What’s the trick to getting a raise in a soft economy?
Economists expect continued weakness in the labor market this year, according to a survey by the Philadelphia Federal Reserve Bank. Employers will shed 45,000 jobs a month on average in the current quarter, forecasters predict, and unemployment will rise to 5.5 percent from 5.1 percent by the fourth quarter.
At the same time, companies are expected to hand out raises of 4 percent this year, according to a survey by the Washington-based Economic Research Institute. For example, at my brother’s wedding over Memorial Day weekend, I chatted with a friend and HR executive who said his firm is still doling out raises to top performers, even though the company is in the battered financial services sector.
The key, experts say, is to steer clear of some common pitfalls in your quest for a bigger paycheck. Here are the top seven:
Mistake No. 1: Assuming you can’t ask for a raise.
“People have a surprising amount of power even in a sluggish economy,” says John Challenger, chief executive officer of Chicago-based outplacement firm Challenger Gray & Christmas. “Unemployment is still only around 5 percent, and that’s very low.”
Cynthia Shapiro, a California-based career coach and author of “Corporate Confidential: 50 Secrets Your Company Doesn’t Want You to Know — and What to Do About Them,” agrees.
“They’ll break the budget if you make a compelling enough case and they’re worried about keeping you,” she says. “A lot of people will sit back and say ‘I’m doing such a good job, they’ll notice and offer more money’ — but they’ll assume you’re happy if you don’t ask for anything.”
Mistake No. 2: Justifying your request for a raise.
Soaring prices for food, gasoline, and other staples may prompt you to seek a pay hike — but that’s not what your boss wants to hear.
“Most people ask for money because they personally need more money — they say, ‘I just had a baby’ or ‘we just bought a house’ or ‘I lost money in stock market’ or ‘I’ve been here a long time and work really hard,’” says Shapiro. “Don’t ask because you feel you deserve or need more — make a case that you are critical to the company’s success.”
There are essentially only four measures of performance — quantity, quality, cost, and timeliness, says Robert Lorber, an executive coach and co-author of “Who Are You and What Do You Want?” to be published this month.
“Look at what you can do that adds value,’” he says. “Can you bring in new customers, reduce costs, improve efficiencies, or boost sales? Then you’re open to asking for more money. If your company is in crisis mode, your job is to make sure your bosses understand how you can be part of solution.”
Search Salary.com to find the current market rate for your position, taking into account years of experience, the size of your firm, and the region of the country in which you work. Then base the pitch on your accomplishments.
Mistake No. 3: Asking at the wrong time.
Don’t wait for your review to make the request. “Ask when you just prescription medications did something that made you look like a star,” Shapiro says, such as landing a major client, saving your department a bundle of money, or receiving a glowing email for your marketing campaign.
Don’t ask the month after you’ve taken a holiday, Challenger suggests: “There’s no question that you have a right to your vacation, but if you ask after you’re gone ten days, you’ve lost some impact.” Know whether your boss is a morning or afternoon person, and time your proposal accordingly, he adds.
Mistake No. 4: Tooting your own horn too loudly.
Rather than widely proclaiming your triumphs, build key alliances with people across the company who are working on the firm’s highest priorities, Shapiro suggests. “In a down economy, if you want to be promoted when the dust settles, be generous with your time,” she says. “Offer yourself in service to other people. Get people around you talking about how great you are. Then you don’t have to toot your own horn.”
Meanwhile, be wary of grabbing the spotlight and outshining your boss. “Make it your responsibility to keep that relationship strong,” says Challenger. “Your raise request will be met much more favorably if you and your boss are simpatico.”
Mistake No. 5: Promoting your unconventional style.
Emulate how people at the top look, dress, talk, and behave, both at work and company social events. “They’ll have a dress code, a language — maybe they all play golf or have an MBA — whatever it is, that’s your path,” says Shapiro. “People at the top hate looking at lower levels and seeing one of their own. They’ll pull you up to their level if you look like you belong there.”
Use a resource like LinkedIn, a professional networking site with more than 20 million members, to research career paths of people at the top. Sign up for free and create a profile page that basically reads like a resume, including the companies for which you’ve worked. Once you enter that information, you can click the name of your current employer to display every other LinkedIn member that works at the firm. Click on their profiles to view their education, tenure, and experience.
Also adopt the causes of the people in the C-suite, Challenger advises. “Look for what your boss does in public service, and join in, whether it’s doing sustainability and green projects or volunteering at a food bank,” he says. “It’s a good way to raise visibility.”
Mistake No. 6: Listening to what the company says instead of watching what it does.
Pay attention to who the company rewards rather than listening to its lip service about values. “Most people don’t keep their eyes open,” Shapiro argues. “They focus on their work and think if they do a good job and are talented, they’ll be taken care of. But only 50 percent is how talented you are — the other 50 percent is being culturally savvy about your company.”
For example, Shapiro describes a Fortune 100 company that strongly promoted a new work-life balance program.
“They did it to appease the shareholders, because they had earned a reputation for being slave drivers,” she recalls. “They continued to reward and promote the people who put in major hours. People who didn’t have their eyes open — who were leaving to go to their kids’ soccer games — got crunched in the process. Sometimes companies preach ideals they can’t live up to; it’s meant for PR, not for the employees.”
Shapiro counseled a manager at another firm who was laid off while on maternity leave. “She thought, ‘I’m a VP, of course they’ll take care of me,’” Shapiro recalls. “I asked her, ‘What’s the precedent? What have they done for others who went on maternity leave?’ She realized every single one of them had never come back.”
Mistake No. 7: Quitting when you don’t get the raise you want.
If you can’t get the raise you seek, you’ll likely find it by switching jobs — but don’t quit your current gig, says Shapiro. “In a down economy, the trick is to look for a new job while currently employed,” she says. “Look from the solid foundation of a current job; you’ll always get more offers.”
(Adapted from my Yahoo!Finance column)