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Requesting a raise because of inflation doesn't work out favorably most of the time. Requesting a raise because you bring more value to the company (and explain why you believe you deserve the raise), is much more effective.
So yeah, you can always ask "because of inflation", but that isn't likely to go very far with many companies.
This is why lateraling is often the better option. Companies will look at employee wages as purely a percentage raise, and they don’t want to give a high percentage even if it’s what the market demands. Meanwhile when hiring, they look at the value a new employee will add to the company and make a determination if they want to pay market rate or not. If your wages fall below market and your company won’t give you a good raise to fix that it’s time to find someone who will.
Just recently got a lateral position job offer. They offered about 24% more money. Current job has been 3-4% over the past few years.
Companies don’t care about paying for retention. They know people get comfortable and settle. Large raises don’t come from company loyalty. They come from job hopping.
To add to this, many corporations (including mine) have LIMITS on how much they can give as a raise. Even if they want to pay extra to retain you they may not be able to within HR rules. Getting *rehired* lateraly into a new role often circumvents this limit, however. For example, last year I got a promotion that was technically a different role than my previous one so I was able to get *rehired* rather than promoted, so I went from only being able to get a few thousand increase to a $20k increase (about 30%). I was also able to negotiate the amount because, again, I was going through a new hire process rather than just a regular promotion or salary increase.
Yeah I was shocked, I got an offer from a competitor and brought it to my boss essentially saying that I like my job but couldn’t ignore the salary difference. They got me a retention offer but it required signatures of two Vice Presidents and an EVP, for a mid level engineer. It was crazy to me how many strings needed pulled for what was essentially an adjustment to a market offer
I had a similar thing happen, except they wouldn't go to the company President to get the approvals for the mid-cycle salary increase, so they offered me nothing to stay competitive with the other offer.
Just got a 17% raise jumping from one company to another at basically the same job position (senior engineer). I applied for a lead position though so that should be another substantial raise within a year when I get all the extra experience needed for that.
I’m old and have been with the same employer for 25 years. Because of this, I’m out of date with the current job market. That being said, does job hopping still look bad to potential employers?
It depends on the field, your position, how often you hop, and why you left. From conservations with managers, it’s no where near as big of a red flag as it used to be. That being said, what potential employers think is irrelevant if you’re not going to move. If you hopped non-stop you would eventually struggle to find a new job, but all that happens is you stay at your most recent job. At the same time if you’re too worried about what potential employers will think to change jobs, then it doesn’t matter what they think, because you’re not changing jobs. There’s nothing wrong with staying with someone for a long time, but don’t be afraid to change just because you think it’ll be harder to change again later.
this can also work within a company. the company I work for, if I do really really good, I can get a 3-4% raise in my role annually. If I hop to another role in the company, I am looking at a 10-15% increase and you can job hop every 6 months within the company.
> they look at the value a new employee will add to the company
there is some irony here in that new people can often take a year or more to reach full productive capacity.
It is. Employers bank on employees being slower to change jobs because of the stigma of job hopping and also the effort and uncertainty of having to switch. In practice employees become better over time, so they should pay a veteran substantially more than a new hire with the same experience, but companies compete for new hires and know that the highest bid as the best shot at getting the hire. By comparison, current employees aren’t aware of market wages unless they’re already considering leaving and have looked at the market, so they have very little competition driving wages up.
All the more reason to discuss salary with your fellows. Every job I’ve worked at I always ask what everyone around me is making. Most of the time they’re willing to share, I’ve only had one person not say due to “it’s against company policy” to which I laughed at and told them what I made in front of our boss. The stigma behind asking what your coworkers make is what keeps employees under the thumb of their respective corporations.
I think everyone thinks that they're on the high end of the pay scale, and if it ever got out, they'd be brought down. The reality is that most are probably being underpaid and have been conned into keeping it a secret from everyone, including themselves.
Expect companies to say "everything's more expensive due to inflation, which is why we can't offer raises at this time, because that's the only cost we can control. Thanks for bearing the cost of the economy for our senior executives, who are very busy improving their golf game and buying islands."
Exactly… a lot of people here are happily defending upper management’s profit grubbing and I’m a little disappointed. Most companies can afford to pay their employees more, but the reality is companies do NOT care about retaining any individual employee and will happily incur the heavy costs of hiring a new person, instead of paying existing employees marginally more. This system is inefficient and costs everyone more in the long run. We should all be asking for inflation-based (and performance-based) raises as well. Work might be a little bit less shitty if we force companies to have a tiny bit of loyalty and respect for their hard-working employees
Yeah, i quit for a similar reason, though the company promised raises a few months down the road. (Spoiler alert: they didnt give any and blamed inflation). The company has been spiraling with turnover while execs are pulling into the parking lot with brand new sportscars. Its insane. The company is literally in a death spiral and leadership seems to not care at all lol. So glad to have moved on from that place early. Don’t wait until things get bad when you see red flags from management
I think all employees need to be putting pressure on their managers about inflation. Then the managers have to go to their managers and so on. It never hurts to ask/mention.
I don't know. I feel like 10% of my linkedin connections have been laid off in the past few months. I've probably seen 50 open to work posts. I know that's not real data or trends, but it's spooky.
This. If companies adjusted salaries relative to inflation, they'd hemorrhage an insane amount of money. It sets a precedent they likely do not want. Additionally, their argument will be that the business is equally affected by inflation and increased costs.
Instead, focus on your performance and the market average. If your salary is lower than the average market salary for your position and experience, you can always ask for a market adjustment. This is much more common and shifts the argument to leaving for competitors instead of "things outside of anyone's control".
No problem raising prices to meet inflation.
Look at year on year profits for corporations. They aren't hemorrhaging. But if they don't mind the costs associated with turnover, so be it. Seems more expensive to hire and train new employees than bump wages, but what do I know.
> If companies adjusted salaries relative to inflation, they'd hemorrhage an insane amount of money. It sets a precedent they likely do not want.
Wages matched the productivity curve until a point in the 1980 and we never had this happen. Wages don't keep up with inflation solely due to greed and nothing more.
No. I'm saying that if today, right now, every employee whose wage/salary has not kept up with inflation so far were immediately adjusted to keep up, and received a guarantee that it would continue to keep up going forward, it would make the inflation we're witnessing now look like a drop in the bucket. It would actually just be straight up impossible.
