Tuesday, September 22, 2009

4 Strategies to Help You Get More Money This Year

Are you going to get a raise this year? If not, are you going to ask for one?

You can quit laughing now. I'm serious.

I realize times are tough, but I got to wondering as we watch the stock market recover, if some of those profits will translate into better pay for all that hard work we've done in the last year. It's an issue I explored for my latest Gannett column:

In an effort to help employers remain financially afloat, many employees have accepted furloughs, reduced hours and pay cuts in the last year. But as time goes on, the question remains how many employees will leave their current job in an effort to regain their lost wages – and how many of them will never get back to previous pay levels.

“There’s no question that as things get better in the economy you’re going to have people who are going to get nervous about their pay and jump ship to make more money,” says Warren Cinnick, a director with PricewaterhouseCoopers in Chicago. “But the reality is that it’s still an employer’s market. The average person has the lowest leverage in the job market right now than in the past 25 years.”

The Conference Board reported in its recent annual survey of salaries that the median salary increase for 2010 for all employee groups is expected to be 3 percent – the lowest since the group began forecasting salaries 25 years ago and down half a percent from the previous year. Even top brass will take a hit – their median salaries are expected to drop two full percentage points, from 3.5 percent to 2.50 percent, the report said.

For employees like Amy Lee, 27, the denial of a pay raise for the last two years, coupled with the increased work load because half her co-workers have been laid off, is partly what prompted her to begin looking for other opportunities.

As a university academic counselor in California, Lee says that even though she received a “stellar” performance evaluation, she was told by her boss there was no money for raises this year when she made the request for more compensation.

“That made me start looking around,” she says.

Another employer soon offered Lee a job, along with a 33 percent pay boost. When Lee told her boss, she was immediately offered an 11 percent raise if she’d stay. “To be honest, I wasn’t happy when they made that offer. When I had asked for a raise after getting that great performance evaluation, they immediately said, ‘no.’ They weren’t even going to try.”

The issue of pay is cropping up at all levels in organizations. Recently, General Motors Co. had to rescind white-collar pay cuts made last spring because it said its pay scales were no longer competitive and employees were leaving to work for other automakers and manufacturing companies. While the pay cuts initially saved the company money, unhappy and demoralized employees were leaving at a time when the company needed to retain key talent.

Cinnick says it will be the “pivotal” employees who will have some leverage in negotiating increased pay, although it will also depend on the industry. Those companies that are strong globally, for example, will be in a better position to reward workers and offer pay raises, he says.

“For employers who want to remain competitive, they may do extraordinary things to keep some workers,” Cinnick says. “I’m talking about the super sales people. The employees who give the ‘ah-ha!’ answers. They’re going to be the ones who can ask for more money from companies.”

Still, Cinnick cautions employees that the pay cuts in some industries may never recover to the levels they were before the recession hit. He says that asking for more money – from a current employer or a new one – will take some planning. He advises when negotiating for pay, you should:

  • Time it right. “Ask for more money when you’ve completed a successful project, or you’ve gotten some verbal recognition for your work,” he says. “Wait a couple of days, then go see the boss.”
  • Show your worth. “When you’ve had your job duties expanded, or gotten new ones, then you can talk about how you’d like to be compensated for them,” he says.
  • Keep records. “If you take a pay cut for the company, they usually send out an e-mail or some kind of notice. Keep a copy. Then, when you go to interview at another company, you can show that you took a pay cut and what your previous salary was,” he says. “You want to negotiate from your original salary.”
  • Stick with the facts. “Whenever you ask for money, always base it on some data. There’s tremendous information about salaries online. Make your estimate of salary based on what you’ll bring to the company. Make it a fact-based story. Compensation should not be an entitlement statement or a make-them-feel-guilty-statement.”
What other ways can you suggest to help someone get a pay raise?



David Benjamin said...

Great post.

Knowing your true worth is important in knowing when to ask for more money.

