The Finer Art of Salary Negotiation in a Downturn Economy

October 27, 2008


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.