Even people who loathe asking for a raise can ill afford not to amid the highest inflation many have seen in their working lives.
Those who don’t push for more pay risk losing out on what extra money companies are putting toward raises this year. Employers say they set aside an average of 3.9% of total payroll for wage increases in 2022—the most since 2008—according to the Conference Board, a research group.
That isn’t likely to cover workers’ fast-rising costs: The U.S. consumer-price index, a measure of the cost of goods and services across the economy, rose at a 7.9% annual rate in February, the fastest pace in four decades. And many companies aren’t factoring inflation into pay decisions, partly because they worry about reacting too fast and overpaying, says LaCinda Glover, senior principal in consulting firm Mercer LLC’s career practice. In a Mercer survey of more than 300 U.S. companies in February, 66% said they weren’t changing salary budgets because of inflation.
“Giving my boss concrete reasons as to why I feel like I deserved the raise besides just, ‘I want more money,’ definitely helped,” says Janna Ossinsky, a 26-year-old marketing manager in New York, who, since last fall, has gotten two raises. Yet prices for gasoline, cars, housing, and other essential goods have been surging for more than a year, wiping out many of the pandemic-era gains workers have made in pay. In this especially tight labor market, people aren’t just switching jobs: Many say inflation and a surplus of jobs are emboldening them to push for raises harder than they might have in the past, even if those factors aren’t the focus of a pitch for more money.
She says she won the first pay jump—to $77,000 a year from $67,000—when she was promoted in October to manager. Then came her annual performance review in March, and another proposed raise to $80,000. This time she says she countered with a request for $85,000—and got it.
‘Giving my boss concrete reasons as to why I feel like I deserved the raise besides just, ‘I want more money,’ definitely helped.’
Ms. Ossinsky says she had done her homework, explaining she didn’t think the $80,000 was fair considering her skills, additional responsibilities, and the M.B.A. degree she earned last year. She practiced the pitch with her mother and senior colleagues, which she says gave her the confidence to go to the mat for it.
“The more you say it, the more you validate it, the more you get comfortable talking about it,” Ms. Ossinsky says.
Even if inflation is your main reason, though, it is risky to build your argument for a raise around it since rising prices affect nearly everyone, says Alexandra Carter, director of the Mediation Clinic at Columbia Law School and author of “Ask For More.” Instead, “start from a place of demonstrating and forecasting your own value to this company,” she says.
Cringe at the thought of haggling at your pay review? One approach is to let your boss suggest a percentage first. If it is too low, Ms. Carter recommends asking first how the company arrived at that figure.
“Questions are the No. 1 underutilized superpower in negotiations,” she says. Acknowledge the number as a great start, she says, then point out accomplishments that might have been overlooked to justify why you are asking for more.
For people who hate to negotiate, keeping the discussion as objective and fact-based as possible can help make asking for a raise less nerve-racking, says David Buckmaster, a compensation executive, and author. Write down what you plan to say beforehand and be ready to cite market data on salary ranges—though avoid arriving with a manila folder stuffed with printouts—he advises.
Improved salary-tracking websites, plus salary transparency laws in Colorado, New York City, and other states and cities have made it easier to get more accurate compensation data that is harder for employers to dismiss, he points out. “There are a lot better tools now than there were pre-pandemic,” he says.
Justin Smith, a 25-year-old software engineer, says he was initially nervous about asking for a big raise last month when he transitioned from a contract position for an investment bank in Chicago to a full-time staff role. He decided to push for a $100,000 annual salary—up from the $65,000 he earned as a contractor—after researching salaries for similar positions at his firm and at rival companies and factoring in his move to a more expensive rental apartment.
He says he made his case over a Zoom call with his company’s human resources department by describing his contributions to his team and citing email kudos from colleagues.
The company balked at the $100,000 but agreed to $90,000. “I overshot because I knew they would try and wrangle me down,” he says.
His advice for others? Don’t be afraid to ask for more than you think you will end up with. “There’s a lot of wiggle room to negotiate,” he says.