You know that person on your team. The one who shows up early, picks up the slack, and hasn’t complained once in six months. You know they’re underpaid. You’ve thought about it at least three times this month.
And you’ve done exactly nothing about it.
Maybe you’re not sure how to bring it up with your boss. Maybe you’re afraid of setting a precedent. Maybe you’re telling yourself you’ll deal with it “next quarter.” But here’s the math you’re ignoring:
A 3.5% raise on a $65,000 salary costs $2,275 per year. Replacing that same employee when they quit costs $32,500 to $130,000 — that’s 50-200% of their annual salary, according to SHRM.
That’s not 6x. That’s 14x. And you’re gambling with it every week you stay quiet.
The conversation gap that’s costing you everything
Here’s what makes this painful: most managers who lose good people know it’s coming. They just don’t act.
Gallup found that 42% of employees who voluntarily quit say their departure was preventable. Even more telling: 45% said no manager had a single conversation with them about their job satisfaction in the three months before they left. Not one.
Think about that. Almost half of the people who walk out the door would tell you, right now, that they’d stay if someone just talked to them. And most of the time, “talking to them” means having the compensation conversation you’ve been avoiding.
Pew Research Center data puts it bluntly: 63% of workers who quit cite low pay as a reason. It ties with “no advancement opportunities” as the #1 driver.
Your best employee isn’t going to send you a warning email. They’re going to update their LinkedIn, take a call from a recruiter, and hand you a resignation letter. The average window from “I feel underpaid” to actively job-searching is about six months, according to Payscale. After that, it’s too late.
Why you’re stalling (and why it’s not about the money)
Let’s be honest about what’s actually going on. The raise amount isn’t the hard part. The conversation is.
You don’t know how to bring it up with your boss. You’ve never asked for budget before. You’re not sure what the process is, who approves it, or whether you even have the authority. So you wait for someone to tell you — and nobody does.
You’re afraid of setting a precedent. “If I give this person a raise, everyone will want one.” Maybe. But if your best person leaves and you’re scrambling to backfill, everyone will notice that too — and they’ll start wondering if they should leave.
You think your boss will see it as a failure. Asking for a raise for your employee feels like admitting you didn’t negotiate their package well enough the first time. Or that you can’t retain people through leadership alone. Your boss doesn’t know you’re struggling with this — and they’d rather you told them now than handed them a resignation to deal with later.
You’re waiting for the “right time.” Performance review season. Budget cycle. After the big project. There is no right time. There is only “before they quit” and “after they quit.”
What your employee is actually thinking
Here’s the part that should scare you: your employee probably thinks you already know.
Payscale’s Fair Pay Impact Report found that 68% of employees believe they’re underpaid — even when many are actually at or above market rate. Among those paid at market, 63% still think they’re below it. Perception is everything.
And employees who perceive they’re underpaid are 2x as likely to leave.
So right now, your best performer is sitting across from you in your 1-on-1s, thinking: “They know I’m carrying this team. They know what I’m worth. And they’re choosing not to do anything about it.”
They’re not going to ask you for a raise. They’re going to ask a recruiter for a new job. If you’re not sure whether someone on your team is already there mentally, this quiz might tell you something you need to hear.
The 3-Number Pitch: how to get your boss to say yes
You don’t walk into your boss’s office and say “I think Sarah deserves more money.” That’s an opinion. Opinions get politely tabled.
You walk in with three numbers. This is what I call the 3-Number Pitch. (If you want to pre-compute every number before the conversation, the free Salary Raise Calculator gives you real wage change after inflation, loaded employer cost, and the break-even probability that makes the raise cheaper than replacing the employee. Two minutes, all three numbers, ready to paste into the pitch below.)
Number 1: Market rate
What does this role pay at other companies? Pull data from Glassdoor, Payscale, Levels.fyi, or your company’s own compensation benchmarks. You’re not asking for a favor — you’re showing a gap.
“Based on Glassdoor and Payscale data, the market rate for a [role] with [X years] experience in [city] is $72,000-$78,000. Sarah is currently at $65,000 — about 10% below market midpoint.”
Number 2: Replacement cost
This is where you show the business case. Use real numbers. If you want to make this visceral, run the numbers through our Employee Turnover Cost Calculator and bring the output to the meeting.
“If Sarah leaves, our estimated replacement cost is $45,000 — that’s the recruiter fees, my time interviewing, the 3-month ramp-up of a new hire, and the productivity gap while the seat is empty. I ran the numbers.”
Number 3: The ask
Specific. Concrete. Not a range.
