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How to negotiate a salary increase in tough times

How to negotiate a salary increase in tough times

HR Advice

By Sean Power and Sandra D'Amico

It is that time of year when some employers, and their employees, start to think about an important event on the corporate calendar - the midyear salary review.

Traditionally, some companies - but certainly not all - review their salaries twice a year, with a midyear adjustment around June or July. If you are lucky enough to work for one of these companies, you may be asking yourself what you can do to improve your chances of receiving a salary increase you are happy with.  

With many companies operating under difficult economic conditions, now is a tough time to negotiate a salary increase. Nevertheless, you may have good reasons for thinking that in your case, a salary increase is both reasonable and appropriate. So, how do you negotiate an increase?

First, understand your company's salary review process. Is there traditionally a midyear review? Who makes the decision - is it your manager, someone from HR or possibly even someone from head office overseas? Are across-the-board increments given to all employees or are salaries adjusted on a case-by-case basis? These questions will determine whether you have any scope for negotiating your salary with your manager.

Second, consider whether it is realistic to expect a salary increase. Has your company announced plans for salary increments, or conversely a wage freeze? How well is your company performing in these tough economic times? Are other employers competing fiercely for people with your skills and experience?

Third, think about whether you genuinely deserve a salary increase. When did you last receive a salary increase? How well have you performed since your last salary review? What have you achieved? Have you acquired new skills? Have you taken on extra responsibilities? Are you now a more valuable employee? Is your current salary market competitive or are you underpaid?

If you decide a pay increase is both realistic and justified, then handle the negotiations in a professional way.

First, ask your manager for a meeting. Make the purpose of the meeting broader than just salary negotiations. Say you would like to discuss your professional development (learning opportunities and career goals), your performance and your remuneration. In salary negotiations, timing is crucial - don't raise the topic when your manager is busy or stressed, or just after you have disappointed your manager with a poor piece of work.

Consider whether it is realistic to expect a salary increase.

To prepare for the meeting, think about your career goals and professional development needs. Also, be clear in your mind about why you think a salary increase is reasonable and appropriate. Think of possible alternatives to a salary increase, such as health insurance, study allowance, telephone allowance or even a performance bonus.

During the negotiations, always remain calm, polite and professional. The discussion may be slightly awkward for both you and your manager, so don't inflame the situation by taking things personally or by getting emotional. Be firm in your convictions, but without being aggressive.

State the reasons why you think a salary increase is reasonable and appropriate. It is important that you are willing to listen to your manager's point of view. He or she may have very good reasons why a salary increase is not possible at this moment.

The biggest mistake you can make is to issue a non-negotiable salary ultimatum. If you genuinely think you are being underpaid, and if you intend to resign if you don't receive a satisfactory increase, then be prepared to negotiate a bit harder. But be careful here - don't box yourself into a corner where you feel you have no option but to resign. Remember that today's job market is not as good as it was a year ago.

Even if you are not successful in negotiating a salary increase, simply going through the negotiation process may be a worthwhile exercise. If nothing else, your manager will have a better idea of your career goals, your professional development needs and your salary expectations. This will help you in the long run.

Sean Power is a consultant to HRINC, one of

Cambodia's leading HR services firms, and Sandra D’Amico

is the managing director. Contact [email protected] for more information.