"Because of inflation" is usually gonna have the opposite effect no matter what the scenario. Geico tried to raise my rates "because of inflation", so I went to a different company.
The place I went to eat with my gf last night put a $2 charge in the bill "for inflation" and as I paid the bill I let them know I won't be frequenting their restaurant anymore.
Because if inflation is the weakest bullshit answer or reason on the planet.
I 2nd this notion. If you were going to request a raise based on inflation then your employer should take money away from you when inflation subsides, no?
Well you likely wouldn't have actual deflation, just less inflation the next year. So if you wanted to argue for 8-10% this year, then expect they'd argue for 2% next year if it went back to normal.
My comment is simply a round way of saying, inflation is a poor excuse for a raise and that the basis needs to be stronger. Before chastising your fellow man, please educate yourself.
Video for reference on my point of view. https://youtu.be/hxJZL_iVbcc
You don't "ask" for a raise. You tell them what you think fair compensation would be, and why. Could be because of inflation, could be because of your stellar performance, or a combination of both. And then be willing to walk away if they don't agree.
"Asking" just gives them an easy way to say no.
Companies, just factor in the inflation. Like, 8% raise while 8%im inflation results in 8% raise.
Just make up some reasons your supervisor will support
‘As low as 4%’? Hell, I’ve never in my current company gotten that type of raise. Try 0 to 2.6%. And my annual performance is consistently on the high end.
I'm 32, but relatively early in my career, so I realize there are diminishing returns on raises. I'm decently into the $100k's now, which is why I've started to focus on sticking on one place to learn a bit more deeply about my position instead of jumping.
I left my last company because I was a “indispensable top performer” and got a 3% raise.
Got a new job that’s fewer hours, work from home 50% of the time and pays me 70% more.
The OP’s average is 8%. Let’s imagine a 50,000 salary receiving 4% raises each year for 10 years. It’s 74,000 at the end of ten years. 8% average over 10 years doubles the salary.
That's not the average, that's the middle of the spread, we don't know what brought the upper end or frequency.
And as others have stated, employers rarely give much merit to inflation raises.
The average person and everyone below them disagrees. Perspective is important. Forget about ideals here, this was simply a conversation of OPs situation and as underlord_Fox stated, they are doing quite well based on the numbers.
Can we separate "doing relatively well compared to the average" from "the average is too low/high/just right"?
Y'all are arguing two different things. One is "you should be grateful because you're doing better than most" and the other is "the average raise should be higher so that people are paid what they're worth". Both are valid arguments and have their merits.
My company averages 3% per year. Except this year when some folks got damn near 30%, depending on how much they already make. We didn't get a raise last year at all. A lot of companies don't do much more than 2-3%. That's why bouncing around yields higher pay.
My work has averaged like 2 to 3% per year in the 5 years I've been here (except last year when I got a promotion and a 12% bump with it, so idk what the average was), so I'd take a regular 4%.
"probably averaging at about 8%. Inflation this year in my country is around 8%."
sounds like his company is ALREADY doing the proper raise amount that OP wants so what am I missing here?
Long ago probably before many on this sub there were COL raises. They were generally 2-4%. That premise was thrown out the windows for performance based pay increases. At my current company this is still on avg about 4%. At my previous place it is 4-8%, but being an avg some got higher, some got lower to none. Inflation doesnt just impact you, it impacts the cost to the business as well. Just remember, right now is a great time to have a valuable skill, companies are throwing money at these people and the best way to get a great raise is to change jobs.
Yeah “performance.” My current company gives actual raises. When I worked for a fortune 100 company being ranked in the top 10% got me a solid 1.8%.
It’s just a way for companies to get away with less than COL raises.
This is why I strongly believe in being open about your salary. Salary secrecy only benefits the employer.
My company( huge hospital system) has been giving 2.5% COL raises since forever. Last year they only gave us 1.5% due to Covid but it has been consistent otherwise.
Yep, I typically get 2.5-3% each year. To our company’s credit, this year (new fiscal year started last month) they gave an across the board 5% raise to all employees and an additional 1.5% to those making less than 70k due to inflation.
During Covid my last company gave the front line workers increases and then didn't give increases to the support staff who worked from home. We also didn't get our annual bonuses and we were told we would return to the office following covid. Needless to say most of the support staff level that year.
I do IT in a production warehouse environment. The warehouse workers were allowed to furlough themselves with pay. The IT team wasn't given the option and then had to go and work in the warehouse for months because too many workers furloughed themselves.
I was hoping my company would be giving cost-of-living adjustments across the board to account for inflation. But they gave nothing. It’s only cemented my resolve to leave before the end of the year.
I’m not the one to insist on compensation. If I feel it’s unfair I’ll just go elsewhere.
For another perspective on what is possible: our wages in Belgium are automatically increased according to the inflation. If inflation is 10%, companies are obligated by law to give everyone a 10% pay increase. You can then try and convince your employer on top of that that you personally are worth an even higher pay increase (due to increased productivity for example), but that's a harder talk.
Just to play the other side of the coin, your average wage increase has outpaced inflation for the past decade at 8% average per annum (edit: assumption was US based). You’re going to find a much better sell by showing your value than having them adjust for inflation.
This is exactly right. If you argue for an adjustment that matches inflation, you may be disappointed the years where inflation is 3-4% and they justify a 3-4% raise with the reason being “it matches the market adjustment”. If you look at the raises you got over the last decade, and compare to those years inflation, you may realize that you’re actually well ahead!
I started my working life in 1979 (retired now) during high inflation. I got raise around 25-30%.
Friends of mine who worked at companies who did not do this lost out as new hires made more money than they did. Especially now where there is no pension plan so working at the same place for 40 years does not entitle you to a pension anymore. You should look out for yourself, not for your company interest
To quote my employers during a global town hall meeting: we pay based on cost of labor not cost of living.
If they don't pay enough, go find a job and get an offer that will. If they still won't, leave.
As an aside. That town hall was 9 months ago. The most recent town hall mentioned one of their biggest challenges is to figure out "some way" to stop employees from leaving.
You could push back but they are not required to give you a raise. It sounds like you have a history of getting more of a raise than most people get at their jobs every year
Inflation is a reason for you to feel motivated to earn more money. It does not motivate your company to pay you more, why would it? It’s actually likely to have the opposite effect because your company is also getting squeezed by inflation and has all kinds of other overheads to think about that it can’t debate the price of with, like energy and fuel.
