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Asking for a raise during a recession can give good reason for your boss to think you’re totally out of touch with what’s happening in the global economy, or maybe they’ll think you’re just insensitive to business issues. It’s a risky thing to do. What if you’re struggling to make ends meet yourself; perhaps you have no choice? Here are some tips on how to ask for a raise during an economic downturn.
First things first.
If you don’t need a raise, then don’t ask for one. Venturing into this territory has risks, so don’t put yourself at their mercy if you can avoid it. You might want more income, and so do most other people. You should only ask for a raise if you really need it.
Why might you need a raise?
Until recession really bit (Sept/Oct 08), inflation was high. In the US, inflation hit 5.6% and other countries such as the UK, Germany, Canada saw similar figures. Although inflation has gone down significantly, the effect of high energy and food costs, for most people, we are worse off. If it’s costing more to live now, workers who were just keeping their financial heads above water early last year will be struggling right now.
Is this you?
What’s a ‘fair’ raise?
It’s essential to know the value of your role, based on your skills, experience and don’t forget location. You’ll likely observe a band in which your role pays based on these factors, and if you’re asking for a raise that lies well within that banding then you’ve got a good case, particularly if you’re currently earning below average. Try using Payscale.com (US), Salary.com (US), mysalary.co.uk (UK) or search for one in your country.
Once you’ve assessed the band you can negotiate in, you can calculate the ‘fair’ raise you’ll ask for. In a economically challenging climate, fair is to ask just for what you need and no more, providing it falls within the band. It should be a number you can justify and feel confident in asking for a raise with integrity. PayScale.com offer a neat tool for working out your cost of living . You can use the tool for free here .
Here’s another important thing: comparing yourself to your colleagues isn’t a great way of assessing a ‘fair’ salary. This rarely works as a bargaining tactic in my experience, and you’ll land your colleague in the shtuck – disclosing salary is not a prudent thing to do. It’s much better to compare yourself against the benchmark rather than an individual.
Asking for the raise.
Bill Sturrick, a HR manager in NYC, says “If you don’t ask for a raise right now, then you’ll be lucky to get one. You should ask though, if you need it.”Sturrick believes that asking for a raise now shouldn’t expect a hostile response, “People have to eat and put a roof over their heads, and often the raise needed is peanuts!”
The tip is to lay it out to your employer. Don’t hold back on asking for what you need, but don’t be pushy or greedy. Prepare your case before you ask, and demonstrate why you need to raise to make ends meet. Be honest with yourself and your boss when making this assessment though. Trickery just won’t work. Offer any data you’ve gathered to your boss during negotiation – in fact any information you use to base your case for a raise on you should share. You’ll expect complete transparency from your boss, so you should do the same. Any information you have must be open to challenge.
Also consider your uniqueness in your organization. Are you what’s known as a ‘key-man’? (or maybe ‘key-woman’, but it’s just a turn of phrase!) If you are irreplaceable, then you certainly have leverage to ask for a raise. Strong words of advice though – don’t over-use this, or even mention this during negotiation! Your employer won’t like you have them over a barrel, so only use this as a means of confidently negotiating, not as a negotiation tool itself. If you do, then I can promise you this situation will be short-lived whilst your employer reduces their risk.
It’s much better to emphasize your uniqueness and value by discussing the results from recent performance reviews/appraisals to show you are exceeding your employer’s expectations, and bring in any 360 degree feedback to the same effect. Sturrick advises “Use documented evidence of your value during your negotiations and let the opinion of your boss speak for itself.”
Alternatives to a Raise
Many employees won’t ask for a raise when they know that their employer is in financial difficulty. This is a stressful time for employee and employer!
Guess what though – there are alternatives than a raise which can help out with financial strain.
Take a look at personal expenses that are made in the course of employment. Many of these costs are in commuting and childcare. If a raise is out of the question for you, then ask your employer if you can telecommute (that’s work from home) a couple of days a week, which will save on your travel costs, car parking, possibly childcare and even on small costs like eating out for lunch.
