Inflation and layoffs are at the top of people’s minds this year. The Labor Department reports that over the last 12 months, inflation has increased by 6.4%. Additionally, many big companies such as Goldman Sachs, Amazon and Spotify have announced layoffs, making some workers fear that it may happen to them. The rising costs of living have many people concerned and looking for ways to cut their expenses and increase their income.
On the other hand, people are also taking greater charge of their careers than ever before. They see the need to steer their career where they want it to go versus leaving that up to their employer. This includes asking for things they need, such as a pay raise to offset rising costs due to inflation. But can you really negotiate for a pay raise during a difficult economic climate? Yes, you just have to do it in the right way.
How Do I Ask for More Money Based on Inflation?
It’s important to do your homework before asking for a pay raise based on inflation. Remember that a pay raise based on inflation means asking for an amount that will cover your basic expenses, not for an extravagant increase in your salary.
To calculate how much money you need, find out what the inflation rate in your current location is. What is the average salary for your position in your area, and how does your current salary compare? What has increased the most for you during inflation: groceries, gas, child care, etc?
You can also do a quick search for your job title in your area to see what is current in terms of salary and perks. Write down the numbers, percentage increases and anything else pertinent to your situation.
Then, based on your research, determine how much more money you need to offset rising costs. This should be your minimum ask for a salary increase. When negotiating, it’s OK to provide your boss with a salary range instead of a specific number, just keep in mind that your boss may try to negotiate for the lower number. This means that the lowest number in the range you propose should be your minimum ask based on your calculations. It can be helpful to create a reference sheet with your research and percentages to present to your boss.
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Some industries and organizations incorporate an annual salary adjustment to their payroll to offset the rising cost of living. This is called a cost-of-living adjustment (COLA). This is not required, so not all organizations implement them. If they do, they will generally use the Consumer Price Index determined by the Bureau of Labor Statistics to calculate COLAs.
While COLAs tend to be more common in government jobs and unions, you can do some research to see if this is common in your industry. You should also check with your HR department to see if COLAs are provided at your company, if you qualify, and how your organization handles them.
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Negotiating Cost of Living Increases
When you are preparing to speak with your boss, prepare to negotiate for other perks or adjustments if they can’t give you a raise right now. For example, if they can’t provide you with a salary increase now, can they give you a raise in three to six months? Can they give you an early bonus? Can you work remotely or in a hybrid role to offset your travel expenses? If that’s not possible, can they reimburse you for your travel and/or lunch expenses? Can you negotiate for perks such as child care or better health insurance coverage? Make a list of things you would like to negotiate for.
Again, it will be helpful to do your homework and research what other companies in your industry are doing about inflation and what perks they offer. You can also reach out to your network connections to find out what’s happening in your industry and ideas for what to negotiate for if a salary increase isn’t possible at this time.
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Should I Ask for a Raise During a Recession?
It is OK to ask for a raise during a recession, especially if it’s been a while since your last salary increase. Just be reasonable about your ask and take the financial health of your organization and industry into consideration before doing so.
If it seems like now isn’t the best time, make a note on your calendar to check on the financial health of your organization in a few months. And again, consider other things you can negotiate for that can help offset inflation, such as flextime, remote work or better perks.
While asking for a pay raise amid inflation and layoffs can be awkward, overall, people feel like it is an employee’s market and they are more confident about asking for the things they want than they have been in the past. Additionally, the COVID-19 pandemic and the Great Resignation made many employers more empathetic to employees’ needs. This means that your employer may be more open to negotiations than ever before.
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How to Negotiate a Pay Raise Amid Rising Layoffs and Continued Inflation originally appeared on usnews.com