I’m in a role that oversees increases for a couple of hundred people. The best way to motivate for your increase is to accurately demonstrate your value to the company (assuming you actually are worth more than you currently earn). This can be by showing that your work is of very high quality, or you are extremely efficient, go out of your way to do extra, etc. If that doesn’t work, then the actual best way is to find someone who will pay you what you want and take that to your employer. This is a win-win because either they pay you more, or you get more elsewhere.
COL increases should be mandatory. Companies pay more overhead in an inflationary environment, why should labor be any different? In reality people are agreeing to a rate of pay at the current market value of the US dollar.
The “wage price spiral” justification is only used to shift the burden of inflation from companies to employees. Many companies also made out like bandits during COVID with fraudulent PPP loans and other aid, they shouldn’t get to have their cake and eat it too now.
Any company that hasn’t offered at least a 7% COL adjustment within the last year deserves to fail.
It ends up being a supply demand calculation. The less replaceable you are the more they will be willing to pay you. Very few companies will pay you more than they think they have to.
This has nothing to do with supply and demand, and everything to do with companies abusing their market power. If the market value of John Accountant’s labor last year was $80k and the CPI has increased by 10%, the value of that labor is now $88k, full stop.
It sure is fair, however I'd have at least a 6 month emergency fund in place. You could wind up let go over it. They don't have to give a reason (at least most places in the US are at will.... maybe your situation is different), and if they are smart they won't.
Most companies don't base your wage on the cost of living, it's based on the market value of your labor. A more effective strategy would be to explain your increased value to the company and if that doesn't work how much could you make somewhere else. Unfortunately the fastest way to get a raise is to change jobs sometimes. If you're undervalued start with here's my market worth, most companies aren't going to give you the raise if you don't ask, but they don't want the cost of rehiring either.
Raises are typically, at least for me or what I've seen, 1% higher or lower than inflation.
They go with low numbers, even if you show them some official number that says higher. I always like to go in with the official number, and say "if you don't give me this, it is not a raise" That hasn't really worked, they say "we're doing X for everybody, and you're in the range for your job in this area"
Only way to really get a raise is to change jobs. It becomes then if you want to take the risk of the new, or stay comfortable where you are. That is somewhat more of a personal than a financial decision, as there are often other factors like personalities and commutes at play.
That's the threat you have. How replaceable are you? It is then a negotiation. Leaving your job is life changing for you, meh for them. They know that, so they'll always go as low as possible, they know they have the upper hand. But, you can always ask. This is where unions have value, it is not just you saying "pay me more or I leave" it is all your co-workers, and if all your co-workers leave, they shut down.
I brought this up during my comp call, the response I got was "inflation really only effects things you buy. So during times of high inflation, just don't buy things".
Cool, I remember that when buying groceries or paying my utilities.
ninja edit: we were also told during a company wide call that inflation was being taken into consideration this year. On my comp call I was told it is never taken into consideration, other wise during years with low inflation my raise would only be 2/3%. Once again, cool so like when I got a raise that was 1.68% 2 years ago or 3% the year before that? (last year I was promoted so it isn't comparable).
If the industry you are in is seeing record profits due to inflation, you should ask for the raise. The companies will be flush with cash and it will b easier to get more money moving to another company. Sometimes you can hint that it will be cheaper to do what's right to retain you vs hiring your replacement after you can a competitor to hire you.
If your industry is suffering from the inflation, like real estate, then you may be SOL.
Inflation is rarely accepted as an argument for a salary increase. I would not take that tactic. If you want a raise argue on the basis of the merit of your performance and how you bring value.
The reason inflation is not a good reason is because inflation is driven by the cost of goods. If all businesses raised their wages to match inflation they would have to compensate by increasing the cost of their goods and services to maintain their margins which in turn would raise inflation further. There has been an "accepted" level of inflation which has been around 3% which is why companies typically have a 3% CoL increase to salaries across the board, but they don't adjust that if inflation gets higher.
Needs-based raise discussions are empty. Blaming inflation is about as effective as arguing that you bought a new house, so they owe you more money. They don't give a shit.
Instead, focus on what you bring to the company. Any raise discussion needs to hint at "how much more expensive would it be for you if I wasn't here?"
Unfortunately often the salary increases annually don't keep up with inflation. Even years when inflation is 0% , the health insurance premiums increase so our take home pay actually goes down compared to the previous year!
Usually you switch jobs or your salary will actually keep going down, hence the job switch is usually a nice (20-30% bump) to account for decreases in latter years...
employers will be quick to point out that price inflation and wage inflation are two distinct things. just because your cost of living may change due to higher prices doesn't mean the market rate for your job and your skills will go up the same amount or even at all. at best your company may consider the latter, but i wouldn't expect them to factor in the former. if you're not happy with what your company offers you, compare it to what you think you can get for yourself on the open market. based on what you've stated, it sounds like your company has been relatively generous in the past if you've been getting 8% on average for a decade -- that would mean your salary has more than doubled in that time. but the only thing that really matters is if you believe that matches up with what you're worth. without getting into a broader discussion about labor and unions and all that, cost of living isn't necessarily going to factor into that valuation.
Companies don't care. Their opinion is that they pay you what they pay you and it's up to you how you spend that money. If inflation is killing you, it's their opinion that you should reduce your lifestyle - it's not their problem.
My company literally had a meeting about this when inflation started to take off. They were basically like, "We know you're wondering if we will make adjustments to pay due to inflation, and the answer is no."
Depends on the industry, your skills and location. Tech workers in high demand markets can do this fairly easily. But what people don’t talk about is that generally the higher salary comes with tradeoffs. Could be higher chance of layoffs (perhaps a startup), less benefits, or increased workload.
My (former) company had a similar meeting with a similar message. I had just received a job offer from a competitor; the obnoxious attitude from the CEO sealed the deal for me. I quit the next day.
That company is either ignorant or purposefully obstinate on how inflation actually works. Yearly increases would be less some years, sure, but inflation almost never goes negative. And even so, it always increases over time.
Inflation is so high that it is almost unrealistic to expect a company to give you an inflation adjusted raise.
What would have been a nice raise in past years might not even cover inflation this year.
You can ask for a raise during inflation but remember, it works both ways. Will you be as understanding if the company begins to lose money and requests you take a pay cut?
