The strained South African economy presents a dilemma for employers: while you, as an employee, may want a salary increase so your income can keep pace with the rising cost of living, your employer must try to retain staff and keep them motivated while simultaneously stay afloat in the adverse economic climate.
Kay Vittee, the chief executive of Kelly recruitment agency, says that, in light of sluggish economic growth, the volatile political environment and the downgrading of the country’s credit rating, “many businesses are cutting back, not only on their workforce but also on the compensation and benefits they are offering staff. Keeping staff morale and productivity high during tough times is a challenge facing many businesses.
“For organisations that may be unable to meet the requirements of staff when it comes to pay negotiations, now is the time to ‘think differently’ when designing a strategy to increase morale, retain talent and keep delivering on business targets,” Vittee says.
She says employers may consider incentive schemes, team-building initiatives, employee discounts or share schemes if their cash flow does not allow for annual increases.
Vittee says there are some points to keep in mind when requesting a pay rise from your employer. The top three factors to consider are:
1. Where do you stand in the market? Going into a salary negotiation, it is important to understand where you stand in terms of experience and earnings relative to the market. It is, therefore, a good idea to assess your salary against the market average. This research should help you to identify a realistic number and keep your expectations in check.
Ask yourself: how well is your current employer paying you? If you are earning at the lower end of the market average, you may be in a better position to negotiate. If you are already being paid well compared with the market average, but want to earn more, it may be time to look into promotions for which you may be suitable in order to take on more responsibility and earn the salary you seek, Vittee says.
2. Are you in a position to negotiate? It is essential to go into a salary negotiation calmly and with a positive mindset, not with the attitude that you are entitled to a higher salary; nor should you adopt a “you versus them” approach, Vittee says.
Adopting a friendly but assertive frame of mind and emphasising that you’d like to reach an agreement that will be to the benefit of both parties sets the right tone and increases the chances of your manager being open to your proposal.
Before you initiate the conversation, you should ask yourself, objectively, whether or not you really deserve what you are asking for and why. Do you add significant value, or go above and beyond the call of duty? Has the feedback you have received from managers hinted at the potential for professional and monetary growth in the near future? If you are a highly valued employee and have consistently performed well, your manager is more likely to be open to negotiate.
3. Is it just about money for right now? Has your employer communicated to staff that the company is tightening its belt or is trying to cut costs? If so, going into a salary negotiation and discussing money alone may be ineffective. In this case, you need to consider your short- and long-term options. Ask yourself whether it would be fair to put additional pressure on the company at this time. Could you wait it out a few months? Is it perhaps better to discuss the future of the organisation and how you can contribute to growing the business, with increased earning potential in future? Would you consider benefits, such as flexi-hours, travel and educational assistance or training opportunities, as part of a better overall package?
Should you instead be looking at opportunities outside the company – are there opportunities in the market that are in line with your salary expectations?
Going into the negotiation armed with the facts, innovative ideas and an understanding of the company’s position in the current economic climate are likely to increase the chances of reaching a mutually beneficial agreement, Vittee says.