Bucking for a raise
Globe and Mail Update
Is now the time to hit your boss up for that raise? Toronto-based Hay Group reported this week that competition for workers is forcing employers to become "more aggressive" on pay.
This means companies are budgeting for average increases of 3.8 per cent in base-rate salaries in 2008. An increasing number of employers are also throwing in year-end bonuses to keep the troops happy, according to a story published Tuesday on globeandmail.com entitled Bosses pay up to keep talent.
Workers’ bargaining power is greatest in Western Canada — Alberta employers are forecasting average increases of 4.9 per cent in base salaries next year. But employees elsewhere are gaining the upper hand, as well.
"Quite simply, there are not enough workers," said Karl Aboud, Hay Group’s national director of reward management. "Companies can’t afford not to be aggressive on pay adjustments because they have to attract new workers."
As employers put together their salary budgets for 2008 in the face of a tightening labour market, employees naturally wonder whether it’s a good time to make a move on the money front.
Career coach Alan Kearns, founder and head coach of Ottawa-based CareerJoy, was online to answer your questions on how, and when, to negotiate that pay boost — without getting laughed out of the boss’s office.
Join the Conversation or submit a comment.. Your questions, and Mr. Kearns’ answers appear at the bottom of this page.
Mr. Kearns, a founding member of the International Association of Coaches, has almost two decades of experience as a career adviser. His firm has offices in Ottawa and Toronto and offers "telecoaching" to clients elsewhere in Canada on career management, salary negotiations and other matters. CareerJoy also offers free advice through its website, www.CareerJoy.com.
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Virginia Galt, Globe and Mail: Good afternoon, Mr. Kearns. Thanks so much for joining us today to answer questions on the finer points of asking for a raise.
Clearly some of us are in a better position than others to press for more money — there’s not much bargaining power when your employer has just announced mass layoffs.
Overall, however, recent reports from compensation consultants indicate that Canadian employers are starting to worry about labour shortages, and are willing to pay more to keep their workers happy.
If, in fact, an employer is feeling more generous, do you have any opening thoughts on how to go about asking for a raise — or how not to, for that matter?
Alan Kearns: Asking for a raise is one of the more difficult challenges for most professionals. If we are honest, we would rather our employer come to our office with a large bonus and raise and send us home early.
The reality is somewhat different.
I think it is important to start to build a business case for your situation. Gather the facts about what you have done to earn money or save money for your employer.
At the end of the day companies run businesses to earn profit, so you must structure your conversation about your raise from how you have impacted the business, and the soft stuff.
The biggest mistake I see is professionals who focus on the value-added and their feelings about what they should be paid rather than core issues.
The other piece to remember: "whoever is willing to walk away wins." I learned this in my bartering in Cuba — if you are willing to stand up for your needs you are more likely to get what you want.
Above all keep it professional, not personal.
D Mores, GTA Canada: Good afternoon Alan. I notice skepticism about the premise of a pay raise driven by labour shortages.
Other than the oil industry and its effect on the local economy, where are these opportunities?
I’ve had friends (Ontario health care & pharmaceuticals) looking for work for over a year, and my former colleagues in the plastics (related to auto & manufacturing in Ontario) are all worried about their jobs. Any light you can shed for those of us not as fortunate would be welcome.
Alan Kearns: Yes, you are correct. There are there are certain "hot" sectors in the economy where you have more negotiating power. It is . . . supply verses demand.
That said, my experience is that you can negotiate in more scenarios than you think. My advice, if you are in a market that is not growing at the same rate, is to be the best in your department.
Be the first to do the extra things, deliver on time and under budget, and be professional in your dealings with your boss.
If you have a positive professional reputation, you will most likely be the least likely to be impacted by layoffs and you will have more negotiating power.
If the company is shutting down you can still "trade" on your reputation. Senior managers will move on to new opportunities, and will be more likely to connect with you to see if you are interested in joining them.
For those laid off, network, network, network….and volunteer volunteer volunteer…
One professional was involved in management consulting, and through his volunteering on a committee he started to build relationships in the green energy sector.
He impressed the CEO with his role on a volunteer committee, and with no experience in the green energy market was hired in at a mid-level role.
Building your network . . . is key with managing your career. When you are in demand, it certainly makes it a lot easier to negotiate.
Cameron Reid, Canada: I’ve just been transferred to a new position — it’s a lateral transfer in terms of job description, but it involves essentially being part of starting up a new department in a recently acquired company.
I will be required to learn a large amount of new information and regulations for the position, though the basic duties of my job will remain the same.
