An inflation pay rise is a topic on many minds recently with the cost of living continuing to climb. But, though you might be entitled to one, you might not know how to go about asking for it.
When is the right time to ask for an inflation pay rise? Should you mention the cost of living? And how much should you be asking for?
“Labour experts would suggest that somewhere between 4.6 – 5.2% would be a starting point if you are looking for a pay rise to reflect the rate of inflation,” says Leah Lambart, a career coach at career guidance company, Relaunch Me.
“It’s important to understand how pay increases are calculated for your organisation and how often you can expect a pay rise. Not all performance reviews are linked to a pay review, so you need to understand this upfront.”
As for whether you should mention inflation in a meeting about your salary with your manager, experts are divided.
“Don’t mention inflation,” Karen Gately, a human resources specialist, told ABC News. “Employees are thinking about their own books and the growing costs of their business.”
Professor John Buchanan, a labour market expert from the University of Sydney’s Health and Work Research Network, on the other hand, told the publication workers should “absolutely” mention inflation.
“Wages should always reflect inflation and aggregate productivity,” he says, adding, though, that you should proceed carefully. “Employers get pretty testy when workers start talking about pay.”
Emily Barnes, a professional mediator, told the publication that while “traditionally” an employee’s financial pressures haven’t been “the company’s problem”, there are some exceptions to that, and it can also help make the conversation less awkward.
“The benefit of an inflation conversation in that negotiation is that it depersonalises it,” she said.
To prepare for the meeting with your manager, Lambart says you should give them the heads up that you’d like to discuss your salary as they may not like being put on the spot.
“I would also recommend having this discussion separate to your pay review, as there may be other factors that need to be considered, not just performance,” Lambart says.
Then, do your research ahead of the meeting, comparing your current salary to the market rate for your position and industry. What are others being paid to do your role elsewhere?
“Speak to a recruiter who specialises in your industry or job function about your market worth,” says Lambart. “Recruiters are speaking to their clients and candidates every day, so they are the ones who have their finger on the pulse when it comes to market worth. They know what others are earning at your level and what clients are willing to pay in the current market.”
If you’re unsuccessful in receiving an inflation pay rise, don’t give up, Lambart says.
“Ask your manager if they would be willing to meet again in six months to review your situation,” she says. “Also, don’t take it personally. It may be a company decision based on how the company is performing and may not relate directly to your performance.”
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