Inflation is biting hard into the pockets of many Americans who are seeing the value of the dollar go down.
Gas, food, and housing prices are spiking, forcing many Americans to borrow just to make ends meet.
On the flip side, the labor market has never been this hot. US job openings are still the record highs. Employees are struggling to hold on to their employers given the record number of people quitting their jobs.
The economic tailwinds suggest that now may be a good time to have that talk with your boss.
Raises are your best defense against higher prices and given the tightness of the labor market, employers may be more receptive than usual to requests for a raise. Here's how to negotiate a pay raise.
Forget government figures which peg inflation at 8.6%.
When you pop the hood, you would see there are a lot of things going on beneath. Your personal inflation level is how much extra you are spending on things. By how much have your bills, groceries, transportation, etc. increased. This will set a benchmark of how much rate you should ask for.
It helps to compare pay ranges for similar roles and find out what others at your level of experience are earning.
Limit your search to your area of residence to get a more realistic figure as price ranges for the same role could differ by city.
Comparing rates helps give you the total picture if you are missing out by taking lower pay or your request for a raise is ridiculous.
If you want an 8% raise, for example, put that figure in the middle and ask for a number between 7% and 10%. Leaving that space open gives you room to make a counterproposal. Don’t lowball yourself, either.
Once you know your numbers, think about how to make your case.
Rising inflation and high employee turnover might be pushing you to ask for more, but your employer already knows this. Rather, resell yourself, let your employer see why you are valuable to the company.
Showcase your biggest wins—new clients, major projects, completion rates, —and prepare to justify your request with a greatest-hits reel of your work.
People have more success in pay negotiations by highlighting their “promotable” work, the efforts for which the company has created performance metrics. The idea is to show what you bring to the table, and what they could lose if you decide to go elsewhere.
Turnover is expensive for companies because of the time and costs it takes to train a new employee.
Changing jobs is another option. Those who changed roles or employers in the past three months saw 6% wage growth, compared with the 4.5% for those who stayed at the same job, according to data from Quartz.
Employers are placing a premium on recruiting new talent—and many are paying for it, too. Big pay jumps are usually associated with new roles or promotions, as those bring expanded scopes of authority or responsibility.
A less subtle raise to get a pay raise is to ask for a promotion, especially if your employer has openings.
If you want to take on new responsibilities and climb your career ladder, this is a logical step to take. But you have to make sure you are worthy before you place your request.
Companies usually have metrics that they use to decide if you are ready for promotion. If you tick off on the list of attributes needed, then by all means ask.
Though raises can be higher when jumping ship, staying with your current employer can make you more valuable in the long run if you can deepen a skill set or learn new ways to advance.
So as awkward as a transparent conversation about pay may initially feel, understanding how your company establishes these benchmarks will benefit you.
Millions of people changed jobs within the last year or so, with one in four people planning to quit their jobs in 2022.
Companies know that employee turnover remains high and want to prevent any further exodus of key employees. However, given the rising costs of things, coupled with chances for career and financial advancement, the current situation presents an opportunity for you to move up the ladder.
Even if your employer isn’t able to match your ask or meet all your demands, taking charge of the conversation still sends an important message to the higher-ups that you’re confident in your worth.
It seems intimidating to negotiate a pay raise, but now may be the best time in years to at least approach the conversation. Don't go in unprepared, do your research, understand what your options are and what similar jobs in the market are worth.
Understanding if your company has a policy when it comes to how people can achieve promotions will educate you on your next steps as well, and will show your employer you mean to grow with the company.
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