It's been years since you've seen a decent raise, and you've had it. So how can you get your boss to pony up? Follow our experts' advice.
Laurie Jaramillo was in a bind. As a regional sales manager at Styles for Less, a women's clothing retail chain, she had boosted 2002 sales by 17 percent in Northern California. But overall revenue for the Santa Fe Springs, Calif.-based company was down, and for the second year, raises were capped at 5 percent. Jaramillo, who lives in Pasadena, wanted to ask for more, but she feared her boss would think she wasn't a team player. "I had real doubts about whether I should ask for the raise," says the 41-year-old.
It's a quandary many workers are facing these days. In 2003 estimated pay increases nationwide averaged 3.3 percent in nominal dollars, the lowest since the 1980s, according to Mercer Human Resource Consulting in New York. In a climate where many people feel lucky to have work at all, should you ask for more?
Absolutely, say compensation experts. "Even weak companies are going to take care of the people they need to take care of," says Bill Coleman, senior vice president of compensation at Salary.com. "The bottom 90 percent might be hearing 'Take one for the team,' but the top 10 percent are often given whatever it takes to improve their compensation."
Ready to claim your share? Here's advice on how to negotiate tactfully.
It's All in the Timing
Don't wait until your annual review to raise the raise question. Find out when your company's fiscal year starts, which is when managers typically make budget requests, and have your talk a few months before that. "You're not necessarily saying, 'Boss, I want a raise,'" says Amy Jantz, senior compensation and benefits manager at WorldatWork, an association for human resources professionals. "You might say, 'Hey, I know you're working on budgets and that things are really tight. I was just wondering what you think about my chance of getting a raise. If you need justifications, I can help.'"
New hires, new clients, promotions, even redecorating mean an improving salary atmosphere as well. If the climate isn't great, have your salary discussion coincide with a professional triumph. Jaramillo asked for a raise — and a promotion — after her company tallied its 2002 results in April 2003. "I sat down with my manager while my successes were still hot and heavy in everyone's mind," she says. She got a 27 percent raise and a new title — director of stores.
Connect to the Bottom Line
"When money is very tight, your manager may have to go up several levels for approval, and those people may not know who you are," says Jantz. Make your case in writing.
Gary Rhoades, litigation director at the Housing Rights Center of Southern California, knew the board of directors would decide on his raise. So in January 2002, he typed up a two-page memo. "I could show that the litigation department was starting to pay for itself," says the 37-year-old Los Angeles resident. "I think the work I put into the letter itself showed how serious I was."
Rhoades got a 16 percent raise, not the 30 he wanted. But he also got more vacation days and a company cell phone.
Your job doesn't directly affect your firm's profits? Note your indirect impact. "If you're in human resources, show how you designed and implemented incentive programs that motivated the sales force to work harder," says Judy Feld, an executive and career coach in Dallas.
|Question: My wife and I are expecting a second child in April. Both our employers offer a flexible-spending account allowing us to withhold up to $5,000 and use this pretax income for dependent-care expenses. Can my wife and I both participate, each contributing $5,000?
— Jonathan Klem, Kansas City, Mo.
Answer: No. The maximum amount of money a married couple filing jointly may withhold for child care is $5,000, no matter how many children they have or how many flexible-spending accounts are available to them. Couples filing separate returns may exclude up to $2,500 each. But here's a tip if you're trying to decide how much money each of you should withhold: If one of you earns more than $87,000, you will save more if the lower wage earner takes the complete $5,000 deduction. The reason is that he or she will save not just on income tax, but also on the 6.2 percent Social Security tax, which is levied only on the first $87,000 one earns.
Salary's Not Everything
Your manager may not be able to bypass strict salary limits, but there could be other incentives. Five years ago 48 percent of companies awarded spot bonuses. Today 53 percent do, and another 8 percent are considering it, according to Mercer. Feld advises clients to ask for bonuses, vacation time or other benefits in addition to raises. "That gives them a fallback position, something the company can say yes to," she says.
One of her clients, a manager at a chemical company in Colorado, knew she wouldn't get a raise due to the economic climate. So she asked to squeeze her work week into four days, and her firm agreed.
Take No Gracefully
If your manager can't increase your salary or other benefits, don't be discouraged. "A 'no' answer is a start, not a finish," says Jim Camp, who coaches corporations on negotiating deals and recently published Start With No: The Negotiating Tools That the Pros Don't Want You to Know.
Ask how you can improve your chances next time. Gary Rhoades was told that the company would consider giving him another raise in six months. Before that deadline was reached, he was named a California attorney of the year by California Lawyer Magazine. "I immediately asked for another raise, which I got," he says.
|My Favorite Interview Question|
|When have you failed in life?
— Bill Stromberg, director of equity research, T. Rowe Price
Why he asks it: "At any job, you're going to be wrong sometimes. In stock picking, you're wrong about 40 percent of the time if you're good, and how you deal with it is very important. A good answer would be, 'I was cut by my high school tennis team, so I joined the cross-country team and became the second-best runner.' A particularly bad answer I've gotten is, 'I've never really failed at anything.' They think it's a sign of strength and want to impress you. But it's just false. We've all failed somewhere, and it shows that you're not able to look at yourself in an objective way."