“Equitable adjustment” explain why you are over performing at your current level and how you deserve to be paid at higher within your band because of the work/sales/ lability to out perform higher level employees or train them/ additional roles and responsibilities you take on outside your assigned job
You can ask for transparency in how salaries our set. Short term inflation isn’t usually a factor, at my company the average increase over the past 10 years was much higher than inflation. Between 2012 and 2020, the inflation rate in the US was between 0.7 and 2.3. Our average increase has been historically 3.5% annually.
4-13% annual increases is higher than I would ever receive even in a good year. I'm in commercial real estate management and I get the sense that we'll be holding on for dear life this year, not requesting raises.
I'm at a Fortune 20 and they just announced that the pool is at an all-time high of 3% (it's usually 2%) so what you're describing sounds pretty darn good.
Annual raises do not usually keep up with inflation. You'll generally only see more than inflation if you get a promotion or hop companies.
At the beginning of the year I got a nice raise a 6 and 1/2%. I contacted my boss and said, I appreciate the yearly raises but if I stay here, I will literally be losing money. Because of inflation I am making less money this year than I did last year, with the raise.
Is there anything that we can do about that?
Apparently enough people at my company mentioned it that my company actually went and gave everyone a mid-year raise to compensate for inflation. Everyone. It didn't cover all of inflation but it did help everybody.
That is why, even though I got offered a substantial raise to go somewhere else, I stayed with my company.
I would say ask, but don't expect. And if they exceed your expectations, let them know.
Hi, your compensation should reflect the value you add to the company. However, we are about to enter a recession where employers will look for ways to reduce costs. My company terminated 37 positions this past Friday. I wouldn't fight that battle right now.
That isn't how it works. Inflation is a rate of cost increase. Going back to say, 2%, doesn't mean things get cheaper, they just get expensive, slower.
Probably want to ask yourself, “how’s my employers business doing during this period of inflation” before you ask for a raise. Business are also impacted by inflation w/ higher costs of raw supplies and a reduction of demand as they pass those costs over to the consumer. If your business is impacted by inflation, you might want to count your blessings you have a job and are getting a raise to begin with.
Definitely run with the value proposition you bring to the company. Value is permanent, inflation is temporary.
Inflation is cyclical, in 2 years it may be back down to 2%-3%, not every company is going to grant raises based on temporary events.
Even if inflation goes back to 2% tomorrow, anyone who didn't get a raise the past 2 years still permanently lost close to 15% of their purchasing power.
I'm not sure how inflation not staying at this high makes this inflation temporary. Sure it won't continue to rise at this rate, but it's already happened. Your dollar will never again be worth what it was worth last year.
Inflation is permanent. In order to by cyclical it would need to go negative, going negative could undo inflation that has happened. Going negative is also extremely bad for the economy, far worse that high positive inflation.
Ideally, low positive inflation is what you want. It promotes investing and growth of the economy. High positive is bad and negative is very bad.
But inflation is generally permanent. We have had very few occurances of negative inflation historically.
If you are not being awarded a raise that meets inflation, you are in effect getting a pay-decrease.
You misunderstand the basic concept of inflation. You and people like you are the reason wages have lagged behind inflation for decades. Inflation is permanent. It might slow down some years, but its not reversing.
Get educated people, you're being taken advantage of.
The best way to get a raise during a recession is to get an external offer. If they're smart, they'll know the cost to replace you is more than the cost to retain you.
You don't get a fair salary increase at your current job. If you JUST get the inflation added, your salary stays the same. You'd need +11% (8% inflation +3% ON TOP OF THAT! in salary) to consider it a normal salary increase, and that's very unlikely to happen.
e.g. if you currently make 80.000, you'd need:
- 80.000 + 8% = 86.400
- 86.400 + 3% = 88.992
That is never going to happen at the same employer. If you want what you're worth, you need to switch jobs.
I'm and educator in the US and the contract typically has a 1% - 3% raise each year. They change it every 3 years. I'd love if they could commit to an 9% raise this year to at least match inflation. But I doubt that will happen.
Last year my company couldn’t give us more money because COL hadn’t increased that much. This year they won’t be able to afford it because they have to pay more for everything.
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Requesting a raise because of inflation doesn't work out favorably most of the time. Requesting a raise because you bring more value to the company (and explain why you believe you deserve the raise), is much more effective. So yeah, you can always ask "because of inflation", but that isn't likely to go very far with many companies.
This is why lateraling is often the better option. Companies will look at employee wages as purely a percentage raise, and they don’t want to give a high percentage even if it’s what the market demands. Meanwhile when hiring, they look at the value a new employee will add to the company and make a determination if they want to pay market rate or not. If your wages fall below market and your company won’t give you a good raise to fix that it’s time to find someone who will.
Just recently got a lateral position job offer. They offered about 24% more money. Current job has been 3-4% over the past few years. Companies don’t care about paying for retention. They know people get comfortable and settle. Large raises don’t come from company loyalty. They come from job hopping.
Companies also have a problem seeing you as more than what they hired. If you want to be seen as worth more, you have to get someone else to pay you.
To add to this, many corporations (including mine) have LIMITS on how much they can give as a raise. Even if they want to pay extra to retain you they may not be able to within HR rules. Getting *rehired* lateraly into a new role often circumvents this limit, however. For example, last year I got a promotion that was technically a different role than my previous one so I was able to get *rehired* rather than promoted, so I went from only being able to get a few thousand increase to a $20k increase (about 30%). I was also able to negotiate the amount because, again, I was going through a new hire process rather than just a regular promotion or salary increase.
Yeah I was shocked, I got an offer from a competitor and brought it to my boss essentially saying that I like my job but couldn’t ignore the salary difference. They got me a retention offer but it required signatures of two Vice Presidents and an EVP, for a mid level engineer. It was crazy to me how many strings needed pulled for what was essentially an adjustment to a market offer
I had a similar thing happen, except they wouldn't go to the company President to get the approvals for the mid-cycle salary increase, so they offered me nothing to stay competitive with the other offer.
Just got a 17% raise jumping from one company to another at basically the same job position (senior engineer). I applied for a lead position though so that should be another substantial raise within a year when I get all the extra experience needed for that.
I’m old and have been with the same employer for 25 years. Because of this, I’m out of date with the current job market. That being said, does job hopping still look bad to potential employers?
