Five Times You Should Really Avoid Raising
When you get a good job, you like to think that you can relax and just enjoy the stability of a regular paycheck. But, of course, the world does not stand still, and inflation ensures that your salary gets smaller every year. Enter the pay raise—that magical moment when your employer recognizes your hard work and increases your pay or salary, covering the increased cost of living and (hopefully) giving you a little extra money to work with.
While most pay increases are not life-changing (they range from 2% to 3% on average, although some industries can average 5% or higher ), for the most part they are welcome and cause for celebration. You may think that accepting an offered raise will be a no-brainer, but in fact, sometimes there are reasons why you should consider turning down a raise.
When it’s not enough
Sometimes you get a raise for work you’ve already done – it’s a reward and recognition for your past performance, as well as an incentive to keep up the good work. However, sometimes you are offered a promotion along with a change in responsibilities. Maybe it’s a new title and promotion or just a bunch of new things you have to do, but if the promotion is small compared to the new workload, it might be better to sit back . After all, your salary is compensation for your time and effort. If the raise doesn’t adequately compensate you for the extra work, it may be wiser to pass on the promotion and hold off on all that extra work.
When is layoff season?
If you’re offered a promotion in the midst of a period of instability and layoffs at your company, it may not be the automatic win you think it is. It is for this reason that employees with the highest wages tend to be the first targets for layoffs . If your promotion puts you in the crosshairs of budget-cutting bosses, your enjoyment of that extra money may be short-lived. If you think it’s possible, it might be better to stay in the middle of the salary range and live to see another day.
When it’s not about money
Money is great, but it’s not the only form of compensation. If your job offers you more money, take a moment to ask yourself whether you really need more money—or would you be better off doing something else? Every raise offer is essentially the start of a negotiation , so instead of just taking what’s on the table, consider negotiating your benefits . Perhaps you’d rather work from home more often, or have more vacation time, or let the company pay for a training program. If your current salary is more than adequate for your needs, it may be better to improve other aspects of your compensation.
When there is a price
If the increase comes with strings attached, think about those strings before you simply accept the deal. If you are expected to change the terms of your employment (by switching from salary to hourly , or by signing a non-compete or non-disparagement clause , or by agreeing to an unfavorable new contract), refusing the promotion and maintaining your current situation may be smarter.
If the raise is also intended to address a non-monetary problem at work, consider whether you’d rather see the problem actually resolved rather than receive a small increase in your compensation. For example, if you’re forced to work overtime due to a never-ending sense of crisis at the company, getting some help so you can spend less time in the office may be preferable to more money you don’t have time for. have fun anyway.
When does it affect your budget?
If you rely on government programs to survive, a pay increase could be disastrous. This is known as the ” benefit cliff “—the income threshold at which you become ineligible for benefits such as food, housing assistance, or subsidized health care. Getting a small raise that raises your household income just above that threshold will have an overall negative impact on your financial life because you’ll suddenly have to pay significantly more for many other aspects of your life.
As a result, if you rely on any income-linked government benefit to support yourself or your family, you have to carefully crunch the numbers every time you get a raise, and the numbers may tell you that you’re actually better off. do less .