Dare you ask for a raise now?
Believe it or not, two-thirds of U.S. employers plan to give pay hikes before the year is over, according to a new survey. Here's how to boost your chances of getting one.
NEW YORK (Fortune) -- Dear Annie: I know this probably sounds nutty, with so many companies cutting pay or freezing pay in order to avoid layoffs (or, further layoffs), but I'm thinking of asking for a raise. First of all, my employer has not cut or frozen anyone's pay -- at least not to my knowledge. However, we have had layoffs here, so I'm now doing the work three people used to do.
But the main reason I want to bring up money with my boss is that I was hired exactly one year ago at the low end of the salary scale for my position (production-line supervisor), and was told at that time that my pay would be reviewed - with an eye toward increasing it to at least the middle of the range - in six months. Then the recession hit, and no more was said about it. But I think I should ask, especially since my performance has been pretty great. I've introduced new efficiencies, cut costs, increased productivity, etc. Any advice on how to approach this? -Marty
Dear Marty: It takes chutzpah to ask for a raise in this economic climate, but it's not quite as crazy as it sounds. It seems that a little over two-thirds (67%) of U.S. employers are planning pay hikes for at least some of their employees before the end of this year, according to a new survey of 850 companies by compensation consultants Mercer.
Interestingly, however, the extra moolah won't be doled out evenly across all job categories. Only 56% of executives will get pay hikes, versus 69% of professionals (a group that includes, for example, in-house attorneys), and 73% of those in "trades, production, and service" jobs (that would include you). Positions in manufacturing, engineering, and information technology are most likely to see pay increases, Mercer's research found, while marketing, sales, and finance jobs earn stagnant or even declining wages. Overall, salary budgets in 2009 will rise by about 3.2%, roughly the average pay hike that prevailed before the recession started.
Why the sudden loosening of the pursestrings? "Companies realize that they need to be poised for a turnaround," says Steve Gross, global leader of Mercer's compensation consulting practice. "Continuing cost-cutting measures like salary freezes may put them at a disadvantage once the economy recovers."
The fact that your job performance has been, as you put it, "pretty great" is crucial to your argument in favor of more money. Tim Schoonover, CEO of leadership-development and coaching firm OI Partners, has noticed lately that more companies are focusing attention on how to keep their best performers happy.
"Top talent will be needed more than ever once the economy picks up again," he says. "And those people have to feel the love now, because now is when employees who believe they are undervalued make the decision to leave as soon as more opportunities open up. By the time the recovery actually arrives, it will be too late to hold on to them. Their decision to go elsewhere will already have been made."
With that in mind, here are five ways to maximize your chances of getting a raise:
1. Document your achievements over the past year. Don't assume your boss already knows about the efficiencies you've introduced and how much they've boosted productivity. Prepare your case and back it up with hard facts and figures.
To make sure you're properly valued, it's essential to "have a very clear idea of higher-ups' expectations, and then show exactly how those expectations have been met," Schoonover says. Clear, quantified evidence of your wonderfulness, he adds, will make it easier for your boss to justify a higher salary to anyone else in the company who has to approve it.
2. Empathize with the company's point of view. "This doesn't have to be an adversarial conversation. In fact, it shouldn't be," says Schoonover. "Make sure your boss knows that you understand budgets are tight right now, and that you want to be part of the team and keep helping your employer meet its goals." In other words, it isn't all about you.
3. Be politely assertive. You were all but promised a raise six months ago, so it's perfectly valid to broach the subject. But if your boss replies, "Gee, I'm sorry, we just don't have the money," don't just slink away. Instead, Schoonover recommends you politely press for another review, asking: "When can we revisit the subject? Maybe in three months? Six months? What would be a reasonable time frame?" Your boss may have to check with someone and get back to you, Schoonover says, but you'll at least have made the point that you're not just going to forget about it.
4. Stay open to the idea of other forms of compensation. Many employers are trying to keep base salaries flat, Schoonover observes, but a performance bonus may still be available.
"You could look at this discussion as a chance to set goals with your boss, and agree on a bonus for reaching them," he says. "It's one way he can give you more money without adding to fixed costs. Or you might ask for more paid vacation time instead of a raise, if that appeals to you, at least until a raise is forthcoming." If there's anything else you've been hankering after, especially if it's cheap (a reserved parking space, maybe?), now is the time to ask.
5. Keep in mind that, as they say in Brooklyn, "You don't ask, you don't get." As long as you do it in a non-confrontational way, asking for a raise can't hurt. The worst that can happen is your boss says no, so don't hesitate to speak up. And who knows, you may be pleasantly surprised.
Readers, what do you say? Has your company cut or frozen pay in the past few months? Have you asked for a raise lately? Did you get it? If so, what do you think helped you the most in persuading your boss you're worth more? Did asking help or hurt your relationship with higher-ups? If you're in a position to give raises, how do you decide who gets one? Post your thoughts on the Ask Annie blog.