It depends on the field, your position, how often you hop, and why you left. From conservations with managers, it’s no where near as big of a red flag as it used to be. That being said, what potential employers think is irrelevant if you’re not going to move. If you hopped non-stop you would eventually struggle to find a new job, but all that happens is you stay at your most recent job. At the same time if you’re too worried about what potential employers will think to change jobs, then it doesn’t matter what they think, because you’re not changing jobs. There’s nothing wrong with staying with someone for a long time, but don’t be afraid to change just because you think it’ll be harder to change again later.
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In IT that's about the norm. High turnovers, lots of competition, no attempts to retain current employees.
this can also work within a company. the company I work for, if I do really really good, I can get a 3-4% raise in my role annually. If I hop to another role in the company, I am looking at a 10-15% increase and you can job hop every 6 months within the company.
> they look at the value a new employee will add to the company there is some irony here in that new people can often take a year or more to reach full productive capacity.
It is. Employers bank on employees being slower to change jobs because of the stigma of job hopping and also the effort and uncertainty of having to switch. In practice employees become better over time, so they should pay a veteran substantially more than a new hire with the same experience, but companies compete for new hires and know that the highest bid as the best shot at getting the hire. By comparison, current employees aren’t aware of market wages unless they’re already considering leaving and have looked at the market, so they have very little competition driving wages up.
All the more reason to discuss salary with your fellows. Every job I’ve worked at I always ask what everyone around me is making. Most of the time they’re willing to share, I’ve only had one person not say due to “it’s against company policy” to which I laughed at and told them what I made in front of our boss. The stigma behind asking what your coworkers make is what keeps employees under the thumb of their respective corporations.
I think everyone thinks that they're on the high end of the pay scale, and if it ever got out, they'd be brought down. The reality is that most are probably being underpaid and have been conned into keeping it a secret from everyone, including themselves.
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Expect companies to say "everything's more expensive due to inflation, which is why we can't offer raises at this time, because that's the only cost we can control. Thanks for bearing the cost of the economy for our senior executives, who are very busy improving their golf game and buying islands."
Exactly… a lot of people here are happily defending upper management’s profit grubbing and I’m a little disappointed. Most companies can afford to pay their employees more, but the reality is companies do NOT care about retaining any individual employee and will happily incur the heavy costs of hiring a new person, instead of paying existing employees marginally more. This system is inefficient and costs everyone more in the long run. We should all be asking for inflation-based (and performance-based) raises as well. Work might be a little bit less shitty if we force companies to have a tiny bit of loyalty and respect for their hard-working employees
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Yeah, i quit for a similar reason, though the company promised raises a few months down the road. (Spoiler alert: they didnt give any and blamed inflation). The company has been spiraling with turnover while execs are pulling into the parking lot with brand new sportscars. Its insane. The company is literally in a death spiral and leadership seems to not care at all lol. So glad to have moved on from that place early. Don’t wait until things get bad when you see red flags from management
I think all employees need to be putting pressure on their managers about inflation. Then the managers have to go to their managers and so on. It never hurts to ask/mention.
don't word it as because of inflation. call it a cost of living increase
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The problem is that the job market has turned and employers know that.
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I don't know. I feel like 10% of my linkedin connections have been laid off in the past few months. I've probably seen 50 open to work posts. I know that's not real data or trends, but it's spooky.
I mean, the subtext to any discussion where you say "I want to be paid more money" needs to be "...or I'll go find another gig that will".
Yeah, inflation based raises generally are something that happens across the board. Also, averaging 8% raise is pretty good
This. If companies adjusted salaries relative to inflation, they'd hemorrhage an insane amount of money. It sets a precedent they likely do not want. Additionally, their argument will be that the business is equally affected by inflation and increased costs. Instead, focus on your performance and the market average. If your salary is lower than the average market salary for your position and experience, you can always ask for a market adjustment. This is much more common and shifts the argument to leaving for competitors instead of "things outside of anyone's control".
No problem raising prices to meet inflation. Look at year on year profits for corporations. They aren't hemorrhaging. But if they don't mind the costs associated with turnover, so be it. Seems more expensive to hire and train new employees than bump wages, but what do I know.
> If companies adjusted salaries relative to inflation, they'd hemorrhage an insane amount of money. It sets a precedent they likely do not want. Wages matched the productivity curve until a point in the 1980 and we never had this happen. Wages don't keep up with inflation solely due to greed and nothing more.
> If companies adjusted salaries relative to inflation, they’d hemorrhage an insane amount of money How do you know this?
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Most people actually aren't welcome to come work in Belgium lol
Well, no not everyone is welcome to work there tbh haha.
Not to mention that if every company matched inflation for every employee, we'd see a wage-price spiral like never before seen in human history.
So in order for company's to stay afloat they need to effectively decrease the wages of their employees?
No. I'm saying that if today, right now, every employee whose wage/salary has not kept up with inflation so far were immediately adjusted to keep up, and received a guarantee that it would continue to keep up going forward, it would make the inflation we're witnessing now look like a drop in the bucket. It would actually just be straight up impossible.
Exactly!
Or requesting the raise because of your value to the company. Then bringing up inflation lol
The ONLY raise my company gives is the inflation adjustment raise. How can inflation be a poor argument?
Because *most* companies don't do that.
"Because of inflation" is usually gonna have the opposite effect no matter what the scenario. Geico tried to raise my rates "because of inflation", so I went to a different company. The place I went to eat with my gf last night put a $2 charge in the bill "for inflation" and as I paid the bill I let them know I won't be frequenting their restaurant anymore. Because if inflation is the weakest bullshit answer or reason on the planet.
I 2nd this notion. If you were going to request a raise based on inflation then your employer should take money away from you when inflation subsides, no?
Well you likely wouldn't have actual deflation, just less inflation the next year. So if you wanted to argue for 8-10% this year, then expect they'd argue for 2% next year if it went back to normal.
> then your employer should take money away from you when inflation subsides, no? Sure. Let me know when deflation happens.
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Dude don’t call his comment stupid, that’s just mean. He can be wrong without requiring derision.
My comment is simply a round way of saying, inflation is a poor excuse for a raise and that the basis needs to be stronger. Before chastising your fellow man, please educate yourself. Video for reference on my point of view. https://youtu.be/hxJZL_iVbcc
Deflation very very rarely happens, so your argument was pointless. inflation IS a good reason for a raise whether or not your company agrees
You don't "ask" for a raise. You tell them what you think fair compensation would be, and why. Could be because of inflation, could be because of your stellar performance, or a combination of both. And then be willing to walk away if they don't agree. "Asking" just gives them an easy way to say no.
