The Budget Close

I read a number in August that's been bugging me ever since.

In July, Mercer asked U.S. employers where their 2027 salary budgets stood. 87 percent said preliminary. Only 5 percent had final approval. Run the same survey a year earlier, and by October about 60 percent of companies had already presented their budgets to leadership or gotten them signed off.

So somewhere between the Fourth of July and Thanksgiving, the pool of money for next year's raises goes from a rough draft to a locked number. Then managers spend the winter slicing up a pie that was baked without them.

And when do most people ask for more money? At their annual review. In February. After the budget is set, the calibration meetings are done, and their manager has already been told what the number is.

That's not a negotiation. That's a notification.

This week's Playbook is about moving your ask to the part of the calendar where it can actually change the outcome. Which, for most companies, is right now.

Let's get the market out of the way, because you need to know what "normal" is before you can ask for better than normal.

The big comp surveys landed this summer and they all point to the same neighborhood:

Call it 3.5 percent, give or take. That's the pool.

Now the uncomfortable part. Mercer's data shows 2026 raises actually came in a bit below what companies said they'd give: 3.1 percent merit and 3.4 percent total, against a projection of 3.2 and 3.5. The plan was optimistic. The checks were a little lighter.

And inflation hasn't cooperated. August CPI came in at 3.4 percent year over year, and the September number drops this morning at 8:30 Eastern. Average hourly earnings in the September jobs report were up 3.0 percent from a year earlier. ADP's pay data has job stayers' base pay up 3.0 percent too.

Do that math and the typical person who stays put and takes the standard raise is running in place. Maybe slightly backward.

Meanwhile, ADP has job changers' base pay up 4.8 percent. The Atlanta Fed's wage tracker has switchers at 4.7 percent versus 3.4 percent for stayers. The market still pays a premium for leaving. Your goal is to get some of that premium without having to leave.

That 3.5 percent isn't handed out evenly. It never was, and it's getting less even.

Payscale's 2027 survey made a point of this: fewer companies are planning flat, peanut butter raises where everyone gets the same percentage. More of them are steering money toward the people they're most worried about losing. The Conference Board splits budgets into merit plus a separate "other" bucket for promotions, equity fixes, market adjustments, and retention, with a median around half a percent.

And promotions are getting scarcer. Mercer says employers expect to promote 8.4 percent of their workforce in 2027, down from 8.6 percent this year and 9.9 percent in 2025. A one-level promotion typically comes with a raise around 8.5 percent.

So there are really three different pots your money can come from:

The merit pot. The 3.2 to 3.5 percent everyone talks about. Your manager gets an allocation and divides it up. If the average is 3.5, somebody's getting 5 and somebody's getting 2.

The promotion pot. Separate money, smaller headcount, bigger checks. Usually decided in calibration meetings where managers have to defend each name.

The adjustment pot. Market adjustments, equity corrections, retention money. This is the one most people don't know exists. It's how you fix being underpaid without waiting for a promotion.

Your ask has to be aimed at a specific pot. "I'd like a raise" goes to merit. "I'm 12 percent below market for this role and here's the data" goes to adjustments. "I've been doing the next-level job for nine months" goes to promotion.

Six moves. The first three you can do this week without talking to anyone.

Every company's comp cycle has the same bones. Budget gets proposed. Budget gets approved. Managers get allocations. Calibration meetings happen, where managers sit in a room and argue about ratings and who gets what. Then letters go out.

Pave's data says a full merit cycle runs about 9 to 12 weeks from ratings to communication. If your raises take effect in January, that cycle is likely running right now. If they take effect in April, budgets are getting locked in Q4 and calibration happens around January.

You don't need a spy. You need one question for your manager or HR: "When does comp planning for next year happen, and when do managers submit their recommendations?" It's a totally normal question. Nobody will blink.

Write down two dates. The day your manager submits recommendations, and the day calibration happens. Your entire case needs to be in your manager's hands at least two weeks before the first one.

Your manager is going to walk into a calibration meeting and have about 90 seconds to argue for you. Your job is to make those 90 seconds easy.

Most people show up with feelings. "I've worked really hard." "I took on a lot this year." Those aren't arguments. They're adjectives.

Build a one-page file with four sections:

Results with numbers. Revenue influenced, costs cut, hours saved, deals closed, projects shipped, error rates dropped. If you can't put a number on it, put a before and after on it.

Scope growth. What were you hired to do, and what are you actually doing? Direct reports added, budgets owned, systems you now run.

Proof from other people. Client emails, Slack shoutouts, comments from a skip-level. Social proof works in calibration rooms just like it works on sales pages.

What's next. The one or two things you'll own in 2027. Managers fund the future, not the past.

