- Inflation has hit a 41-year high and many Americans fear price increases will outpace wage growth.
- Common knowledge says to ask for a raise because you deserve it, not because you need it.
- But experts say there is a way to factor in inflation when making the case for a pay rise. Here’s how.
When asking for a raise, everyone knows that you should focus on why you deserve one, not why you need one.
But what if your biggest argument is that you need it?
Inflation has reached its highest level in 41 years and many Americans fear that wage growth will keep pace with soaring prices. In a recent survey of more than 1,000 American workers by recruiting firm Robert Half, nearly 62% of respondents said they planned to ask for a raise this year, the main reason being to adapt to the higher cost of living.
Fortunately, there is a way to build inflation into your request for a raise. The labor market is still hot, many companies are focusing on retention to prevent employees from walking.
Here are 6 steps to get an inflation-based raise:
Find out your employer’s position on taking inflation into account in raises
Some employers may already factor in cost-of-living increases when granting raises. If you’re not sure, you can talk about it in your annual review or after you successfully complete a project, says Tori Dunlap, personal finance expert and founder of Her First 100K, a financial education platform for women in Generation Y.
Dunlap suggests saying, “I really enjoyed being part of this team and I’m excited about my future here. I was wondering what is considered when giving raises. In addition to my overall performance, will the cost of inflation also be taken into account?
Perform calculations
If your employer does not automatically take inflation into account, check the Consumer Price Index to find the inflation rate for the past 12 months. Take that number as a decimal, add 1, and multiply that by your current salary to figure out how much to ask for, says professional coach Brooke McCord of coaching firm Ama La Vida.
Ask to discuss your salary
For many people, broaching the subject is the hardest part.
Dunlap recommends sending an email along these lines: “I would like to find a time when we can discuss my current salary. After doing some market research and evaluating how inflation has affected my cost of life, I think a raise in my salary is appropriate. I really enjoy this role and this team and I see myself here for many years to come, so I would like to find a number that makes us both happy. days and times would work best for you?
If you have a review around the corner, you can link your request to that.
McCord suggests, “I know my performance review is coming up and I’m looking forward to it. With my recent [achievement] and inflation, I’d like to discuss my compensation in addition to digging into what I’m doing well, where I can continue to improve and how I can continue to grow within this team.”
Do your research
Use sites like Payscale and Glassdoor to compare your salary to your industry peers. Consider your geographic region and specialization, says Josh Doody, founder of Fearless Salary Negotiation and a salary negotiation coach for senior software engineers and engineering managers.
Compile achievements, accolades, and positive performance reviews showing how you specifically succeeded. Focus on real-world metrics and examples, and focus on how you’ve improved.
“The conversation you’re having is, ‘My salary was set in the past, and now I feel like my salary doesn’t currently reflect the work that I do,'” Doody said. “You want to identify, what are the things you’ve done that you’re not currently being paid for based on how you’ve agreed to be paid for your work, and what is the value of those things? Of that way, what you’re doing is saying, “Here’s my target salary and why I chose it.
Focus on your value
Although inflation is part of the discussion, your achievements should be the cornerstone of your negotiations.
“You always want to bring it back to the value you’re adding to the business,” McCord said. “Focus on how you helped the team and the company achieve their goals.”
Dunlap advises you to provide concrete examples of your contributions before diving into inflation. At this point, try saying, “I’d like to see what else I can accomplish in this role, but my current salary doesn’t match inflation levels in this field. My cost of living has increased by X% over the past 6 years. month, so I would like to see my salary increase accordingly so that I can continue to grow and achieve new goals with our company.”
Monitoring
If you get a “no”, it doesn’t have to be the end of the road.
At this point, Dunlap suggests saying, “Thank you for having this conversation with me. I’d like to schedule a time to revisit this conversation. Would the end of next term be a possibility? able to give me feedback so that I can understand what you would like to see from me at this time in order to get the salary I want?”
Remember that salary is only part of compensation, says McCord.
“If they deny your request for a raise, ask about PTO raises, flex hours, remote work, bonuses, equity,” she says.
If you are consistently denied a raise, it may be worth looking for work elsewhere. “If they don’t want to budge and acknowledge your hard work, that could be a sign that it’s time to move on,” McCord said.