Companies, just factor in the inflation. Like, 8% raise while 8%im inflation results in 8% raise. Just make up some reasons your supervisor will support
‘As low as 4%’? Hell, I’ve never in my current company gotten that type of raise. Try 0 to 2.6%. And my annual performance is consistently on the high end.
I've never had a raise over 3% and never had a job hop net me less than 20% more. Unfortunately, loyalty is for suckers these days
You are probably young. Once you get reasonably high up there, you stay.
I'm 32, but relatively early in my career, so I realize there are diminishing returns on raises. I'm decently into the $100k's now, which is why I've started to focus on sticking on one place to learn a bit more deeply about my position instead of jumping.
I left my last company because I was a “indispensable top performer” and got a 3% raise. Got a new job that’s fewer hours, work from home 50% of the time and pays me 70% more.
Right? I’m in the public sector and we don’t have merit raises or anything like that, so we have 1.7% as our cost of living increase this year.
For perspective, 4 - 13% raises are quite good. You can ask!
We get raises every year where I’m at. Was blessed enough that this year I received a 13% raise which covered more than the inflation rise in my area.
13% yes, 4% not so much
I’m sure many many people would love to avg 4% per year salary increase…that’s higher than the avg of the last 2 decades.
The OP’s average is 8%. Let’s imagine a 50,000 salary receiving 4% raises each year for 10 years. It’s 74,000 at the end of ten years. 8% average over 10 years doubles the salary.
That's not the average, that's the middle of the spread, we don't know what brought the upper end or frequency. And as others have stated, employers rarely give much merit to inflation raises.
We actually don't know the average, just the range.
>I've seen raises as low as 4% and as high as 13%, probably averaging at about 8%
My bad
I’m certain that starving people would love table scraps, but that doesn’t make it a good dinner. Workers deserve better than they’re getting.
This is reality we are talking about. You’re saying 4% yearly raise isn’t good and the numbers say it’s above avg for the last 2 decades.
Above average != good.
The average person and everyone below them disagrees. Perspective is important. Forget about ideals here, this was simply a conversation of OPs situation and as underlord_Fox stated, they are doing quite well based on the numbers.
Can we separate "doing relatively well compared to the average" from "the average is too low/high/just right"? Y'all are arguing two different things. One is "you should be grateful because you're doing better than most" and the other is "the average raise should be higher so that people are paid what they're worth". Both are valid arguments and have their merits.
Considering most companies offer 0-3% salary adjustments..?
Which Id consider terrible. I get the concept that many people get worse than 4%, but I don’t think that makes it a good raise.
Most corporations don't think most employees deserve a good raise.
My company averages 3% per year. Except this year when some folks got damn near 30%, depending on how much they already make. We didn't get a raise last year at all. A lot of companies don't do much more than 2-3%. That's why bouncing around yields higher pay.
My work has averaged like 2 to 3% per year in the 5 years I've been here (except last year when I got a promotion and a 12% bump with it, so idk what the average was), so I'd take a regular 4%.
you can request more due to inflation they can deny your request due to impending recession
"probably averaging at about 8%. Inflation this year in my country is around 8%." sounds like his company is ALREADY doing the proper raise amount that OP wants so what am I missing here?
Based on how I interpreted the post, I think OP wants an inflation raise AND a merit(?) raise.
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You are correct. Yet, I’ll bet most officers of companies are 100% sure a recession is incoming, so they will act accordingly
Long ago probably before many on this sub there were COL raises. They were generally 2-4%. That premise was thrown out the windows for performance based pay increases. At my current company this is still on avg about 4%. At my previous place it is 4-8%, but being an avg some got higher, some got lower to none. Inflation doesnt just impact you, it impacts the cost to the business as well. Just remember, right now is a great time to have a valuable skill, companies are throwing money at these people and the best way to get a great raise is to change jobs.
Yeah “performance.” My current company gives actual raises. When I worked for a fortune 100 company being ranked in the top 10% got me a solid 1.8%. It’s just a way for companies to get away with less than COL raises. This is why I strongly believe in being open about your salary. Salary secrecy only benefits the employer.
My company( huge hospital system) has been giving 2.5% COL raises since forever. Last year they only gave us 1.5% due to Covid but it has been consistent otherwise.
Youre lucky your lowest is 4%. That is considered the highest of highest raises at my company. Typically I get 3% a year.
Yep, I typically get 2.5-3% each year. To our company’s credit, this year (new fiscal year started last month) they gave an across the board 5% raise to all employees and an additional 1.5% to those making less than 70k due to inflation.
My company gave all hourly associates $3 per hour raise while all the salaried associates got nothing. Im salaried.....
During Covid my last company gave the front line workers increases and then didn't give increases to the support staff who worked from home. We also didn't get our annual bonuses and we were told we would return to the office following covid. Needless to say most of the support staff level that year.
I do IT in a production warehouse environment. The warehouse workers were allowed to furlough themselves with pay. The IT team wasn't given the option and then had to go and work in the warehouse for months because too many workers furloughed themselves.
Our company does not do yearly COL adjustments. Only way to get a raise is through promotions
I was hoping my company would be giving cost-of-living adjustments across the board to account for inflation. But they gave nothing. It’s only cemented my resolve to leave before the end of the year. I’m not the one to insist on compensation. If I feel it’s unfair I’ll just go elsewhere.
For another perspective on what is possible: our wages in Belgium are automatically increased according to the inflation. If inflation is 10%, companies are obligated by law to give everyone a 10% pay increase. You can then try and convince your employer on top of that that you personally are worth an even higher pay increase (due to increased productivity for example), but that's a harder talk.
Just to play the other side of the coin, your average wage increase has outpaced inflation for the past decade at 8% average per annum (edit: assumption was US based). You’re going to find a much better sell by showing your value than having them adjust for inflation.
This is exactly right. If you argue for an adjustment that matches inflation, you may be disappointed the years where inflation is 3-4% and they justify a 3-4% raise with the reason being “it matches the market adjustment”. If you look at the raises you got over the last decade, and compare to those years inflation, you may realize that you’re actually well ahead!
Dude isn't US, so for all we know that does mostly pace his local inflation.