A shortcut most people miss: if you're on a lot of client or project calls you already record with Fathom, search your call summaries for the moments clients thanked you, approved something, or expanded scope. That's evidence you've already collected and forgot you had. Then drop your raw notes into Galaxy.ai and have it tighten everything into one page your manager can forward without editing. Read it back and make it sound like you, because a document that sounds like a robot wrote it won't help anybody.

You can't ask for "market" if you don't know what market is.

The best free data source most people ignore: pay transparency laws. California, Colorado, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, Vermont, Washington, and D.C. all require pay ranges in job postings. Even if you don't live in one of those places, big employers often post national ranges to stay compliant.

Pull 10 to 15 postings for your title and level at companies you'd plausibly work for. Write down the range. Find the midpoint. That's your market estimate, and it beats any salary calculator because it's what companies are actually offering this quarter.

Then calculate your real raise. Take the raise you're expecting, subtract inflation, and look at what's left. If your company gives you 3.5 percent and prices are up 3.4 percent, your real raise is basically a rounding error.

If you're more than 10 percent below the midpoint of your market range, you have an adjustment case. That's a different conversation than a merit conversation, and it's often easier to win.

Now match the ask to the pot.

Then have a Plan B ready, because the budget really might be tight. Mercer found 64 percent of employers plan to give off-cycle raises in 2027. That's a door. So is non-cash value.

The non-cash list worth knowing:

If you only steal one idea from this issue, steal this one. Don't make your manager decide in the meeting. Make your ask, then give them the tools to fight for you in the room you're not in.

A script I like:

"I know comp planning for next year is coming up, and I wanted to get you what you'd need before recommendations go in. Here's a one-page summary of what I delivered this year and what I'm taking on next year. Based on what I'm seeing in the market for this role, I think I'm below the midpoint, and I'd like to be considered for a market adjustment. What would you need from me to make that case?"

Then stop talking.

That last question flips the dynamic. You're not demanding. You're recruiting your manager as your advocate and asking them to tell you what ammunition they need. Most managers want to get raises for good people. They just don't want to do your homework for you.

Follow up the same day with a short email that attaches the one-pager. Now there's a paper trail, and your manager has something to forward up the chain.

Before you leave, ask one more question: "When will I know?" Put that date on your calendar.

If the answer comes back as "the budget's already set," don't argue. Ask for the specific criteria and date for the next review, and get it in writing. Then you're not waiting another year in silence. You're on a clock.

The reason most people show up with adjectives is they try to remember a year of work in one weekend. You don't remember. Nobody does.

So automate the receipts.

I keep a "wins" label in my inbox and a channel I post to in Slack. A Make.com scenario watches both. Anything I tag, a client thank-you, a metric that moved, a project that shipped, gets logged to a Notion database with the date, a one-line summary, and a link back to the source. Once a month, the scenario sends me a digest of the last 30 days.

When comp season comes around, I'm not reconstructing a year from memory. I'm editing a list that already exists. Total build time was about an hour, and it's the highest-return hour I spend all year.

The other piece is relationships. Your manager isn't the only person in calibration. A skip-level who knows your name and your work is worth a lot in that room. I track those people in Clay, with a reminder to check in every six weeks or so with something useful, not a "just checking in." When your name comes up, you want more than one person at the table nodding.

Sometimes they will. Budgets are real. Some companies are tight going into 2027, and the September jobs report showed just 29,000 new jobs with unemployment at 4.2 percent. Nobody's handing out money because you asked nicely.

But "no" in October is different from "no" in February. An October no comes with time. Time to get the criteria, hit them, and come back before the next cycle. Time to quietly test the market and see whether the switcher premium is real for someone with your skills.

And an October no tells you something important. If you build the file, price yourself honestly, make a clear ask, and a company still can't find a way to pay you market, you've just learned something useful about where your next five years should be spent.

Raises aren't rewards. They're allocations. Somebody is deciding where a fixed pool of money goes, and they're deciding it based on whatever information is sitting in front of them when they decide.

If your case isn't in front of them, the default wins. And the default is average.

You can't control the size of the budget. You can control whether your name shows up in the meeting with a number next to it and a one-page reason why.

Get it there before the spreadsheet locks.

Want the whole playbook ready to run?

I built The Budget Close Kit so you can do this in one evening. It includes the comp calendar question list (what to ask, who to ask, and what each answer means), a one-page case template with examples for sales, ops, engineering, and creative roles, a market pricing worksheet for logging posted pay ranges and calculating your midpoint, the real-raise calculator, the full pre-wire script plus the follow-up email, a Plan B menu of non-cash asks, and the Make.com wins log blueprint so next year's file builds itself.

Reply to this email with the word RAISE and I'll send it over.

See you Friday.

Alex Rivera, Wealth Architect at Wealth Grid