You Need A Raise! But Can You Get It During A Downturn?

The economy is showing no signs of a rebound. Corporate costs are rising. Layoff announcements have increased significantly and the heaviest job-cutting period of the year is just beginning. It is probably not the best time to ask for a salary increase, right?


Pay raises may be harder to come by in the current business environment, but those who can prove that they are an integral part of an organization’s ability to survive the downturn and thrive during the next expansion have nothing to lose by asking,” he said.

For most American workers, pay raises have averaged about 3.8 percent in 2008, virtually unchanged from the 3.7 percent salary increase averaged in 2007, according to new survey data from global consulting firm Mercer LLC. The rate is expected to remain the same in 2009.
These marginal increases do little to combat inflation, which some experts expect to approach four percent in 2009, or rising energy and food prices which have escalated 28 percent and 8.7 percent respectively over last year’s cost. In fact, overall consumer prices have climbed 5.5 percent from July 2007 to July 2008, the quickest rate of increase since May 1991, according to the Bureau of Labor Statistics.

Americans’ salaries are not keeping pace with inflation, which is tantamount to a salary decrease as far as their year-to-year spending power is concerned. Unfortunately, employers are suffering from rising costs as well, and while more are starting to pass along these costs to consumers in the form of higher prices, it has not been enough to offset those increased costs. As a result, jobs are cut and wages frozen.

But, for employees hoping for an above average raise, simply needing the increase in pay will not cut it. Workers will have to prove their worth, as organizations are reserving the most significant boosts in compensation for their top performers.

The highest performing employees (14 percent of the workforce) can expect to see a 5.6 percent base pay increase in 2009, according to Mercer. Meanwhile, a separate survey by human resource consultant Hewitt Associates found that one-time performance-based pay grew by 10.8 percent in 2008 and is expected to climb another 10.6 percent in 2009.

It is not surprising that companies are rewarding their top performing employees with above average pay raises. Organizations turn to these employees to help them get through this slow economic time and they want to ensure they retain these workers for the long-term.

With new evidence suggesting that salary increases will remain stagnant for the rest of 2008 and into 2009, a well-planned raise negotiation may be the most effective plan for workers.

You have to enter the meeting with a well-thought-out justification for an increase in salary. It should be based solely on your performance, whether it is exceeding established goals, creating and implementing money-saving strategies, or bringing in new business. Support your points with numbers and specific examples and be prepared to answer questions or objections.
Even if you present a great case for the salary increase, some companies simply do not have the extra money to reward their best performers with higher salaries. You might be able to negotiate some other benefit or at least put yourself in a good position for a salary increase when conditions improve.


Do your homework. Finding out how your company is faring through the economic slump is a critical piece of information to know before you even broach the subject of a raise with your boss. If your company is doing well, you can use this information to determine how much of an increase in pay to ask for. However, if your company is struggling to turn a profit, showing you understand the organization’s precarious financial situation can help eliminate your boss’ immediate resistance to you asking for a raise and open the door for compromise.

Prepare to make your case. Arm yourself with facts that support your request for increased compensation. Gather emails from superiors praising your performance and make note of your achievements since your last raise. Documenting your contributions to an organization is more important than ever in an unstable economy. Employers need to see exactly what you have accomplished to warrant a salary increase. Maybe you’ve taken on extra responsibilities after your company laid off workers or you found ways to cut wasteful spending. These kinds of achievements showcase your worth to the company, especially in today’s tight economy, and help support your claim that you should be compensated accordingly.

Research your salary. You should also research and find out what other professionals in your field and location are making. If your salary is below average, this data is a great bargaining chip in getting a bump in payment. If it is on target, it gives you a starting point from which to adjust according to your value as an employee.

If at first refused, try again. Listen to your boss’ explanation for refusing to grant you a raise. If it is budgetary, ask for non-monetary things like more vacation days or the opportunity for company-paid training. If it is based on performance, work with your boss to set goals and a date to review the topic again.


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