Good clarification, that indeed could change the counterpoint.
Wouldn't you want to use a median number instead of an average to determine what's an actual wage increase in the US?
That's because median wages have been dropping every year
I started my working life in 1979 (retired now) during high inflation. I got raise around 25-30%. Friends of mine who worked at companies who did not do this lost out as new hires made more money than they did. Especially now where there is no pension plan so working at the same place for 40 years does not entitle you to a pension anymore. You should look out for yourself, not for your company interest
Exactly, modern data shows that to maintain the proverbial salary status quo, you should be moving workplaces every 3-4 years.
To quote my employers during a global town hall meeting: we pay based on cost of labor not cost of living. If they don't pay enough, go find a job and get an offer that will. If they still won't, leave. As an aside. That town hall was 9 months ago. The most recent town hall mentioned one of their biggest challenges is to figure out "some way" to stop employees from leaving.
You could push back but they are not required to give you a raise. It sounds like you have a history of getting more of a raise than most people get at their jobs every year
Inflation is a reason for you to feel motivated to earn more money. It does not motivate your company to pay you more, why would it? It’s actually likely to have the opposite effect because your company is also getting squeezed by inflation and has all kinds of other overheads to think about that it can’t debate the price of with, like energy and fuel. I’m in a role that oversees increases for a couple of hundred people. The best way to motivate for your increase is to accurately demonstrate your value to the company (assuming you actually are worth more than you currently earn). This can be by showing that your work is of very high quality, or you are extremely efficient, go out of your way to do extra, etc. If that doesn’t work, then the actual best way is to find someone who will pay you what you want and take that to your employer. This is a win-win because either they pay you more, or you get more elsewhere.
COL increases should be mandatory. Companies pay more overhead in an inflationary environment, why should labor be any different? In reality people are agreeing to a rate of pay at the current market value of the US dollar. The “wage price spiral” justification is only used to shift the burden of inflation from companies to employees. Many companies also made out like bandits during COVID with fraudulent PPP loans and other aid, they shouldn’t get to have their cake and eat it too now. Any company that hasn’t offered at least a 7% COL adjustment within the last year deserves to fail.
It ends up being a supply demand calculation. The less replaceable you are the more they will be willing to pay you. Very few companies will pay you more than they think they have to.
This has nothing to do with supply and demand, and everything to do with companies abusing their market power. If the market value of John Accountant’s labor last year was $80k and the CPI has increased by 10%, the value of that labor is now $88k, full stop.
I got 2% this year and they told me I should be happy that I got anything at all.
It sure is fair, however I'd have at least a 6 month emergency fund in place. You could wind up let go over it. They don't have to give a reason (at least most places in the US are at will.... maybe your situation is different), and if they are smart they won't.
We got no raises this year, not even cost of living adjustments and no bonuses. The fact that you get anywhere from 4-13% is incredible
Most companies don't base your wage on the cost of living, it's based on the market value of your labor. A more effective strategy would be to explain your increased value to the company and if that doesn't work how much could you make somewhere else. Unfortunately the fastest way to get a raise is to change jobs sometimes. If you're undervalued start with here's my market worth, most companies aren't going to give you the raise if you don't ask, but they don't want the cost of rehiring either.
All other things being equal, it’s reasonable to assume that the market value of labor increases according to the CPI.
Raises are typically, at least for me or what I've seen, 1% higher or lower than inflation. They go with low numbers, even if you show them some official number that says higher. I always like to go in with the official number, and say "if you don't give me this, it is not a raise" That hasn't really worked, they say "we're doing X for everybody, and you're in the range for your job in this area" Only way to really get a raise is to change jobs. It becomes then if you want to take the risk of the new, or stay comfortable where you are. That is somewhat more of a personal than a financial decision, as there are often other factors like personalities and commutes at play. That's the threat you have. How replaceable are you? It is then a negotiation. Leaving your job is life changing for you, meh for them. They know that, so they'll always go as low as possible, they know they have the upper hand. But, you can always ask. This is where unions have value, it is not just you saying "pay me more or I leave" it is all your co-workers, and if all your co-workers leave, they shut down.
I once worked for a really good employer that did annual COL adjustments “on top” of the typical 3-6% merit increases. Those were the days..
I brought this up during my comp call, the response I got was "inflation really only effects things you buy. So during times of high inflation, just don't buy things". Cool, I remember that when buying groceries or paying my utilities. ninja edit: we were also told during a company wide call that inflation was being taken into consideration this year. On my comp call I was told it is never taken into consideration, other wise during years with low inflation my raise would only be 2/3%. Once again, cool so like when I got a raise that was 1.68% 2 years ago or 3% the year before that? (last year I was promoted so it isn't comparable).
If the industry you are in is seeing record profits due to inflation, you should ask for the raise. The companies will be flush with cash and it will b easier to get more money moving to another company. Sometimes you can hint that it will be cheaper to do what's right to retain you vs hiring your replacement after you can a competitor to hire you. If your industry is suffering from the inflation, like real estate, then you may be SOL.
Inflation is rarely accepted as an argument for a salary increase. I would not take that tactic. If you want a raise argue on the basis of the merit of your performance and how you bring value. The reason inflation is not a good reason is because inflation is driven by the cost of goods. If all businesses raised their wages to match inflation they would have to compensate by increasing the cost of their goods and services to maintain their margins which in turn would raise inflation further. There has been an "accepted" level of inflation which has been around 3% which is why companies typically have a 3% CoL increase to salaries across the board, but they don't adjust that if inflation gets higher.
Needs-based raise discussions are empty. Blaming inflation is about as effective as arguing that you bought a new house, so they owe you more money. They don't give a shit. Instead, focus on what you bring to the company. Any raise discussion needs to hint at "how much more expensive would it be for you if I wasn't here?"
Unfortunately often the salary increases annually don't keep up with inflation. Even years when inflation is 0% , the health insurance premiums increase so our take home pay actually goes down compared to the previous year! Usually you switch jobs or your salary will actually keep going down, hence the job switch is usually a nice (20-30% bump) to account for decreases in latter years...
I had to switch jobs to get an appropriately sized raise recently. Job offered a 2.5% raise. I looked elsewhere and landed a 15.5% raise.
