As a Product Manager, there is no doubt you add value to your company but when it comes time to discuss a raise, the question of exactly how much you contribute is glaringly relevant. Calculating your financial contributions and impact, highlighting the right KPIs to determine your value, and tracking your overall impact are all important strategies to master before approaching your higher-ups with a compensation conversation. There is no doubt you deserve the money but first, you have to prove it. Which brings us to the topic of today’s post: How to determine your value to a company.
Calculating Your Financial Contributions and Impact On Your Current Company
Determining your financial contributions to a company can be a bit tricky. Still, it is essential to know that number when going into a salary negotiation conversation.
The best way to start these calculations is by tracking everything you do for your company. Every single day, for two to three weeks, keep a record of the tasks that you accomplish. Every task you work on from the time you enter the office to the time you leave should be documented. You’ll also want to include any additional courses or training you are taking on.
At the end of your two to three weeks of task tracking, you should have a pretty extensive list of your contributions to the company. Next, organize this list into three categories:
- made money
- saved money
- saved time
For each task ask yourself, “did this task directly or indirectly make the company money, save the company money, or save the company time?”
Once your list is organized, evaluate your efforts. Under what category are you spending most of your time? Ultimately, you will need to break all these tasks down to a dollar amount. For example, if your job is to keep a certain number of recurring customers, calculate how much those customers are worth to the company.
The next thing to evaluate is your current earnings. You want to look at your salary as well as any bonuses you are expecting this year. Then factor in any stock you have in the company. Together, this gives you a baseline number to start negotiating. Now you know exactly how your contributions are impacting the company and you can compare your compensation to those contributions.
What KPIs to Identify in Your Negotiation
The easiest and most attractive KPIs to identify are the revenue-generating KPIs. If you are making the company money, it is clearly in their best interest to keep you at the company as long as possible. Your management team should be more likely to discuss a raise that will keep you from searching for a new Product Manager position elsewhere.
With this in mind, don’t start the conversation with how much time and effort you are putting in. Instead, start off the conversation by highlighting these KPIs: this will translate better to high-level executives. They need to see the numbers to know if you are worth more money.
Cost-saving KPIs are the second-best option to highlight. The third KPI to determine your value to the company are those that improve efficiency (save time). Ultimately, to engage your higher-ups in a conversation about a raise, you will need to track and highlight KPIs that have a significant impact on the company revenue.
How to Track the Impact You Have Made for Future Job Searches
If the negotiations for a raise at your current company are not going your way, you may want to start searching for a new Product Manager position at another company. Tracking the impact you have had at your current company and taking those data points to future employers will help you land your next Product Manager position. Find a tracking system that works best for you, whether it is a spreadsheet, running document, or simply pen and paper. Perhaps you prefer to use software like Asana or Trello. Find what works best for you.
Whether you are actively looking for a new job or not, it is always good to keep track of your work and how it impacts the company so when the time comes to update your Product Manager resume, you have a big list of experience and skills to pull from. This list will also be helpful for preparing for your Product Manager interview.
Know Your Value
If your company is invested in you, they should be open to the conversation about giving you a raise. If it doesn’t seem like they are even open to entertaining this conversation, it is time for you to look for a new Product Manager position that will compensate you accordingly.
When the time comes to get back to your job hunt, schedule a free call with a Product Gym career coach. Our team can help you position your background, prep for interviews and case studies, and negotiate for better job offers. We’d love to answer any questions you may still have.