How to Ask For A Raise In Tough Times
There's no doubt that financial markets have been tumultuous - even scary - these past months. So what's to prevent your boss from answering your request for a raise with a deep-throated laugh?
First, maybe you're worth it, even during challenging times. Second, perhaps your market sector is holding steady, despite the overall economic mood.
In either case, try to get a raise while you can, advises Alan Johnson, a New York City-based compensation consultant. "It's not a terrible year to ask for something like that, but not as sweet as the past," he says. "In 2008, it will be much harder, so it's better to ask now."
Even when markets are jittery, asking to bulk up your compensation isn't likely to lead to a black mark on your record. "People on Wall Street usually ask for a raise. It's not going to be held against you," says Johnson.
What's Your Motivation?
Especially during iffy times, the first step toward asking for a raise is defining exactly why you're worth more. "There are usually a few triggers associated with the question," says Jan Rose, a principal with Capital H Group, a Chicago-based human capital consulting firm. These might include believing other employees are getting bigger increases than you are, or receiving an offer from another investment firm.
However, be cautious about asking for a raise just because you have a better offer from another firm, Rose advises. "There's a lot of debate going on in the industry about whether to counter-offer when an employee gets a better deal elsewhere. It creates precedent, and those employees are unlikely to stay anyway." Many companies will consider a raise under the circumstances only if they're dealing with a top performer, she says.
Being able to demonstrate a successful run in your position is always a plus. "A high performer in any market, including this one, can still demand top dollars," says Rose. "There's always a demand for good people."
Your Sector and You
The chances of success are obviously greater if you work in a sector that's skirted this summer's fallout. "Money doesn't disappear. When someone loses money, someone else makes money," says David Claypoole, the principal recruiter of Parks Legal Placement in Summit, N.J., who specializes in finding talent for hedge funds.
Claypoole says many of his hedge fund clients are having a good year. The Credit Suisse / Tremont Hedge Fund Index, comprised of 455 funds, returned 9.93 percent through September 30. "You're looking at institutions that take short positions - they're taking bets against the market - so when the economy is bad, they make money," he explains. However, he notes, funds that invested in mortgage-backed securities haven't weathered the sub-prime crisis very well.
Mitch Feldman, president of the New York-based executive recruiting and management consulting firm A.E. Feldman, points to a recent Bureau of Labor Statistics report as an indication the wider employment market isn't so bad. The unemployment rate for October remained unchanged at 4.7 percent. Although unemployment rates for workers in the "financial activities" sector increased to 3.2 percent - up 1.2 percent from last year - that doesn't mean all of the industry's sectors are suffering, he says. His recruiting firm is currently conducting searches in finance, particularly in accounting. Feldman also notes more client interest in filling risk management positions. "But real estate and mortgages are in the pits," he says.
Johnson notes that investment banking and asset management are still doing well.
Proving Your Worth
Once you decide asking for a raise is worth a shot, be ready to prove your worth.
Demonstrating that you have more responsibilities than you did last year could be one effective tactic. "You always want to be able to say that your job is now bigger. It's easier to make the case when you're not comparing apples to oranges - and trying to look at what your job pays compared to someone else's," says Johnson.
Jan Rose of Capital H, says to present facts that prove you're a top performer. You're also in a good position if you have data that shows your pay rate is below market, especially for your performance level, she says.
If your request isn't honored, or if you receive just a small increase, look at the bigger picture. Consider the other elements of job satisfaction, Rose suggests, such as whether you like the firm's culture, or enjoy a flexible work schedule. "It's not just about pay," she says.