Have a backup plan in place for when you ask for more money from your employer, you instantly become a red flag as someone who may not be happy and is looking elsewhere.

Don't think your company won't start looking for your replacement. Bottom line- be willing to walk the walk.

Anita said...

That's a good wake-up call. Bosses often see it as disloyal when you ask for more money or say you could be earning more elsewhere. Always follow up any discussion about pay with a "I love my job and want to stay here" comment. And, whether you get the raise or not, make sure you thank the boss for listening to you.

ION Consultants said...

Great advice!

Thom Singer said...

#5 Have a side business. The best thing that ever happened to me the last time I experienced a lay off was that I had already begun building my own business as a professional speaker and consultant. I was making "real" extra money, which was great while I was employed. But the real pay off came when the pink slip arrived. I had enough of a base built that I was able to not look for a job and grow my own company.

Anita said...

Great suggestion. I'd say this is also helpful in getting a strong network and developing your personal brand.

the medical sales recruiter said...

Great topic. I have a few suggestions for how to raise your visibility at your organization that can help back up your request for a raise: http://www.phcconsulting.com/WordPress/2009/04/17/how-to-raise-your-profile-within-your-organization/

Dan McCarthy said...

Anita –
It’s always a good idea to negotiate for the best salary possible for a new job.
However, as a manager, I’m not too keen about the idea of my existing employees coming to me asking for a pay raise, no matter how well prepared they are. In most large companies, decisions to freeze or cut pay are made across the board, and there’s nothing we can do even if we wanted to. When those freezes are lifted, we’ll go back to administering raises on a yearly cycle based on performance and position market value.

Anita said...

Thanks for your perspective. I have a question:
Would you hold it against an employee if they came to you for a raise? Or would you see it as a sign they were just trying to manage their career?

Be interesting to hear your response!

Dan McCarthy said...

Thanks for asking.
I have to tell you, it just hasn’t happened to me that often. Maybe that’s because I’ve only worked for companies that have pretty consistent, fair pay programs. In tough years, everybody knows there won’t be much to go around, and in good years, we do everything we can do to take care of our best performers.
I guess I wouldn’t work for a company that screws their employees so badly they feel they have to ask to be paid for what they are really worth.
Companies that think they can take advantage of their employees during these tough times are going to get what they deserve.
So to answer your question… no, I probably wouldn’t hold it against an employee the first time. I’d first look into it and make sure they are being paid fairly. If no, I would take steps to fix it. If yes, I’d share the data with the employee so they at least had the facts.
However, if after doing that, they still weren’t satisfied, then yes, I’d get irritated.

Lori Davila said...

Thanks for this post! I believe whole heartedly in developing a plan to make yourself highly valuable by learning the pain points of your boss and others in your department and finding resources, tools, wisdom, ways to assist to alleviate those greatest challenges. You will become so valuable and known and the money will follow if you then incorporate some of your points. Thanks!

Anita said...

What a great way to put it: "pain points" !
Many very successful people get ahead and develop a reputation for being the "troubleshooter" for the boss or others at work. Great points!

Scot Herrick said...


As Dan noted, when companies provide pay raises once a year at the performance review, it does no one any good to ask for a raise early because there is nothing one can do about it. Asking only shows an ignorance of when raises are done in the company.

However, if raises are done with the performance review, the best way to influence a raise is to ensure you write your own self-review in an accurate, fact-filled way showing your results.

This gives your manager ammunition to go after the right raise for you with the rest of the management team. A manager prepared with facts and results will out maneuver ill-prepared managers every time.

I've had more than one person ask how to get promoted outside of the performance review cycle -- and that's a good one to ask. It gives you feedback on your current work and gives you time to go do the stuff to get into a position to be promoted.

Good article.

Anita said...

I think you make a good point about making sure you don't do something out of ignorance, which proves to the boss you're not tuned in enough to deserve a raise. By understanding the company goals and culture, your boss's needs and how you can tailor your performance to best meet those issues, you're setting yourself on a more successful path to more pay.