazing team members, and my side hustle, an online shop that sells quirky, one-of-a-kind gifts.
Building and operating these businesses has never been a one-person effort. I've hired hundreds of freelancers to help me plan, write, design, and do countless other tasks. Along the way, I observed that some the best people don't ask for raises--ever!
Your best freelancers and team members may never ask you for a raise, but it's in your best interest to give them one. Keep reading to learn why, plus how to determine when someone shouldn't get a raise.
It shows your appreciation
At its core, money is a reflection of value. So it follows that when you offer to give someone a raise, you're showing the person that you value them.
Raises communicate to your team member that you support them and wish them success. It tells them you value their contributions to your company.
Each person you hire is working to build your business and fulfill your creative vision. They deserve to be honored and appreciated, and giving an unexpected raise is a great way to do so.
It represents a person's increasing value.
Not only does giving a raise communicate how much you value someone, it's also a representation of the person's increasing value to you.
As someone works with you for a period of time and begins to understand the way you do things, they save more time, do a better a job, and create more value for your business.
Giving a long-term team member a raise is natural, considering that they're creating more value for you than they did at the beginning.
It keeps up your team's motivation.
As humans, whenever we work really hard on something and achieve success, we like to reward ourselves by throwing a party or treating ourselves to something we wouldn't usually buy. Celebrating wins is important in acknowledging someone's hard work and giving them an opportunity to enjoy the fruits of their labor before diving back into the next project. What better way to celebrate a win than by giving that person a raise?
It's also a way to keep your team excited for the future. Everyone wants to feel like they're moving forward in life. Working for months or years at a time without advancing in your career can feel discouraging, and giving a raise, whether big or small, allows your team to continue to move forward and maintain their motivation to keep doing their best.
It sets you apart from your competitors.
The common understanding among freelancers is that it's difficult to raise prices with an existing client. Following that line of logic, if you want a raise, you should get a new client at a higher price and let the old client go. In companies, too, it can be difficult to negotiate a raise with your boss, and many people end up looking for new opportunities elsewhere.
If you commit to increasing your freelancers' and employees' rates, you'll stand out from other clients and companies in your industry. You'll be the good client that freelancers want to work for, and the good boss that earns the loyalty of their employees.
Don't lose your best talent to someone else because you failed to appreciate their hard work.
That said, there are times when you shouldn't give someone a raise.
Yes, giving a raise is extremely beneficial. But it should be given to the right person.
At the beginning of this article, I mentioned that some of the best people I've worked with never ask for a raise. These are often very people who deserve it the most.
If the person is creating value for your business, if they do what you ask (and sometimes more), if they prioritize your business' needs over their own, by all means, give them a raise.
But if a person working for you isn't improving or adding much value to your business, if they whine about pay or have a bad attitude when working with you, giving them a raise is just going to reinforce their current behavior.
Sometimes a person just needs a little bit of direction to help them realize the issue and improve their skills or work ethic. But if constructive criticism fails to make a difference, it may be time to let the person go.