I’m posting this article from Moneywatch.com hoping it will inspire someone to stand up for herself even during the dark times. EMP
HOW TO GET A RAISE IN A RECESSION
In a recent episode of Mad Men, junior copywriter Peggy Olson confronts what may be a familiarly frustrating situation-trying to get a raise when times are tough. She points out that she’s underpaid compared with her male peers and argues that she needs more money because she’s just moved into the city, but to no avail. “It’s not going to happen,” her boss says coldly, noting he’s fighting for paper clips from the agency’s penny-pinching new bosses. Peggy leaves the office dejected.
In times like these, raises are tough to come by. But there are a few things you can do to increase your chances of leaving your boss’s office happier than Peggy did. While base salary increases at U.S. companies were at their lowest levels in more than 30 years in 2009, variable pay — bonuses, profit sharing, and other kinds of nonrecurring compensation — is currently at an all-time high at about 12 percent of payroll as managers do what they can to reward their top people or risk losing them. Here’s how to make your strongest possible case for a bigger paycheck.
Do Your Research
Even if you believe your work ethic and results are the stuff of office legend, you’ll have to remind your boss of everything you’ve accomplished over the previous year. Pull together a presentation or portfolio that showcases the quantifiable results of your work. Remember: Management cares about results — either how much money you saved or made the company — not things like how many hours you spent on a project, says Ford R. Myers, president of Career Potential in Haverford, Pa., and author of Get the Job You Want Even When No One’s Hiring. Keep track of every instance where you’ve contributed to the company’s bottom line. “Let’s say you were in charge of the company’s sales conference in Las Vegas,” says Myers. “Did you negotiate better rates on the hotel and airfare? Or perhaps you got a better contract on services or supplies the company uses.”
Arm yourself with current market data on the salary range for your position at comparably sized companies in your industry. Sites like Payscale.com, Salary.com, and Glassdoor.com are good places to start; for further advice on how to benchmark your salary, see this MoneyWatch story. Your goal is to get to the top of your position’s salary range, or get a promotion, says Ramit Sethi, author of the book and blog I Will Teach You To Be Rich.
When Tamara, 28, an accounts manager at a marketing firm who requested her last name not be used, asked for a raise in May, she brought a list of all the additional responsibilities she had taken on during the year and the new clients she had brought to the firm. She had accepted about $5,000 less than she wanted when she was hired in April, and at her six-month review, was told the firm didn’t have the budget to give her a raise. But when her annual review rolled around, she managed to get the raise, taking her up to the salary she had wanted. “I think I impressed them by talking about what I had accomplished, and they were afraid if they didn’t give me what I wanted this time, I would start looking elsewhere,” Tamara says.
Get the Skinny on Your Company
Your boss may say the company can’t afford to give raises right now, but don’t take his word for it. Check out the financial health of your firm before asking, and gently incorporate that information into the reasons why you should get a raise. For example: “I understand the company’s need to be prudent with expenditures, but we had excellent first and second quarter sales.”
Of course, since you’re probably spending 50 hours a week in the office, you have a fairly good idea how business is. But a few resources can help you compile the numbers. For public companies, look at the most recent financial reports, especially profit margins, income statements, and cash flow, since these are good indicators of a company’s health, says Pete Bible, a CPA and head of the public companies group at Amper, Politziner & Mattia. Analysts also publish their views of public companies and those with public debt are reviewed and rated by Moody’s. For privately held companies, consult the Web sites of Hoover’s or its parent company, Dun & Bradstreet. Keep in mind, though, that much of the information there is likely to be self-reported, and so it may paint a rosier picture than reality, says Seth Ellis, CEO of RWE Private Wealth in Orlando, Fla.
Apart from these sources, you also probably have access to a lot more financial information than you realize, Ellis says, depending on your position in the company. Senior managers see profitability reports, sales reps get quarterly sales reports, manufacturing staff deal with costs and expenses, and purchasing staff have information on how much inventory the company is buying and how much is being sold. You can also sift through trade publications for information on how your company’s industry is faring overall.
Tell Your Boss What She Wants to Hear
Demanding a raise at a time when your boss could probably find 10 unemployed MBAs willing to do your job isn’t a particularly smart way to negotiate, says Jeanette Nyden, a business attorney in Seattle and author of Negotiation Rules! A Practical Approach to Big Deal Negotiations. Instead, approach her with a softer line that acknowledges whatever economic pressure the company might be under and that emphasizes you’re a team player. So you might say something like: “In light of the fact that I’m taking on new responsibilities for the company, I would like you to consider raising my compensation,” rather than “If I have to do two jobs, I expect to get paid for it.”
And while it might seem like you don’t have much negotiating power without another job offer in hand, you probably have more leverage than you think, says Carol Frohlinger, principal at consulting firm Negotiating Women. If you’ve picked up the work of colleagues who have been laid off, that makes you more valuable to the company. And if there’s a hiring freeze in place, so much the better — managers who are unable to replace departing employees will want you to stay, and more specifically, to stay in their department.
Managers also tend to look at the big picture when deciding whether it’s worth it to go to bat for someone asking for a raise. Todd M. Schoenberger, managing director of investment management firm LandColt Trading in San Antonio, Texas, said he looks not only to how much employees earn for a firm, but how much they cost the firm and what their upside is. Do they spend a lot on corporate trips? Are they a nuisance in the office? And can they accept new responsibilities if they get a bump in pay? “[This last question] is the most critical because employees have to sell themselves if they want more money, and the best way to do that is to ask — almost beg — for new roles and responsibilities,” says Schoenberger. “Simply asking for more money because you want more money isn’t going to cut it.”
Kristi Casey Sanders, co-owner and editorial director of Atlanta Metropolitan Publishing in Atlanta, Ga., echoes Schoenberger’s comments. “As a senior manager, I need people who bring solutions, not create problems,” she says, adding that the employees she’s going to work to keep are those who show initiative. “If they don’t have all the information they need, they figure it out. If they have some spare time, they pitch in and help someone else.”
Think About the Bigger Picture and Negotiate for the Long Term
It may be that even a mountain of evidence showing you deserve a raise won’t get you one, because it’s simply impossible this year. But that’s not your cue to give up. Instead, ask if the company would be willing to consider compensating you in other ways such as paying for added training, giving you more vacation, or allowing you to work more flexible hours.
Penelope Truck, founder of the blog Brazen Careerist, which provides career advice to young professionals, says that the meager raises people might be able to get nowadays probably aren’t worth as much as good opportunities to learn new skills. “Ask to get into a mentoring program, for special training, to be part of a special project you normally wouldn’t be involved with — all these will enhance your skill set and make you eligible for a change in the type of job you do, which would be worth more in the long run,” she says. “Most people don’t increase their worth in the company without changing their job and getting a promotion.”
And don’t give up on trying to get that raise. Get your boss to agree to revisit the issue of your compensation in six months, and set a date for the follow-up meeting. Agree on some specific goals you will achieve in that period, such as a certain percentage increase in sales, or number of projects that will be completed. Then, reiterate everything discussed in a formal email sent to your manager, so that both of your expectations are clear: he wants certain targets met; you want a raise in six months. Keep track of what you’re accomplishing in that period, and email your boss (and copy whomever else is responsible for compensation decisions) monthly updates on the status of your work. “It will show that you are willing to stick with the company and continue to work hard, even through bad times,” says Jonathan Alpert, a psychotherapist and career counselor in Manhattan. “And that will give your manager confidence in you.”