The Finer Art of Salary Negotiation in a Downturn Economy


For the month of September the national unemployment rate was unchanged at 6.1 percent but was up from 4.7 percent a year earlier.  Raises are expected to remain stagnant with the economy showing no signs of a rebound.  Overall the outlook looks bleak and you are thinking it is probably not the best time to ask for a salary increase.  You may want to reconsider.
Pay raises may be harder to come by in the current business environment but if you prove that you are an indispensible part of an organization’s ability to survive the downturn and can help the organization to thrive during the next expansion you may have nothing to lose by asking.

The average pay raises were at about 3.8 percent in 2008 where in 2007 the average salary increase was 3.7 cited by the latest survey data by global consulting firm Mercer LLC. This is expected to remain the same in 2009.

The Bureau of Labor Statistics cited consumer prices have climbed 5.5 percent from July 2007 to July 2008. This is the fastest spike since May 1991.  Bottom line is salaries for American workers are not keeping pace with inflation.

Workers looking for an above average pay increase will have to prove their worth as many organizations targeting higher compensations for their top performers.  According to Mercer, high performer employees or about 14% of the workforce can expect to see about 5.6 percent pay increase.  Another 08 survey by Hewitt Associates shows top performer salaries grew by 10.8 % and may increase by another 10.6% in 09.



If you feel you deserve an increased you will have to justify.  The justification for increase should be based solely on your performance with established goals, cost saving strategies or new business development.  You will need to show that you have been an asset to the organization with numbers and specific examples.  Be prepared to answer questions and make a solid case. 


Some companies may not be able to provide a salary increase but you maybe able to negotiate on other benefits or put yourself in a good position for the future.  Be creative and always keep a good attitude.  Attitude can go a long way and companies appreciate strong team players.  


Here are a few steps to get you through the process: 


– Research your company to find out how well they are positioned in comparison to their competitors.  If your company is doing well use it to request a pay increase.  If not, with the company struggling, showing you understand can help eliminate resistance from your boss in response to your request.  But this can help set you up for future pay increases.

– Arm yourself with facts that support your request for a pay increase. Make a list of your achievements with any backup documentation from vendors, co-workers, management, etc.
Research your salary within the organization and find out what other professionals in your field and/or location.  This will give you a starting point to bargain.  If you are below then can give you have a bargaining chip to use as a starting point.  If you are on target then position your value as an employee.


Whatever the outcome listen to your boss and show management that you are a top performer.  This could help propel you to new heights in the organization.  Remember, you are your best advocate so time to toot your own Horn.  No one else will care or take the time/energy as much as you will.



This article was written by Liane H. Gould, Manager of Career Services of the ACS Department of Career Management and Development.

3 Responses to The Finer Art of Salary Negotiation in a Downturn Economy

  1. Sam says:

    Nice post. Thanks.

    I’m about to be offered a new job – my second – and your post has come at the right time for me. I was pondering over what you said here, and was wondering what would be an acceptable / professional way to negotiate for the things I want in my new job. Can you please help with specific suggestions and advice?

    >> you maybe able to negotiate on other benefits or put yourself in a good position for the future

    In my new job, I want …

    1. To work fixed, limited timings — 9-10 hrs/day, 5 days a week. I don’t mind working more, but I expect it to add significant value to my tenure and contribute to my long-term professional development.

    2. I want to be able to pursue additional training part-time — in the evenings and on weekends. (an MBA, or a certification – may not be closely related to my new job function). I consider it extremely important for my skill sets to be well diversified in terms of my ability to transition into a different area, should trends turn downward in my current field.

    3. Set clear, well-defined and quantifiable goals at the outset and link my pay to the performance.

    4. At the pay scale that we’ve broadly agreed to, I’d be beginning with at least a 20% upgrade over my earlier position. Quite decent. But I’m very hungry and I want more. And I’m willing to work for it. How do I bargain for more responsibilities, expand the scope of my job responsibilities to justify the raise? Possibly set a time frame too for me to meet my boss’ expectations, and get a hike? What’s the accepted way to negotiate my needs, within a win-win framework?

    Thanks for your guidance, and the top-notch work on this blog.

  2. lhgould says:

    Dear Job Seeker,

    I do want to reinforce that the article was written for a person who is currently employed in an organzization. I would like to emphasize that you should do your homework on the organzation and the market before you negociate your salary. This is an employers market and the organziation can also retract the offer if they feel your demands are not in allignment.

    Good luck!! I can also suggest that if you are an ACS member to use our career consultant program for advice on job search.


    Liane Gould
    Manager of Career Services

  3. This is quite a hot information. I think I’ll share it on Twitter.
    p.s. Year One is already on the Internet and you can watch it for free.

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