Six top ways to get a pay rise in 2012

by Cliff D'Arcy on 02 January 2012  |  5 comments
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2012 looks like another year of widespread pay freezes and cuts. Here's how to get a pay rise in 2012.

Would you like a pay rise this year? Here are six ways to win a better package from your employer:

1. Be realistic!

My first tip is to be sensible about what you can expect to squeeze out of your employer. Thousands of British businesses are still experiencing severe financial difficulties, thanks to the double whammy of a credit crunch and economic downturn.

Thus, there's little point in holding out for a bumper pay rise if your employer has seen its annual profits plunge by 50% or more. In tough times, companies look to slash their expenses, not increase them - and payroll is often an organisation's biggest outgoing.

In this situation, be grateful that you still have a job, as hundreds of thousands of people have lost theirs during the downturn, with more redundancies to come. Instead, set your sights on a cost-of-living increase, or try negotiating a performance-related bonus for when business perks up.

2. Be pro-active

Don't just sit back and see what comes along. You need a plan if you're going to beat the odds. As my mother often remarks, "If you don't ask, you don't get" and, in my experience, prior preparation greatly increases your odds of bagging a premium pay rise.

If your employer conducts annual appraisals, then make sure that you build your case well in advance of the big day. If it doesn't, then ask your line manager for an appointment to discuss your ongoing achievements and expectations. Otherwise, the opportunity will pass by and you'll lose your chance.

3. Ask the right person

Make sure that you're making your case to the right people. After all, there's little point in working on your personnel director if s/he has no direct input into the decision-making process for your pay. The best people to bring to the table are your line manager and perhaps his/her boss or department head.

4. Do your homework

These days, the vast majority of managers are driven by targets and statistics. To make a convincing case, you're going to need to crunch some numbers.

You need to find out how well your company is doing, by checking internal reports and any published public data (such as its annual report and accounts). In addition, you should check how rival firms are getting on -- not least because this may reveal job opportunities elsewhere!

Of course, you need to show your bosses how well you personally have performed over the past 12 months. So, if you beat your sales target by 10%, then show this off. Likewise, if your spending has come in below budget, say so - because managers love frugal employees who save the company money. Your goal here is to showcase your achievements in the best possible light.

5. Research your role

If you're doing a great job, but aren't paid as well as others in a similar position, then you have a strong case for an uplift. Arm yourself with evidence to demonstrate this gap, using examples gathered from inside and outside your organisation.

You can get help with this homework by contacting employment agencies, browsing recruitment websites and reading job adverts. (This stage is probably best done outside the office!)

6. Call in any favours

Rather than doing it yourself, get others to sing your praises. Get key people on your side, such as happy clients, suppliers or other contacts inside and outside your organisation. For example, a praise-packed letter from a key client could really strengthen your hand.

Equally, don't be tempted to raise yourself up by putting others down. There's little to be gained by bad-mouthing your co-workers, as it's difficult to gain positive results from negative comments.

Another word of warning: don't overplay your hand by threatening to leave for a firm where the grass is greener. I've seen people use this threat in order to negotiate a higher salary and remain with the same firm. However, this tactic often backfires, as many 'winners' from this outcome become disenchanted later down the line.

Get help from lovemoney.com

Finally, cutting your outgoings by £1 is much more valuable than getting an extra pound in your pay. That's because any extra pay will be taxed at your highest marginal rate, plus National Insurance contributions may reduce it further.

Therefore, to put your household finances on the best possible footing, don't forget to tackle your outgoings as well. Use our free money track software tool to analyse your budget.

This is a classic article which has been recently updated.

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