Thanks to the new tax plan, now may be the time for workers to negotiate for a bigger paycheck.
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During his State of the Union address, President Donald Trump boasted that the Tax Cuts and Jobs Act has benefited a number of U.S. workers due to the lower corporate tax rate, which was permanently slashed to 21 percent from 35 percent.
It’s unclear whether that will become a broader trend.
Two-thirds of companies say they plan to or have already adjusted employee benefit programs in the wake of the new tax law, according to a recent survey from Willis Towers Watson, a global advisory company. The firm surveyed 333 midsize and large employers in early January.
Another new survey of 504 companies, conducted by global professional services firm Aon, was a little less rosy.
Six in 10 companies are still determining their plans, or are not planning to change employee benefits in the wake of the corporate tax cut, they found. Only 14 percent have already announced or provided additional benefits, and the remaining 26 percent plan to make changes sometime in 2018.
(See chart below for details on how companies considering compensation or benefits changes are thinking of using the money.)
Whether your company has plan in place or not, experts agree that the new tax code creates a good opportunity to approach your boss about a raise or other compensation improvements.
“There probably hasn’t been any better time in the last 25 years or more,” said Ken Abosch, a broad-based compensation leader for Aon.
Here’s how to take advantage:
John Bremen, managing director and leader of Willis Towers Watson’s North America Human Capital & Benefits, said it’s important for employees to understand that not every company is going to benefit from the corporate tax cut. In particular, small businesses with particular structures may have benefited more under the old code.
“There are many companies whose taxes will stay about the same or some might even be going up,” Bremen said.
That’s not to say you can’t ask for a raise or other improvements to your compensation package, but it could limit your chance of success.
Many companies are announcing tax-related improvements publicly, while others are alerting employees on internal channels, Bremen said. Pay attention to make sure you’re not missing opportunities — for example, boosting your 401(k) contribution to take advantage of an improved match, or checking the details to see if you qualify for that pledged bonus.
Awareness of what, if any, benefits your company is already working on can make a conversation with your manager much easier, Bremen said.
With companies announcing planned pay increases, it’s a good time to research the market and see if you’re being fairly compensated.
Andrew Challenger, vice president of outplacement firm Challenger, Gray & Christmas, said employees can use websites including Glassdoor and Payscale to see what other companies are paying for comparable positions. Bring that information to the table with you when you’re negotiating a raise.
“Go to your boss and say, ‘This is what the market is paying, this is what I’m doing for you and these are a list of accomplishments of what I’d like to do going forward,'” Challenger said.
If your company is negatively affected by the Tax Cuts and Jobs Act or just isn’t doling out any pay or benefits improvements, Challenger said now could be a good time to consider looking for a job elsewhere. Job growth and a strong economy benefit job seekers.
“It’s a great time to be negotiating as an employee, so it’s also a good time to be looking for jobs at other companies, right?” Challenger said. “It’s a good time to make moves right now while unemployment is low and while you have a negotiation advantage in the marketplace.”
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Source: CNBC – US News