How to Negotiate Your Salary to Help With Inflation

with 8.6% Inflation—a 40-year high—many people are feeling the pinch in their wallets as food, gas, and rents rise. If you haven’t received a pay increase in the past year, it may be time to negotiate a higher salary. Inflation is a great negotiating tool because it is an objective benchmark, says Andres Lares, managing partner Shapiro Dialogue Institute, Negotiation consulting firm.

“I am not demanding a pay hike for any arbitrary reason, like ‘I am a very good worker’,” he says. “Your boss may or may not agree. But inflation is well documented. If you made $150,000 last year and are now making $150,000, you’re effectively making less money.” [when it comes to buying power.],

Ben Cooke, CEO of salary negotiation consulting firm Riva, tells his clients, “If you didn’t get an 8% pay raise this year, you got a pay cut.” “Assuming you haven’t performed so poorly that you deserve a pay cut, it’s time to ask for a raise,” he says.

But it is easier said than done for most people. Cook says asking for a raise feels like a confrontation. “Most people don’t like confrontation,” he says. “It’s hard to imagine the cost of not negotiating. It’s not like someone is taking money from you, but it’s money you don’t earn. It’s really the same thing.”

Cook says many people leave jobs unnecessarily because they haven’t given their current employer a chance to improve their compensation. Instead of avoiding uncomfortable conversations, consider these strategies that can make the situation easier.

plan what you’re going to say

The first step is to prepare. It helps to write a script. The goal is not to read it word by word; This is to get the main points firmly in your mind, says Lares.

“Conversations are emotional and can get derailed quickly,” he says. “Manage the emotion by knowing and practicing what you’re going to say. By the time you get to the actual meeting, it’ll feel like you’ve already had the conversation, which makes you a lot more confident. One of the most powerful aspects of conversation is ignoring people.”

Start (But Don’t Finish) With Inflation

Inflation is a great excuse to negotiate. Lares suggests starting by saying, “I want to talk with you about growth. Inflation has happened over the past year.”

But the whole conversation doesn’t have to be purely around inflation: “It still comes down to whether they want to keep you,” Lares says. “While they may be paying you partly for inflation, it is also because they think you are going to be a productive member of the team going forward. Be very clear about it.”

come up with the facts

Keep as many objective points as possible when you ask for a raise. Instead of just blaming inflation, get the real numbers. US Bureau of Labor Statistics Calculator Can show how high prices are affecting your wallet. For example, $150,000 in May 2021 now has a purchasing power of $138,145.

“Tell your boss, ‘I’m essentially making $12,000 less right now than I was last year,'” Lares says. “It shows the other party that you thought about it.”

In addition, come up with data that communicates your value to the company. For example, indicate that you generated $X in new business, had 100% employee retention in your department, gained X number of new customers, or recorded X number of billable hours.

“The more specific you are, the more confidence and conviction you have, which is really important,” Lares says.

seek win/win

Instead of issuing an ultimatum like “Give me 20% or I’m running”, approach your boss with a cooperative attitude.

“You want to be polite and respectful,” Cook says. “Remember, companies don’t negotiate, people do. You’re talking to your boss. Your goal is to get your boss to lobby you. Know why your boss will spend internal political capital to get you more money .

Cook says the conversation should be a joint problem-solving exercise. “Remember, the company isn’t out to get you,” he says. “You share the same end goal. You are coming up with creative solutions that meet your needs and advance their interests. It should be a win/win conversation.”

But be prepared for a “no”

It is possible that your request will be rejected. When someone says “no,” however, it’s important to determine if it’s not for the moment.

“The biggest mistake people make is internalizing the ‘no’,” says Lares. “They see it as a reflection of their perceived value, which may or may not be the case. It could be several other factors at play, such as a temporary growth freeze.

When you hear “no,” the next step is to present the request with the idea that you intend to return it later. Lares suggests saying, “I understand it can’t be done at the moment. But when can we address this again, because it’s really important to me?” Then put that date on your calendar to make sure it doesn’t slip through the cracks.

It might help to clarify the steps for the final “yes”. Cook suggests asking what three jobs you’ll need to do to get a pay raise in the future. “Then start working on those three things,” he says. “You lay the groundwork so that when you have the next review conversation, you’re ready.”

Remember, your pay raise isn’t top of your boss’s mind, Lares says. “When you go into a conversation, you want to be prepared so that you can do it in a safe and powerful way,” he says.

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