Money

Make it easy Why Right Now Is the Best Time to Ask for a Pay Raise

Illustration for article titled Why Right Now Is the Best Time to Ask for a Pay Raise

Photo: smallblackcat (Shutterstock)

With the labor market tilted in favor of job seekers, it’s time to consider asking for a raise. Your employer is much more likely to agree versus earlier in the pandemic, and you can make a convincing case that rising inflation has weakened the purchasing power of your wages. Here are some tips to keep in mind as you negotiate for higher pay—though of course your employer might still say no, so be prepared for that, too.

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How inflation is affecting your salary

Inflation jumped to 0.6% in May from the previous month and 5% year over year—the largest 12-month increase since 2008. Some of the bigger price increases impacted gasoline (56.2%), transportation services (11.2%), apparel (5.6%), and food (2.2%).

While there’s some debate about whether increased inflation will be a long-term phenomenon or is just a temporary pandemic-related blip, these price increases are impacting your budget. If you feel like you’re being squeezed by these unexpected costs, consider that fair game in a discussion about a possible raise.

A tight labor market gives you the upper hand

The labor participation rate has shrunk along with the unemployment rate, which currently sits at 5.8%, which means jobs are definitely available. Of course, unemployment rates are not evenly applied, as the labor crunch is mostly affecting hospitality, transportation, retail, and factory jobs.

If you’re not sure whether your job is in demand, research what your salary could potentially be on the open market, either through networking, by reviewing job postings that include salary information, or by looking up the average salary for your job title on sites like Glassdoor or Indeed (although it’s important to take their estimates with a large grain of salt). If you can build a case that your employer is undervaluing you, it will only help you as you make the case that you deserve a raise.

How to ask for a raise

Once you’ve determined you aren’t being pair a fair rate for your labor, how should you go about asking for more money? First, think carefully about how much you want to ask for, the likelihood of getting a raise, and what you’ll do if they say no. The next step is to ask your boss or HR manager when salary increases are decided at your company (it can be pointless to ask after a payroll budget has been finalized).

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You’ll also want to consider what kind of raise you’re asking for. Raises over 5% are definitely harder to get; the average is around 2-3% per year. But if you haven’t received a raise in years, that will also strengthen your case.

Otherwise, when asking for a larger raise over 5%, you should be prepared to prove you’ve increased the level of responsibility within your role or are underpaid compared to other people in similar roles at other companies. You can also argue your performance has exceeded expectations, using any metrics specific to your job that can help make your case. Market demand and inflation are also a factor, but to significantly boost your salary, it’s often easier to pursue a promotion into a new role. (For more tips on asking for a raise, check out this Lifehacker post).

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A cost-of-living raise should be an easier lift

The average raise used to be around 2-3%, to match average inflation. But with consumer prices jumping higher, asking for 5% to cover inflation is completely reasonable. Plus, many employers won’t give you a raise unless you propose one—and now is a great time to do so.

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Source link: lifehacker.com

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