Is now a good time to ask for a raise? How should I approach the matter and how much should I ask for?
Alan Kearns: Cameron, first of all, this sounds like a great new situation for you professionally.
I have a real bias for start-up situations within existing companies. This offers, risk, visibility and some security within the same role.
This is a great time to ask for a raise. It is most likely that you are well thought as they are asking you to be involved with an acquisition and it shows they value and trust you.
I would create a business case based upon the deliverables around your new role.
My advice would be to position the discussion around performance and pay — tying results to pay is a great way to share risk and reward. It may be more difficult to get a bump in your base (although I would ask for that as well).
My other suggestion would be to discuss where the next step would be leading to, should you deliver upon the agreed upon objectives.
This is an optimum time to be bringing up career planning with your employer. You can ask them why they have asked you to do this role — and where do they see you moving upon successful completion of this function?
This conversation can crystalize whether you are on the same page about where you are heading within the organization.
Alan Maguire, Barrie, Ont.:
As an employer in several centres in Ontario, I would like to know how many other employers are looking at paid benefits as a way to retain staff.
Salary in the retail business is very difficult to continue to increase, so I’d also like to know how many employers are using bonuses based on results as another approach to retaining staff.
Alan Kearns: Alan, in many sectors, including retail, it is becoming more and more difficult to raise salaries.
Every business model has its limits. In survey after survey, you will find salary ranked third or fourth in most employees’ needs.
That said, employees don’t want to be underpaid.
There are a number of other issues related to employee satisfaction, especially in the retail sector.
One of the employers we worked with in the retail sector changed a few key things with his employees. He started with surveying his employees and asked what they wanted to see improved within the company.
This had a two-fold effect: it showed he was genuinely concerned, and it allowed his team imput . . .
In this case, they ended up working more closely on scheduling issues to improve work-life balance. They increased their benefits package and reduced the amount of hours needed to receive the package. They also added a bonus program based upon the team and store performance.
At the end of the day, your employees have key needs — to be rewarded properly and to be respected, and have a voice.
Most employees quit due to how they are treated as a professional, not over $1 per hour.
Kevin Rydzik, Canada: This one has always perplexed me. Why is it that when you have worked at a company for some time and ask for a raise, they are always reluctant or say that funds don’t allow for it?
It’s not like we don’t see all the wasteful spending that goes on every week.
If the person is doing a good job then why not reward them, keep them happy and employed at the company? Yet when you tell them down the road that you are leaving, management tries to throw money at it.
Too little, too late at that point.
Alan Kearns: Kevin, you see the elephant in the room.
Organizations and people are not very good with change. There is the "policy" discussion, there is the "budget" discussion, there is the "pay range" discussion.
Very few managers are proactive, and it often means they will have to stick their neck out to get a raise outside of the normal one-per-year cycle.
Companies and human beings tend to react with more clarity in times of crisis. Many, many times companies counteroffer, and in most studies, a large percentage of professionals will still leave within 6 months.
As an employee, put together a business case and speak with confidence and authority. If you don’t get a fair deal, my advice would be to brush up your resume.
As a manager in a company, listen to the business case and go to bat for your employee if you think it makes sense.
It is better to deal with the short term pain than the long term pain of losing one of your key people.
Alan Spurrell, Newfoundland: How long should you be in a position before you even consider asking for a raise?
Alan Kearns: I would wait until after your welcome aboard lunch…
Seriously, there are numerous factors to consider related to your question.
My first thought: make sure when you are negotiating your package with your new employer that this is one of the things that is covered off before you sign on the dotted line.
I am assuming by your question that this may not have been clarified.
You will be having three or six month review before you are made officially permanent. This is a good time to clarify when the organization looks at raises.
Usually it is done on a yearly or calendar basis — or, in some cases, it can be based upon a significant contribution or deliverable.
Make sure your level of contribution is higher than expected and you have raised your profile across your new company.
This is the best way to assure a positive outcome with your employer.
Virginia Galt, Globe and Mail: Thank you so much for your strategic advice, Alan.
Any closing thoughts you would like to leave with our readers?
Alan Kearns: When you are negotiating, the key is to consider all the factors in the discussion. As I learned in my days at Cub Scouts: be prepared.
Start with the company’s needs, and end with yours. Remember there are a number of things that can be negotiated — hours, location, education, benefits, vacation, title and, yes, salary.
Always keep in mind the principles of what would be a fair trade for everyone.
The final lesson from Cubs I would share related to this topic: "The Cub respects the Old Wolf, The Cub respects himself/herself and does their best."
If you do this, you will win the game in the end.