Can't Get A Raise? Negotiate Your Benefits

By Bobbi Dempsey | June 18, 2010 AAA
Can't Get A Raise? Negotiate Your Benefits

If you didn't get a raise this year - and don't see a chance of getting one anytime soon - you are not alone. These days, you may consider yourself lucky to still have a job. But just because your boss can't boost your paycheck doesn't mean you're completely out of luck. For employees who can't get a raise in their salary, a "benefits raise" - getting the employer to increase/enhance current benefits or add new ones - may be the next best thing. Here are a few tips on persuading your employer to consider a benefits raise.

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Come Up with a Win-Win Scenario
"The best approach would be a benefit/incentive program that is going to produce more benefits for the employer than it costs," says Robert F. Fallis of Fallis & Associates, an organizational psychological consulting firm in Seattle, Washington.

Fallis suggests something along the lines of the Scanlon plan, in which employees come up with creative solutions to improve the ratio of sales vs. labor costs. Employees then get a pre-negotiated percentage of the resulting savings - unlike a standard profit sharing arrangement where much of the profits are often diverted to other things before the employees ever get their share.

Look for Any Upside
An example could include any potential tax savings for your company resulting from an increase in your benefits. (In the wake of the worst recession in a generation, many employee benefits have landed on cutting block. Find out more in 6 Dying Job Perks.)

"If you are requesting additional funds contributed by your employer into your Health Savings Account, that contribution is deductible for tax purposes, up to annual IRS limits," says Joel J. Ohman, a certified financial planner from Tampa, Florida. "Talking up potential tax savings is a great selling point for many increased employee benefits."

Realize Some Things Are Off-Limits
To a certain extent, your employer's hands may be tied when it comes to some benefits.

"Companies with fully-insured benefits plans don't have the luxury to offer you a 'better' health/dental/vision plan than what they offer everyone else, and employers must be careful about what 'extras' they offer so as not to be discriminatory in their benefits offerings," says Roxann Kerr Lindsey, vice president of CBIZ Benefits & Insurance Services of Kansas City, Kansas.

If you get the sense there's no wiggle room in this area, it's best not to waste your time and instead focus on other areas. (CEOs get many perks that the workers beneath them could only dream of. See some common CEO benefits in CEO Benefits You Wish You Had.)

Be Creative
If you do run into a dead end with the obvious benefits, think of other strategies. For example: "if you are a new employee and there is a waiting period for health benefits, maybe the employer could pay the COBRA premiums for your old plan until the waiting period expires," Lindsey suggests.

Focus on Work/Life Benefits
This is an area where employers are often willing to consider giving some extras. Flex time, for example, may be an option. (We look at how these top-paying companies stack up in terms of benefits, work environment and incentive plans in Beyond Money: How 10 Top-Paying Companies Stack Up.)

"Perhaps you could work one extra hour each day Monday through Thursday and leave at noon on Fridays during the summer," Lindsey suggests. As long as you still get your work done, this doesn't cost your employer anything extra. Along the same lines, Lindsey suggests requesting "a paid leave of absence or a mini sabbatical to work in some sort of public service or charitable endeavor."

Think Small
If your employer resists any increase in major benefits, think of small things that could still make your life better. Some of Lindsey's suggestions: reimbursement for parking fees, ability to retain the frequent flier miles earned for company travel or a health club membership. Another idea: see if your employer will cover the cost of an out-of-town seminar or continuing education program. Not only do you get a little getaway, but "this is deductible for the employer, plus they benefit from your increased knowledge."

The Bottom Line
Your salary may be in a holding pattern, but by using your imagination and your best negotiation skills, you may still be able to get a few extra perks that will help make your life a little easier.

Catch up on the latest financial news in Water Cooler Finance: The iPhone Launch, Buffett's Lunch And BP's Lashing.

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