Identify Your Value
How to Ask an Employer for a Raise in a Difficult EconomyRegardless of economic conditions, rewarding good employees is an investment companies have to maintain. Recession or not, employers need to consider the consequences if their best employees leave. And, let’s be honest, if you’ve made it this far, you’re probably on the list of good employees.
Although the job market is often tough to crack when you’re unemployed, those who do have jobs may find themselves in an interesting position. That’s because some businesses prefer to look only at people who are already employed. Although that sounds strange, let’s think about it. In a tough economy, most companies make their first cuts in areas that aren’t vital to their operations. The employees who survive are likely to have skills that are essential to the business.
So you still have a job, and you think you have a desirable skill set. How do you ask for a raise when the economy is struggling? The first thing to do is spend some time evaluating your current employer’s position. Some organizations have found it difficult to provide raises. They’re fortunate to be meeting their current payroll, and are just hoping to survive until things turn around. If this is your company’s situation, you’ll have to wait for your organization’s fortunes to improve, but, while you wait, work on broadening or developing the skills you have. You want to make your boss’s decision an easy one when the time comes.
You may learn that your company’s position is not all that bad. Some businesses have been building their financial reserves. As we emerge from the downturn, these companies are looking to expand their operations by adding key personnel. What better way to strengthen your company’s position than by luring vital employees away from your competitors? This atmosphere can create a unique bargaining opportunity for employees who are aware of the value they represent.
Before you ask for a raise, you also have to determine if your salary warrants an increase. You can get some perspective on your current pay by visiting Salary.com or any of the government’s compensation Web sites. If you’re already paid above your market pay rate, negotiating a raise can be difficult, though not impossible. There are a number of intangibles that you may bring to the table, often based on your years of experience. It is also important to remember that a successful negotiation is always based on your merit and not on why you need additional money. While your employer may care about you, providing additional salary to fund your chosen lifestyle is not their responsibility.
If your research indicates that you are undervalued, you then need to justify why you deserve a raise. One of the best ways to identify your value is to track your accomplishments. Keep a notebook, or a computer file, which summarizes your accomplishments, the date you achieved them, and a summary of the work completed, plus what you’ve learned. In our knowledge-based economy, you want to draw attention to the additional skills you’ve acquired since you were first hired. This would include any certifications, continuing education, industry or community awards, or any other activities that show you’ve grown as an employee. You’ll also want to document any cost savings you’ve achieved, how you’ve helped improve productivity, any important projects you’ve worked on, and other ways in which you’ve contributed more than your job required.
There is probably no best time to ask for a raise when the economy isn’t doing well. However, if you’re confident you have a case to make, there are a few things you should consider before approaching your employer. First, be cognizant of their time. If your boss’ schedule is hectic on a particular time of day, be sure to schedule an appointment outside of that time frame. Furthermore, you want to plan to ask for a raise before the annual budget is complete. After the budget is set, it may be difficult for your employer to allocate any additional funding for increased compensation. Finally, be mindful of the overall work environment. If things are particularly crazy, and people are juggling multiple tasks or racing to meet deadlines, wait until things die down.
You should also give some thought to what you’ll do if your employer declines your request, or agrees to a raise that isn’t exactly what you had in mind. Discuss your employer’s reasons, and ask what you can do over the next few months to improve your chances for increased compensation in the future. Don’t back them into a corner. Your attitude should clearly be, “how do I become a more valuable employee?” That should make their decision easier next time around.
Thomas J. Fox is the community outreach director at Cambridge Credit Counseling in Agawam. He is an AFCPE-accredited credit counselor, a CFC-certified educator in personal finance, and an NCHEC-certified housing counselor. He also hosts Your Money 2.0 (YouTube) and Money America (91.9 WAIC); (413) 241-2362; [email protected]