How to Ask for a Pay Raise During a Tough Economy
How do you ask for a pay raise when your company has put most raises on hold this year? Alternatively, your employer is offering a 2 percent pay raise across the board, but you believe that you have earned more. What do you do?
Whether your company is prudently managing resources or struggling with falling sales, the answer depends on economic circumstances and your perceived value to the firm. You can ask for a pay raise during tough economic times—you may even receive a raise—but your preparation for asking must be thorough and communicate your value.
Don’t even think about asking for a pay raise at your weekly one-on-one meeting with your manager. Especially when money is tight, preparation is essential. Don’t blow your six-month opportunity to ask for a raise.
What If They Are on Hold?
If pay raises are on hold, keep in mind that you risk looking like you’re not a team player when you ask for a raise. You could also receive an automatic turndown because a salary freeze gives your manager an excuse to avoid considering individual requests.
Your company may legitimately strive to treat employees equally, a short-sighted strategy if it costs the company its best employees, but it is a strategy some companies often adopt.
Especially if your company is in any kind of trouble or laying off employees, no matter your circumstances, you may want to wait a few months to ask for a pay raise. Your chances of success look up as your company’s prospects improve. But if your company is simply being prudent, pay raise opportunities may exist for the company’s best employees.
Steps to a Potential Pay Raise
The tried and true continues to work when you ask for a pay raise. Even in tough times, you start by researching your salary against what the market is paying people with your job and your responsibilities. If you are a stand-out contributor and you are underpaid for your market, you have a case for a pay raise.
If you have experienced any of these work events, asking for a pay raise is legitimate and expected. In fact, your company may offer you a pay raise when you accept the new position or responsibility.
- You were promoted to a higher-level position.
- You took on new and substantial responsibilities, which doesn't necessarily mean more work. In this time of layoffs and negative decisions about replacing staff, everyone is doing more work.
- The number of reporting employees that you supervise increased, and thus broadened your areas of responsibility.
- You took over the leadership of a project on which you had been a participant.
Without a qualifying work event, you may need these extra pay raise ideas for a difficult economic climate.
- Make a list of the goals you have accomplished for the company. Determine how their accomplishment has helped the company. Document your contributions. Make the contributions measurable and visible whenever possible.
If you are the ace developer of new business, a sales professional extraordinaire, the developer of a product that is outselling all competitors, or the employee who saved the company $100,000 in costs, you may qualify for a pay raise, even in tough times. Your company doesn’t want to destroy your motivation or lose you to a competitor, but you need to ask for a pay raise.
- Ask for additional responsibilities and document your success in achieving them. It is a longer-term strategy because you must first demonstrate success. But, depending on the value of your increased contribution, your company may decide to give you a pay raise.
- Take a serious look at the way you approach work and your communication style. Are you achieving gains for the company that are unmeasured and uncommunicated? Don't assume people notice. You may need to raise your visibility at work and the visibility of your contributions, not obnoxiously, but to help your manager comfortably go to bat for your pay raise.
How to Ask for an Increase—Even in Tough Times
You'll want a strategy for asking for that raise—a good policy at any time, but particularly now.
- Set up a meeting with your immediate supervisor to discuss your compensation. You will not want to ambush this person. If the supervisor is unprepared to discuss a pay raise with you, nothing will happen at the meeting. Your boss will want to do his research with the Human Resources staff and his own industry sources.
- You may want to rehearse your pitch with a good friend or family member. Come to the meeting with a one-page list of bullet points that you believe will pinpoint your value. Make sure you are prepared to promote your value with examples and numbers.
- Come to the meeting prepared to demonstrate the value you add to the company. Nothing else matters, especially when pay raises are scarce. Share your documentation and your contributions. The tone of the meeting should be conversational, not confrontational.
- Never make the mistake of threatening your boss with the possibility that you will leave the company if you don’t receive a pay raise. Under those circumstances, the pay raise will only happen if your company is desperate. But your boss will never forgive you. Nor will your company plan for your presence in their future. Your contribution is not to be trusted long term. You will have burned your bridges.
- At the same time, recognize the value that you add, and if your current company cannot reward you for that value, find a company that will.
You can ask for a pay raise in a tough economy. If you decide to ask, be prepared to support the value that you add to the company. Nothing else matters when economic times are tough.