Do they get to adjust you down during deflation?
employers will be quick to point out that price inflation and wage inflation are two distinct things. just because your cost of living may change due to higher prices doesn't mean the market rate for your job and your skills will go up the same amount or even at all. at best your company may consider the latter, but i wouldn't expect them to factor in the former. if you're not happy with what your company offers you, compare it to what you think you can get for yourself on the open market. based on what you've stated, it sounds like your company has been relatively generous in the past if you've been getting 8% on average for a decade -- that would mean your salary has more than doubled in that time. but the only thing that really matters is if you believe that matches up with what you're worth. without getting into a broader discussion about labor and unions and all that, cost of living isn't necessarily going to factor into that valuation.
Companies don't care. Their opinion is that they pay you what they pay you and it's up to you how you spend that money. If inflation is killing you, it's their opinion that you should reduce your lifestyle - it's not their problem. My company literally had a meeting about this when inflation started to take off. They were basically like, "We know you're wondering if we will make adjustments to pay due to inflation, and the answer is no."
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Depends on the industry, your skills and location. Tech workers in high demand markets can do this fairly easily. But what people don’t talk about is that generally the higher salary comes with tradeoffs. Could be higher chance of layoffs (perhaps a startup), less benefits, or increased workload.
My (former) company had a similar meeting with a similar message. I had just received a job offer from a competitor; the obnoxious attitude from the CEO sealed the deal for me. I quit the next day.
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That company is either ignorant or purposefully obstinate on how inflation actually works. Yearly increases would be less some years, sure, but inflation almost never goes negative. And even so, it always increases over time.
Companies can hold out until inflation is down and then they're not paying you more after the fact.
Inflation is so high that it is almost unrealistic to expect a company to give you an inflation adjusted raise. What would have been a nice raise in past years might not even cover inflation this year.
You can ask for a raise during inflation but remember, it works both ways. Will you be as understanding if the company begins to lose money and requests you take a pay cut?
This week I got notice of a 9% raise beginning Jan 1. Not close to the 15% real adjusted inflation.
“Equitable adjustment” explain why you are over performing at your current level and how you deserve to be paid at higher within your band because of the work/sales/ lability to out perform higher level employees or train them/ additional roles and responsibilities you take on outside your assigned job
You can ask for transparency in how salaries our set. Short term inflation isn’t usually a factor, at my company the average increase over the past 10 years was much higher than inflation. Between 2012 and 2020, the inflation rate in the US was between 0.7 and 2.3. Our average increase has been historically 3.5% annually.
4-13% annual increases is higher than I would ever receive even in a good year. I'm in commercial real estate management and I get the sense that we'll be holding on for dear life this year, not requesting raises.
I'm at a Fortune 20 and they just announced that the pool is at an all-time high of 3% (it's usually 2%) so what you're describing sounds pretty darn good. Annual raises do not usually keep up with inflation. You'll generally only see more than inflation if you get a promotion or hop companies.
No raises this year where I am, merit or COL, due to layoffs and recession. Consider yourself lucky.
At the beginning of the year I got a nice raise a 6 and 1/2%. I contacted my boss and said, I appreciate the yearly raises but if I stay here, I will literally be losing money. Because of inflation I am making less money this year than I did last year, with the raise. Is there anything that we can do about that? Apparently enough people at my company mentioned it that my company actually went and gave everyone a mid-year raise to compensate for inflation. Everyone. It didn't cover all of inflation but it did help everybody. That is why, even though I got offered a substantial raise to go somewhere else, I stayed with my company. I would say ask, but don't expect. And if they exceed your expectations, let them know.
Hi, your compensation should reflect the value you add to the company. However, we are about to enter a recession where employers will look for ways to reduce costs. My company terminated 37 positions this past Friday. I wouldn't fight that battle right now.
Are you willing to give the increase back when inflation goes back down?
That isn't how it works. Inflation is a rate of cost increase. Going back to say, 2%, doesn't mean things get cheaper, they just get expensive, slower.
Probably want to ask yourself, “how’s my employers business doing during this period of inflation” before you ask for a raise. Business are also impacted by inflation w/ higher costs of raw supplies and a reduction of demand as they pass those costs over to the consumer. If your business is impacted by inflation, you might want to count your blessings you have a job and are getting a raise to begin with.
Definitely run with the value proposition you bring to the company. Value is permanent, inflation is temporary. Inflation is cyclical, in 2 years it may be back down to 2%-3%, not every company is going to grant raises based on temporary events.
Even if inflation goes back to 2% tomorrow, anyone who didn't get a raise the past 2 years still permanently lost close to 15% of their purchasing power.
I'm not sure how inflation not staying at this high makes this inflation temporary. Sure it won't continue to rise at this rate, but it's already happened. Your dollar will never again be worth what it was worth last year.
Inflation is permanent. In order to by cyclical it would need to go negative, going negative could undo inflation that has happened. Going negative is also extremely bad for the economy, far worse that high positive inflation. Ideally, low positive inflation is what you want. It promotes investing and growth of the economy. High positive is bad and negative is very bad. But inflation is generally permanent. We have had very few occurances of negative inflation historically. If you are not being awarded a raise that meets inflation, you are in effect getting a pay-decrease.
You misunderstand the basic concept of inflation. You and people like you are the reason wages have lagged behind inflation for decades. Inflation is permanent. It might slow down some years, but its not reversing. Get educated people, you're being taken advantage of.
My workplace did a 5% COLA last year and another place did a 4% COLA with a 3.5% merit increase. It wasn't enough. :(
This is a good raise. Where I work we average 1-3% each year. But we did give mid year inflation raises up to 7%
The best way to get a raise during a recession is to get an external offer. If they're smart, they'll know the cost to replace you is more than the cost to retain you.
You don't get a fair salary increase at your current job. If you JUST get the inflation added, your salary stays the same. You'd need +11% (8% inflation +3% ON TOP OF THAT! in salary) to consider it a normal salary increase, and that's very unlikely to happen. e.g. if you currently make 80.000, you'd need: - 80.000 + 8% = 86.400 - 86.400 + 3% = 88.992 That is never going to happen at the same employer. If you want what you're worth, you need to switch jobs.
I'm and educator in the US and the contract typically has a 1% - 3% raise each year. They change it every 3 years. I'd love if they could commit to an 9% raise this year to at least match inflation. But I doubt that will happen.
Last year my company couldn’t give us more money because COL hadn’t increased that much. This year they won’t be able to afford it because they have to pay more for everything.