Tips to Negotiate Salary in an Uncertain Economy

Negotiating your salary in an uncertain economy can be a daunting task. Whether you're starting a new job or want to ask for a raise, receiving the salary you deserve is vital. But how do you navigate this normal part of employment with a looming recession? Read on for some tips that can help you feel confident going into any type of salary or raise negotiation.

How Recessions Affect Salaries

Whether salaries increase or decrease during a recession ultimately depends on the industry and company. In general, however, most research suggests that salaries tend to remain relatively stagnant. While some industries may be harder hit during a recession, most companies are reluctant to decrease salaries due to potential negative effects on employee morale. Instead, employers tend to combine competitive pay for their most important employees with layoffs for other sections of their workforce. This makes a recession a more difficult time to ask for a raise.

Is it a Good Time to Ask for a Raise?

Despite the economic uncertainty, you may still be considering asking for a raise. Here are some reasons why the time may or may not be right:

Reasons You Should Ask For a Raise

1. You are in a position of leverage: In a recession, companies may be more willing to negotiate salaries to retain experienced and talented employees who can help them stay competitive. This could be a great time to leverage the value you contribute to the company if you have the data to back it up. 
2. Your company has surplus funds: If your company is performing well despite the state of the economy, it may be willing to pay employees more to keep them happy and motivated.
3. You aren't appropriately compensated for your skills: If there is a gap between your current salary and what other companies are offering for the same job, now might be the right time to ask for a raise. 

Reasons You Should Not Ask For a Raise

1. Your company doesn't have the budget for it: If your company is facing economic difficulties, it may not have the resources to grant a raise or salary increase. 
2. You could get laid off: If there is a possibility you could be laid off in the near future, it is unlikely to be the right time to ask for a raise. 
3. Your timing might not be right: There may be times of the year when your industry faces tighter margins and smaller budgets. Asking for a raise during these periods may be less successful. 

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How to Successfully Negotiate a Raise

If you decide that this is the right time to negotiate your salary, you need to make your case. The uncertain economic climate means your employer may be more reluctant to give you a raise or salary increase. Therefore, the need to present strong evidence and reasoning to support your request is more important than ever.

Before negotiating your salary, gather data that highlights your value to the company. This can include data on sales, big projects you've worked on, money you've saved the company through cost-cutting initiatives, or internal processes you've created or improved. Additionally, make sure to have your performance reviews handy as well as any certificates or awards that demonstrate your dedication and accomplishments. Filling out a salary negotiation worksheet can also help you prepare. 

In order to effectively negotiate your salary, you'll need some specific data on your industry and company. This includes:

• The industry average for your position
• The internal salary ranges for your organization
• The salaries of your fellow coworkers
• The value you add to the company

Coming to the negotiation table with information to support your case will give you your best chance at securing a raise.  

You Might Not Get a Raise Even if You Deserve One

No matter how well you prepare and how confident you feel going into a salary negotiation, it’s important to remember that there is no guarantee your request will be granted. Recessions often mean that employers are more conservative with their budgets. They may not have the capacity to grant the raise you're asking for, even if you deserve it. 

Negotiating a salary or raise during economic uncertainty is no easy feat. For the best chance of success, consider all factors carefully, prepare with data and reasoning, and recognize that even if you deserve the raise, it may not happen. To gain a better understanding of the salary negotiation process, visit iHire’s Job Seeker Resource Center for more resources and information.