“I’m requesting a $5,000 annual increase — from $65,000 to $70,000. That’s a 7.7% adjustment, which still lands below market midpoint. The cost of the raise is $5,000/year. The cost of losing her is $45,000 minimum.”
That’s it. Three numbers. Market rate, replacement cost, the ask. Your boss deals in numbers. Give them numbers.
If you need help structuring the broader conversation about what you need from your boss, our managing up guide covers the full framework.
Scripts for the conversation with your employee
The boss conversation is the harder one. The employee conversation is the one people mess up.
When you got the raise approved:
Don’t just announce it in passing. Make it a moment. They need to feel seen.
“I want you to know that I went to bat for a salary adjustment for you, and it’s been approved. Your new salary is $70,000, effective next pay period. You’ve been doing exceptional work on [specific project], and I wanted to make sure your compensation reflects that. I don’t want you to wonder whether I notice — I do.”
When you got less than you asked for:
“I pushed for a larger adjustment, and I want to be transparent — I got a $3,000 increase approved, not the $5,000 I asked for. Your new salary is $68,000. I know that’s not where you should be yet, and I’m going to revisit this in [Q3/next review cycle]. Here’s what I need you to know: I see your value, I’m fighting for it, and this isn’t the end of the conversation.”
When you couldn’t get it approved — yet:
“I want to be honest with you. I’ve been working on getting a salary adjustment for you. Right now, the budget isn’t there for this quarter. But I’ve made the case, my boss knows the number, and it’s in the queue for [timeline]. In the meantime, I want to talk about what else I can do — whether that’s a project you’ve been wanting, professional development budget, or flexibility. What matters most to you right now?”
The worst thing you can do is say nothing. Silence isn’t neutral. Silence communicates that you don’t care — even when you do.
When the answer is no
Sometimes the budget genuinely isn’t there. That’s real. Here’s what to do:
Don’t pretend it’s fine. Acknowledge the gap. “I know you’re below market, and I’m not going to pretend that’s okay. Here’s my plan to fix it.”
Offer what you can. Non-monetary options that actually matter:
- A better title (which helps their next negotiation, even if it’s not with you)
- Conference or training budget
- Remote work flexibility
- A high-visibility project that builds their resume
- A formal development plan with a timeline to a raise
Set a date. “I’m revisiting this in September. I’m going to come back with the same business case. If the answer is still no, I’ll tell you honestly.”
Document everything. If your company does have budget later, you want a paper trail showing you’ve been advocating. This isn’t just good management — it’s managing up effectively.
If you need scripts for this kind of hard conversation, the Difficult Conversations Scripts Pack has 10 ready-to-use scripts including compensation and retention scenarios.
The 5 mistakes managers make with raises
Waiting for the employee to ask. By the time they ask, they’ve already decided that you weren’t going to offer. You’ve lost the trust advantage. The best raises are the ones employees didn’t have to request.
Making it about performance review season. If someone deserves a raise in March, waiting until December doesn’t show fiscal responsibility. It shows you don’t value their time. Off-cycle adjustments are a power move that sends a clear message: I noticed, and I didn’t wait.
Giving everyone the same percentage. A 3% raise for your top performer and a 3% raise for your coaster tells your best person that excellence doesn’t matter. Differentiate. That’s your job.
Not telling the employee you tried. Even if you fail to get budget approved, the fact that you fought for them matters enormously. People don’t just leave over money. They leave because they feel invisible.
Treating it as a one-time event. Compensation is a conversation, not a decision. Check market rates annually. Proactively flag gaps. Build it into your goal-setting process as a management responsibility, not an HR task.
What changes when you have this conversation
The math is clear. A 3.5% raise costs $2,275. Replacing someone costs $32,500+. The raise is cheaper by every measure.
But here’s what the math doesn’t capture: when you fight for someone’s pay, you’re telling them something that no amount of “good job” ever will. You’re telling them they matter enough to argue about. That changes everything — their engagement, their loyalty, their willingness to go the extra mile when things get hard.
Gallup found that 52% of departing employees said their manager could have done something to prevent them from leaving. In most cases, “something” was just… having the conversation.
You already know who on your team deserves more. You already know you’ve been putting it off. The only question is whether you’ll do the math before they do.
The full guide to managing the relationship with your boss — not just about money — is here: How to Manage Up as a New Manager.
Worried you might be about to lose your best person? Take the quiz: Am I About to Lose My Best Employee? — 15 questions, 2 minutes, free.
Need more tools for navigating the relationship with your boss? The Managing Up Toolkit gives you 12 tools in one PDF — including upward communication templates, boss alignment scripts, and stakeholder mapping worksheets. $29, instant download.