You may also want to try negotiating other benefits to reduce your costs, such as additional healthcare and other insurance. Look for expenses that cost you a great deal but are low for your employer under bulk discount.
I’ve used the word ‘negotiation’ in this article a number of times, but perhaps we shouldn’t see it as a negotiation? This word rings of a win-lose outcome. A discussion about pay during a recession is about searching for a win-win, where you as an employee take home a fair pay that you can live on, and your employer enjoys the benefits of your skills, knowledge and experience for that price. Understanding this can mean you have fair and open discussions with your boss and your HR department – you’re looking for a workable solution to a shared problem.
Check out these similar posts:
- How To Ask For a Fair Raise or Pay Increase During a Recession
- Knowing What You’re Worth
- How To Increase Your Pay
- Freelancers: How To Increase Your Rates, Annually
- 20 Alternatives to a Raise
- Compare Your Salary with PayScale.com
- Is it OK to Discuss Salary With Co-workers?
- How To Get Paid More
- A bit on the side: Is Moonlighting OK?
- Insider Secret: How to Negotiate the Salary you are Really Worth
- 5 Tips for Negotiating a Higher Starting Salary
- Salary Negotiation: Go Beyond Dollars and Cents – like a Pro
- How to Get Promoted – Fast
- The Conundrum of High Salary
- Salary Negotiation: You Will Be Negotiated Down, But Never Negotiated Up
4 thoughts on “How To Ask For a Fair Raise or Pay Increase During a Recession”
This is great advice Simon. I recently landed a job at a nice web dev company and I made the decision to ask my boss keep my name in mind if talks of a new position or pay raise come about and he was more than happy to. I was happy I made the decision to ask him.
Sometimes, I feel the best thing to do is just be honest and ask for something if you feel you need it. You’d be surprised how well people understand and empathize with you.
Great to see you back after the holidays 🙂
@Drew – nice story Drew! It’s great that you acted upon your needs and didn’t hold back. Sounds like you work with understanding people, but you know what? I reckon 99% of people are like that too! Thing is, many people think it’s only 1% of folks who are!
Would you advise me how to keep my pay rate that I was earning before to get my supervisor position.
Now that I ask my manager that I want to step down in my position and want to be a regular associate, they don’t want give me enoughf hours, they are offering me a comision position that I don want to take and that will be getting a $8 dollars an hour plus comission plus if you do fail to met their quotas you will be fired.
I ask if I can have my position as a regular employee but the cut pay is bigger, from $14.86 to $9 dollars en hour. How can I persuede my manager to be fair to me?
@Ruth – thanks for your comment. If I understand this correctly, you would like some ideas on how you can influence your manager to keep your current pay rate and take a job with less responsibility. The role you’re offered is not on a basis of pay you’re happy with, right?
Your manager will have a challenging situation to manage – not only does he/she have to find the extra bucks to pay you the extra wage, but he/she has a bigger challenge if you were to keep your supervisor rate because of either a) it would need to be kept a secret from other associates so that there isn’t a known precedent (and it’s likely all the other associates will want a raise) or b) setting the precedent and opening up the floodgates to claims for higher pay from your peers. Your manager will be thinking about fairness to other associates too.
So with these things considered you will have to really help your manager justify keeping you on the supervisor rates. You could offer to take on other responsibilities, or demonstrate that you have a speciality that adds extra value – something like that. If you’ve been in a supervisor position, you must have been given the job because you have relevant experience and product knowledge that adds extra value – can you still leverage this as a regular associate? Maybe you could take another look at your job description to discover if there are particular competencies expected of you that you really excel at. Maybe you could train other associates?
I think your answer is to discover what extra value you add above and beyond a regular associate that warrants the extra pay. The value you add (even if its just a perception of it) needs to be greater than the extra pay to warrant the exception made for you and to justify the extra management burden if word gets out that he/she has made an exception for you.
I hope this has been help for you.