The Economy Is Uncertain. Can You Still Negotiate a Raise?

Layoffs, inflation, a recession on the horizon — no matter what industry you work in, it seems like tough economic times are ahead.

If you’ve been fortunate enough to remain employed, you may be wondering what this means for you. As the financial year draws to a close, it’s reasonable and important to want to talk to your manager about opportunities for growth and advancement. But what if your company has put a freeze on raises, promotions, and hiring? Can you still make a case for a raise in the middle of an economic downturn?

The short answer is: It’s still possible to negotiate a raise even when your company faces reduced staff and shrinking budgets. But it can be tricky. Like most important workplace conversations, asking your manager to increase your pay comes down to preparation and timing. Here is some advice designed to help you get to the answer you want.

CONSIDER YOUR MOTIVATIONS.

Start this process by really digging into your motivations. Ask yourself: Why do I want this raise and is now the right time to ask?

There are many reasons you might consider asking for a raise. For example:

Your office is understaffed, and your manager has shared that they want to retain you. You see an opportunity to leverage this for a raise.

You’ve been exceeding expectations and have had ongoing discussions with your manager about your growth at the company. You may be eager to revisit the conversation so you can get a sense of the timing for next steps.

You recently learned you’re underpaid compared to your colleagues or peers in your industry. You now have a better sense of the market and want to revisit your salary.

Remember, the case for your raise is not related to your personal needs or even about you personally. Asking for a raise should connect to how your work has changed the company for the better and any data you have about the market value for your role.

Regardless of your reasoning, you want to ensure that your motivations align with your company’s current standing and culture before making your ask. If you find that there is a disconnect, you may want to wait a bit longer before asking for a raise, in recognition of what the company is going through. If your reasoning stands, it’s time to do some research.

PREPARE YOUR DATA.

While it’s always important to be prepared with data when advocating for yourself and your career, it’s especially valuable in this situation. If your company is struggling financially, they will likely have a higher level of scrutiny than usual when making financial decisions.

To set yourself up for success in making your case, begin by developing an overview of how your efforts resulted in quantitative or qualitative outcomes for your company. Data isn’t just facts and figures. Also document the positive feedback you’ve received about your work so you can reference it during your conversation and demonstrate how you support your company culture and your colleagues. If you haven’t already started developing a file, it’s not too late. Spend some time writing down your recent career wins and the role you distinctly played in achieving them. Go back through your emails to find notes from senior leaders, colleagues, and clients that reflect your contributions to the company.

If you’re making the case for a salary adjustment or correction, look at websites like Payscale and Salary.com to get an understanding of the market rate for a role like yours. You can also look at recently posted job descriptions — policies in many U.S. states now require companies to publicly post the salaries or salary bands of new roles. It can be helpful to talk to recruiters in your industry to see what they think of your salary as benchmarked against your peers, your specialized skills, and your years of experience.

ASK COMPASSIONATELY AND CLEARLY.

It can be helpful to set aside some dedicated time for the conversation, such as during your regularly scheduled check-in or in a pre-planned meeting. You want to create a space where your manager can focus on your ask and provide their full attention.

Consider how your manager best handles new information. For example, do they like to review on their own before going into a one-on-one discussion? If so, it may be best to email them before your meeting and share your intention to ask for a raise. While managers should always be prepared for these types of conversations, some will appreciate the chance to consider your ask ahead of time. On the other hand, if you think they will shut down the topic (intentionally or unintentionally) if they know you plan to bring it up, it may be best to raise it for the first time in your meeting.

When you do approach the topic, follow these steps:

Acknowledge that this may be a difficult time for the organization.

Share your motivation behind asking for a raise.

Reference specific examples that demonstrate how your work has changed the company for the better and any data you have about the market value for your role.

MAKE YOUR ASK.

Put together, it may sound something like, “I understand there is a lot going on in the world and our company. We have been talking for a while about my performance exceeding expectations and I remain committed to our team and my work. I’d like to discuss my continued growth here, including a pay increase to reflect my performance.”

Remember that you want to be recognized for your contributions to the company. It’s appropriate to show compassion for your manager’s position, but you don’t need to apologize for advocating for yourself.

ANTICIPATE DIFFERENT OUTCOMES — INCLUDING PUSHBACK.

After making your initial ask, there are several possible outcomes.

In the best-case scenario, your manager will be agreeable and talk through potential next steps, which may include additional work and preparation, like presenting your case to senior management for approval. The work you did to prepare for the conversation with your manager can help here as well.

If your raise is lower than you expected, you can discuss this with your manager. This is what negotiating is all about: reaching a compromise together.

In the follow-up conversation with your boss, acknowledge the company’s offer and the difficult financial climate, while also reiterating your past accomplishments and future potential for the company. You might draft a document to share with your boss that includes your recent successes, references consistent strong performance reviews, and a note from a senior leader or board member about your exceptional work, as well as salary data on comparative roles.

Even after all this, your manager may still say it’s not possible for the company to consider your raise at this time. If that happens, ask if they’d be willing to revisit the conversation in three to six months. If they agree, add the date to your calendar so you can remember to follow through. If your manager says no outright, remember that money isn’t the only thing that can be negotiated. You may ask instead for other benefits beyond salary, such as a retention bonus, a more flexible schedule, more vacation time, transportation reimbursements, or professional development funds (such as for a conference or coaching).

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In a business environment rife with budget constraints and layoff fears, asking for additional resources can be complicated. But there is never a “perfect” time to ask for a raise — even when the economy is strong, many things can get in the way. Economic downturn or not, don’t let your fear of hearing “no” be one of those roadblocks.

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Shanna A. Hocking is the founder and CEO of Hocking Leadership, which specializes in leadership development and philanthropic strategy. Previously a senior executive at billion-dollar nonprofit organizations, she is a sought-after coach, consultant, and keynote speaker. She is also the author of One Bold Move a Day: Meaningful Actions to Help Women Fulfill Their Leadership and Career Potential (McGraw Hill, 2022).