Weaker financial results and uncertainty over the coronavirus pandemic is driving some companies to abolish pay raises for employees next year — or hand out smaller increases than initially planned.
Roughly one in six U.S. workers won’t get a raise in 2021, according to the results of a survey late last month by human-resources consulting firm Willis Towers Watson Plc. About a third of the 705 companies that participated said they have reduced the money budgeted for pay increases for next year.
The pandemic has forced virtually every company to rethink its compensation plans, said Catherine Hartmann, leader of the North America Rewards practice at Willis Towers Watson.
“For many companies, reducing salary budgets and in some cases suspending pay raises was the most viable option” to not only stay competitive but also keep their finances in order, she said.
The surveyed companies, which employ a combined 14.3 million workers, said decisions to reduce or eliminate raises mostly stemmed from expectations that they will post weaker results and broader concerns about costs. Around half of the respondents said they plan on going ahead with their planned raises.
Approaching your boss and asking for more money can seem particularly tricky when times are tough, but that shouldn’t be a deterrent, said Caroline Ceniza-Levine, co-founder of career coaching firm SixFigureStart LLC.
But, she cautioned, do some legwork first. Figure out how your industry, company and department are doing, then look at your own performance in relation to that — basic research that she said many just don’t do.
“Many people don’t have a grasp because they are so focused on their own job,” Ceniza-Levine said. “But when you want to argue for a raise, it is your job.”
The best approach, she said, is to bring a reasoned and honest argument while “not assuming raises are off the table, but also not assuming that you necessarily deserve one.”
Whatever happens, “you still need need to work with these people,” she said. “Keep that in mind.”
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