Tuesday, October 14, 2008

5 Salary Secrets Your Company Won't Tell You

It's normal to wonder how and why you get paid the salary you do. After all, it's not a decision process most employers are willing to disclose, at least not without a little prodding. So what are the best-kept secrets when it comes to salary decisions at most companies? And how can you use them to your advantage? Let's take a look.

1. For most companies, 3.9% is the average budget increase for salaries.

Yes, sad but true. According to the 35th annual WorldatWork Salary Budget Survey, the "actual increase in salary budgets was 3.9% in 2008." The number is expected to stay the same in 2009.

This means, that for most U.S. workers, the average raise will be about the same, with "high performers" receiving about a 5% raise, and "low performers" receiving 2% or less, the survey authors note.

"When people are looking for 6-8%, well, very few people are getting it," says Rebecca Mazin, co-founder of the HR consulting firm Recruit Right and author of "The HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals."Knowing this can make it easier to stomach a 4% raise -- while it may not equal big money, it actually means your employer values you. Anything more means you're likely considered a top performer, and anything less means you may be underperforming.

2. Your employer (or future employer) may not know the current salary averages.
Just because a whole wealth of salary information is online these days doesn't mean your company has any idea what the normal salary is for a person in your field and in your city. If you do your research and discover your salary is abnormally low, it can be a great negotiation tool when you talk to your boss about your annual raise -- or when you're accepting a new job offer. He or she will realize they could easily lose you since many competitors nearby are paying better.

"You need to go in with some data behind you; you at least need to know what the going rate is,"
says Dawn Rosenberg McKay of About.com Guide to Career Planning. "[That way] you'll know if you're being outlandish or asking for something ridiculous."

3. Most managers have a short memory.

Raises are given annually, and so it's important to keep track of all your achievements within the past year -- don't expect your boss to remember your big project from eight months ago. Using a spreadsheet or a special email folder, keep track of your accomplishments as they happen, so when the time comes, you have a strong case for a raise.

Accomplishments that show you've either saved the company money or earned the company money are the best ones to highlight, especially if you can specify an exact figure. If that's not possible (which is the case for most employees), take note of any extraordinary praise you received from managers or fellow coworkers, any special thanks from clients, and any other ways that demonstrated you went above and beyond your normal job duties.

4. Your manager probably has little influence over your salary.Decisions about salary increases for all employees at a company are often made at a high level of management. So, even if you follow all the tips above, your manager may have minimal control over your raise. Case in point: Mazin recently worked with a nonprofit organization whose board decided to give every employee the exact same raise.

There's not a lot you can do in this situation, but if it leaves you feeling dissatisfied or taken for granted, it may be time to look for a new job.

5. Threatening to quit can result in a big wage increase (but it's risky).

If you're hoping for a big raise, or were disappointed by a recent raise, you may want to start job searching. For most people, the biggest salary jumps they have in their careers occur when they get a new job or threaten to quit because of a tantalizing job offer.

Sometimes, telling your current employer about your new gig can be a potent bargaining chip -- they may be willing to match the new offer just to keep you. But not always, as Mazin points out, so don't let your plan backfire. Make sure you really want that new job -- and are ready to quit your current one -- before threatening to quit.

"If you do decide to do it, do it for the right reasons," Mazin says.


Rita said...

These 5 points are soooo true (though No. 3 could be rephrased to "Most Managers don't keep track of your accomplishments"...:-))

No. 2 is sad to know but at least it has taught me to be aware...

As for No. 5...I know a colleague who threatened to quit and the coy begged him to stay and gave him a pay rise...but I'm not sure the coy is happy with him...

As usual, very educative post...

NikkiSab said...

i dont tink my boss has a short term memory, its just dat he is damn MEAN!!!!!!!!!!!!!!!!!!!!!


I know someone that lost their job when they pointed out competitive salary rates. lol!

Onome said...

@rita:gracias sorella