Negotiating a salary increase can be daunting, even at the best of times. During a recession, it can become even harder. You don’t want to seem greedy or ungrateful, and at the same time, you want to advocate for yourself and be fairly compensated for your outstanding and consistent contributions to the company.
Questions around, “Is there a right time to ask for a pay rise?” or “Is it appropriate to ask for a salary increase during a recession?” can prevent us from asking for what we’re worth. But then, as the old saying goes, “If you don’t ask, you don’t get.” So – should you ask for a raise during an economic downturn? If yes, is there a better time to ask than not? And if so, how should you do it?
What does a recession mean for companies?
We all know a recession means an economic decline. But what impact does it have on businesses, and how does that affect our salary negotiation?
For some companies, a recession will mean fewer sales, reduced profits, cost-cutting, redundancies, reduced credit and cash flow, a decline in stock prices and dividends etc. Issues with cash flow and limited funds may also impact product or service quality.
But for other companies in more recession-proof industries, the impact might be zero or limited. Recessions also force companies to re-evaluate, reassess and re-invent; looking to enhance and improve to reduce costs and/or simply get better at what they do. As some companies close, the surviving companies now blossom with less competition. It will be what’s happening in YOUR company that will shape the what, when and how of your salary increase negotiation.
When to ask for a raise?
Of course, the best time to ask for a raise is when the company is doing well and meeting its financial goals. However, in a shaky economy, you may need to be more strategic about when you ask for a raise.
3 tips for getting the timing right:
- Assess what’s happening in your company
If the recession isn’t having a noticeable impact on your company, the timing of asking for a salary increase might not be so much of an issue.
However, if your company has communicated financial struggles or is showing signs of financial distress (e.g. unable to make payments, demand reduction, cost-saving initiatives, redundancies, stressed-out leadership) a little bit more sensitivity will be required. With negative change comes the grief cycle – shock, denial, anger, stress, depression, until finally, acceptance. When fear is rampant and everyone is stressed, it may be perceived as emotionally unintelligent and environmentally insensitive to ask for a pay rise. Waiting for the acceptance phase demonstrates emotional intelligence and is more likely to give you the results you’re looking for.
- Use positive performance reviews/feedback as door-openers
Positive feedback whether in a formal performance review or general day-to-day activities is a good sign that your company are happy with you and your work. Both can be great door openers for conversations around a salary increase.
- Time your request around key projects
If you have just completed a big project or helped the company achieve a major goal, that is an ideal time to ask for a raise. Your boss will be impressed by your contributions and may be more likely to give you a raise in recognition of your efforts and success.
What to ask for?
You might know you want a salary increase but what amount should you be asking for? Is it 5%? 10%? 20%?
The answers to these questions will depend on 4 things:
- Whether or not you’re currently being underpaid compared to the market rate
- How far above your KPIs you have gone
- The monetary/positive contribution your additional efforts have made to the bottom line and/or company/team performance
- The budgetary restrictions placed on your manager by HR/the company/the market
When figuring out what salary increase to ask for:
- Do your research. Know the market rate for your position, skillset and experience in your job function and industry. This will help you know how much to ask for and give you ammunition to back up your request.
- Appreciate that doing your job well is NOT a good enough reason to ask for a pay rise. That’s what you’re being paid to do. A salary increase is only warranted if you have gone above and beyond the KPIs of your job description. You will need to prove that your additional efforts have made a significant contribution to the bottom line or company/team performance. Do your best to calculate the impact of your actions on efficiency (translating into a monetary saving if you can), expenses and revenue. The more money you have directly or indirectly saved or made the company, the more you can ask for and justify when negotiating your salary.
- Prepare to compromise. Your boss might not have the budget for a big raise. Most companies, especially multinational companies, have strict salary bands that they have to work within. Be open to other forms of compensation, such as one-month salary bonuses for special achievements, a more senior job title until the budget has been found, more flexible hours, better medical insurance etc.
How to ask for a pay rise?
When coaching my clients, this is where many of them get stuck. Lack of confidence in their ability to negotiate is one reason they procrastinate asking for a pay rise. But for many, there’s also an underlying sense of doubt around their worthiness of a salary increase or confidence that their achievements merit one. Remember – selling is 90% conviction and 10% convincing. Being confident in your worth and your ability to handle negative feedback or pushback are keys to negotiating your salary.
- To increase your sense of worth: write down all of your achievements and all the things about you (skills, knowledge, experience, character, qualities and traits) that helped you to achieve them. Remind yourself of these things daily.
- Prepare a list of as many achievements as possible that show your additional contribution to the bottom line, above expectations. The more data, figures, facts and evidence you can provide, the stronger your case.
- Present your case with conviction. If you don’t believe in your achievements or worth, why should your boss? Be factual in your presentation and your tone, and present the data with strong, confident, composed body language and voice. Practise what you want to say and how you want to say it.
- Prepare yourself for pushback. As much as it might feel like the listener is criticising you or they are not listening to your request, see if you can see it from their perspective. Approach the conversation with a solution-oriented, win-win mindset and seek to find a resolution that works for both parties.
Be brave enough to ask
The number one reason you’ll get a raise is that you asked for it. That’s right – the simple act of asking for a raise can often be enough to get you the pay increase you deserve.
The economy may be shaky, but that doesn’t mean you can’t negotiate a raise. If you have a good case for why you deserve a raise, follow the tips in this article to make your case and increase your chances of getting what you want. And remember, even if you don’t get the raise you’re asking for, you can still try to negotiate other benefits or perks that will help improve your situation.
If you enjoyed this article, you might also like:
- https://zetayarwood.com/10-ways-build-self-esteem-workplace/
- https://zetayarwood.com/get-promotion-faster-10-simple-tips/
- https://zetayarwood.com/applying-jobs-online-no-success/
Are you a career-minded individual ready to take your career to the next level? Contact us to find out how my coaching programmes can help www.zetayarwood.com/contact
About the Author
Zeta Yarwood is a leading Executive Coach, Career Coach and NLP Life Coach in Dubai, helping individuals across the world to achieve success in all areas of their lives. With a degree in Psychology and over 15 years’ experience in coaching, management and recruitment – working for multinational companies and award-winning recruitment firms – Zeta is an expert in unlocking human potential. Passionate about helping people discover their strengths, talents and motivation, Zeta lives to inspire others to dream big and create the life and career they really want.
For further information and inspiration, please visit www.zetayarwood.com or follow on Instagram, Linkedin or Facebook
