Friday, January 30, 2009

Asking for a Raise? Now?

In tough economic times many companies are resorting to aggressive cost cutting measures, including pay freezes, benefit reductions and lay-offs. However, some folks still feel that they need or deserve a raise, and one such anonymous reader recently found his way to Money and Such. So here is my take on the reader's query: how should you ask for a raise in a tough market? I'll break the question down into several topics:

Should you ask for a raise when the economy is in decline?

The short answer is "probably not". The more detailed and nuanced answer is that it depends on your specific circumstances. Obviously, not all companies are cut from the same cloth. While some are struggling to survive, others are actually thriving in this kind of market. If your company is one of the ones struggling, asking for a raise is the equivalent of wandering around a firing range with a target on your back: prepare to lose your job. However, if your company is one of those who is doing well in the current conditions, asking for a raise might not be a bad idea. Even if that's the case, be aware that when unemployment is high and headed higher, companies feel that they can easily replace team members who decide to leave. They also consider it less likely that employees will quit over compensation issues. After all, it's going to be difficult to find another job. Bottom line - your negotiating power in this kind of market is pretty limited.

Consider Your Specific Situation

Before you hit the boss for an increase, you should consider your specific situation. If you are well respected in your organization and are considered a star-performer, your chances of getting a raise are obviously better. If you are a marginal player? Forget about it. Unfortunately, I find that many marginal players have an over-inflated sense of personal worth (this is one of the things that makes them marginal players to begin with) - so try to be honest with yourself.

Other cases where I would consider asking for a raise are if it was previously promised to you; if a compensation review is part of your employment contract; or if you were recently promoted.  Even so, think twice before insisting on a salary increase. This may backfire.

How to ask for a raise if you decide to do so?

If you decide to ask for a raise, remember that your chances will improve if you build your case well, and if you are tactically sophisticated in how you go about getting that increase. Here is some advice on how to ask for a raise and how not to ask for a raise. Finally, here are some suggestions about what to do if you don't get the raise you wanted.   

Enjoyed this post? Please consider subscribing to Money and Such by free RSS Feed or by email.

No comments: