Why Is Now the Best Time to Ask for a Pay Raise?
With the job market tilting in favor of job seekers, it’s time to consider asking for a raise. Your employer is far more likely to agree than it was in the earlier phase of the pandemic, and you can conclusively prove that rising inflation has weakened the purchasing power of your wages. Here are some tips to keep in mind when negotiating higher wages – although of course your employer might still say no, so be prepared for that too.
How inflation affects your salary
Inflation jumped to 0.6% in May from the previous month and to 5% on an annualized basis, the largest increase in 12 months since 2008 . A slight increase in prices affected gasoline (56.2%), transport services (11.2%), clothing (5.6%) and food (2.2%).
While there is some debate about whether the rise in inflation will be a long-term phenomenon or just a temporary pandemic-related spike, this price increase is affecting your budget. If you feel uncomfortable with these unexpected costs, consider this fair game when discussing a possible promotion.
A tough job market gives you an edge
The labor force participation rate has dropped along with the unemployment rate, which is currently 5.8%, which means that jobs are definitely available. Of course, unemployment rates are unevenly distributed as labor shortages mainly affect hospitality, transportation, retail and factory jobs. If you are unsure if your job is in demand, find out what your salary could potentially be in the open market, either online, by looking at job postings that include salary information, or by viewing the average salary for your job on sites such as Glassdoor or Indeed (although it’s important to be skeptical about their estimates ). If you can prove that your employer underestimates you, it will only help you if you can prove that you deserve a promotion.
How to ask for a raise
Once you’ve determined that your couple is not doing their job, how should you ask for more money? First, think carefully about how much you want to ask for, the likelihood of getting a promotion, and what you will do if they say no. The next step is to ask your boss or HR manager when your company will decide on a pay rise (it may be pointless to ask after the payroll budget has been finalized).
You will also want to think about what kind of promotion you are asking for. It is definitely more difficult to get a raise above 5%; on average about 2-3% per year. But if you haven’t gotten a promotion in years, that will also strengthen your position.
Otherwise, by requesting a promotion of more than 5%, you must be prepared to prove that you have increased the level of responsibility within your position or that you are underpaid compared to other people in similar positions in other companies. You can also argue that your performance has exceeded expectations by using any performance-specific metrics that can aid your reasoning. Market demand and inflation are also factors, but in order to significantly raise your salary, it is often easier to get a promotion to a new position. (For more tips on how to ask for a raise, see this Lifehacker post .)
Raising the cost of living should be easier
Previously, the average growth was about 2-3% , which corresponds to the average inflation. But with consumer prices soaring higher, requiring 5% to cover inflation makes sense. Plus, many employers won’t give you a raise if you don’t offer it – and now is a great time to do so.