How to Ask for a Pay Raise in this Economic Climate
Asking for a raise in salary was a daunting prospect for a lot of people even before the current recession. Most of my clients want to know if there is any chance to even approach the issue with their employers in these times and if yes, how?
Admittedly, if you are currently working in the City of London it might not be the best of times to ask for a pay raise. There are some exceptions to the rule reviewed later in this article. However, just because times seem to favour the employer’s position very strongly does not mean you cannot prepare yourself for when the day the doom and gloom changes into boost, growth and the hunt for the best workforce again.
Instead of money, ask for other benefits you would like to have, for example: support with travel and child care costs, training, more days off, a secondment, paid memberships, pension schemes, mentoring, flexible hours, coaching, and a career advancing title. Some companies now offer free bikes and bike parking spaces to interested employees, or the possibility to cook a fresh lunch at work. Think about what could keep you motivated.
Use potential offers by some co-operations and the government on free debt and money advice if you are in trouble.
Depending on how trusting and open your relationship with your line management or the HR department is, ask them for advice on when and how to approach the issue of increased income in the current climate.
If you hear a clear indication that you would deserve a pay rise, but it cannot be granted because there is currently a freeze, do not despair. Make sure you get the promise in writing so you can claim it as soon as the company starts hiring again.
When asking for a pay raise, it is vital to get the timing right. Consider the company’s situation: do not approach the issue before the main decisions are made or while your manager is under high pressure; wait until times are more predictable for them; also, take care if the necessary decision maker is a morning or evening person and respect this in your approach strategy. You should also make sure you know how the company’s reward structure and procedures operate and time your meeting accordingly.
Understand how your manager assesses your work. Don’t just look at the official key performance indicators (KPIs) but also consider getting a sponsor on board who can help point out your benefits to the relevant decision maker.
You should be realistic about the value you bring to the company (expertise, qualifications and business, as well as ‘soft’ skills, such as contacts). How critical is your role in the team/department/company? When was the last time you did a strengths, weaknesses, opportunities, and threats (SWOT) analysis for yourself?
Make a proper calculation of the benefits you receive from your employer and put a figure to it. Add this to your salary and then start comparing it with other offers and opportunities. For example: free training. Your increased knowledge or even a qualification will be worth £X in the outside market in the future. Also, include gym memberships and health insurance, something you can easily put a figure to. What about flexible working times? It is trickier to calculate this value but be honest with yourself. How much is it worth to you having this opportunity? How much money would you be happy to pay for job satisfaction, nice colleagues and the view from your desk? Add all these figures to the money you are currently paid and then compare the sum with the market value.
One thing you shouldn’t do in the negotiation is mention your private situation. Not many managers or HR departments will be sympathetic to arguments based on the fact that you have spent too much money during the past months, your partner is being made redundant or the rise of living costs. The only exception for this rule is the small, privately owned businesses, which are led in a very patriarchal/matriarchal style. These people do usually care enough about their employees to make your financial problems their own. However, this personal approach is not recommended with a global corporation because all they hear is that an employee is distracted from performing because of money problems. This approach can backfire badly, but if this is truly the case, some do offer debt counselling to employees so take advantage of this free support if you need it. It shows you are proactive in solving a problem.
Learn from poker players as to how to bluff and, more importantly, how to lose with dignity and professionally. Be prepared to have your request for a pay rise declined and ask what you need to do in order to get one in the future. Then listen, learn and adapt. Keep the sulking and the anger for the gym.
When in doubt about what your legal entitlements are, use the services of an employment lawyer to find out if you are legally entitled to more pay in case the company doesn’t stick to all the regulations. Be aware of all your legal rights. Equal pay for equal work is common sense and your legal entitlement.
If you want to negotiate for a pay raise you should use opportunities to prepare your manager. For example, when you are handed the work of leaving colleagues and expected to do the work of two or three employees, it is fair to hint that you will come back to the issue of recompense at another time and then concentrate on the job at hand.
Collect evidence of why you deserve a pay rise. How and when did you excel in the past months? See your manager as a client and you as the supplier of services. Why should your company be happy to pay more for your services? Think about what you will be willing to offer (and deliver) in exchange for a pay rise. What is the benefit for the company in awarding you the rise? You must tell them and make a business case. Also, have you considered enrolling in more courses to improve or update your skills?
Preparefor the meeting with somebody who knows the manager well. Use the support of mentors, coaches and friends to rehearse for the dialogue because time and money spend here will be gained back with a successful outcome later.
Check (and necessary adapt) your image, aptitude and attitude if appropriate for your current level and the one you are aiming for. Dress and groom to impress. Plus, watch your body language during the meeting, neither begging posture nor over confidence is helpful.
Remember, time is money. Make it short and sweet, with facts only, and be positive. Do not threaten to leave if you are not prepared to do so.
If you have to negotiate with a line manager who is not powerful enough to make the decision, help her/him to make your case to the relevant decision maker. How can your line manager sell you best to the significant people? The easier you make it for them, the more prepared and keen they will be to support you.
One of the easiest ways to get the necessary support and information is internal and external networking. Do not neglect this during good times and keep in touch to have these invaluable research sources and help when you need them. To state the obvious: networking is a two way street. People you have helped in the past will be delighted to do you a favour now. Don’t forget: in business you don’t get what you deserve, you get what you negotiate.