Inflation is something that’s always been guaranteed. In fact, in years past, you could expect the inflation rate to increase by at least 3% each year. Today, however, inflation is at an all-time high (8.6%), and households everywhere are feeling the pinch. If you’re still earning the same salary as you were last year, you’re earning less money because your purchasing power has diminished significantly.
According to the U.S. Bureau of Labor Statistics CPI Inflation Calculator, $50,000 in January 2020 has the same buying power as $57,527.40 in 2022. That means if you earned that amount in 2020, it will no longer take you as far today. You can’t afford to buy the things you bought last year, and it’s likely to get worse in the coming months. How can you combat this problem? You need a salary increase!
Expectations When It Comes to Pay
When employees get hired, most are paid a starting salary with the expectation of wage growth over time. A recent Robert Half survey of more than 1,000 respondents, revealed that:
- 34% of the respondents had not had a raise in at least a year
- 16% did receive a raise but were highly disappointed with the amount of that increase
- 62% of the respondents plan to ask for a raise within the year to account for either inflation, market rates, or additional job responsibilities
Those that don’t receive a raise are likely to either approach the topic again months down the road, ask for alternative perks, or look for a new job entirely.
Before you set your sights on a new job, you may first want to negotiate a salary. With record-high inflation, now may be the best time to negotiate. That in itself provides logical reasoning for the need for a pay raise. Here are some tips for negotiating a salary.
Know What You’re Going To Say To Your Manager
Never walk into a negotiation without a plan. Before you start the conversation, script out what you’re going to say. No, you won’t be reading the script, but if you practice the script enough, you’ll have a better sense of what to say as you’re negotiating your salary. Defending a salary increase can get emotional and can easily take a turn for the worst. It’s up to you to keep the conversation on track, and the best way to do that is to manage those emotions and ensure your major points get heard.
Inflation is a great reason to negotiate a raise, so start the conversation by talking about the impact inflation has had on your life. While inflation is a great way to start it off, don’t look for the discussion to stay there. Ultimately, it will all come back to you as an employee and the value you bring to the work you do.
Make Sure the Timing Is Right
As they say, ‘timing is everything,’ and that also applies when you’re negotiating a salary. If things are significantly busier at the office, or a little chaotic, it may not be a good time to have a conversation with your boss about money. You also don’t want to bring up this discussion after a ‘poor performing’ quarter. Trust me, at that time, the boss isn’t looking to give up more money because they’re already jumping through hoops trying to find ways to make more money.
However, if you find that a quarter was significantly good for the company, that may be a good time to approach the subject of your salary. With revenue looking positive, and your good reasoning to back your need for a raise, it could prove beneficial for you.
Make a Pitch for Everyone To Win
Remember, that at the end of the day, whatever is agreed upon should be a win for both parties. If you’re contributing significantly to the revenue of the company, they value that contribution. Without it, they would not be performing as well as they are. Remind them of that.
One of the things I valued as a government employee was the opportunity to have my employee performance reviews. That was my time to shine, to share what I’ve accomplished and how it positively impacted the agency. As a result of that review, I was able to inquire about awards or a potential increase in pay. Know your worth and the value you bring to the company. When employees are happy, they’re motivated to do even more. When that happens, the company wins. That’s a win-win for everyone.
Perform Due Diligence
Whenever you’re coming to the table to negotiate, due diligence is a must. Never show up unprepared to back your claims without supporting documentation. Do your own job search in similar markets to see what other hires are earning. According to a recent Robert Half survey, more and more companies are doing their best to address pay gaps among their employees, particularly with new hires. It’s a good idea to research what other companies are paying for the same type of work to help make your case. Some places to start are the Robert Half Salary Guide, Payscale, and Glassdoor. This is a particularly strategic move to make when you get promoted. Promotion time is a good time to bolster your value and argue for a higher salary increase.
Be Receptive to Options Other Than A Pay Raise
If the pay raise is respected but it’s something that’s just not doable at the moment, be ready to discuss perks. Perks can be allowing you some or more work from home days or more flexibility in your schedule. You might even be able to discuss receiving a bonus. While inflation may start the discussion, remember that the end result is more money in your pocket. Less commuting time to the office and any additional compensation in your pocket could help accomplish that result.
The Bottom Line
Everyone, regardless of the industry they work in, expects to be compensated for the value they bring to any job. Inflation is an expectancy, and raises should also happen over time. If they don’t, then you need to ask for one. When you do, come prepared with the facts. But even when you do that, there’s no guarantee that a raise is possible at the time, so be open to alternative options that could still benefit you.
Over time, if you repeatedly receive ‘no’ as a response without a commitment to change, it may be time to start considering work opportunities elsewhere.
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