UK inflation is at a 40-year high with the Consumer Prices Index up by 9.1% as of May. Add to that the industrial action by the National Union of Rail, Maritime and Transport Workers that has brought much of the country to a standstill, and inflation-linked pay increases are on many people’s minds. The situation is not limited to the UK: US-based online education platform ELVTR told Forbes that searches online for ‘how to ask for a cost-of-living raise’ have increased by 420% and the World Economic Forum reports that “more than two-thirds of people around the world are feeling the squeeze”. But how do you approach your employer to discuss an inflation-linked pay increase, and what is the best way to respond if the request is denied?
Career coach Samantha Lubanzu, formerly an HR business partner at Barclays, is quoted in an article written by Evie Breese for The Big Issue: “Most organisations will be having their HR team working on how they can bring their pay up in terms of inflation rises.” However, this has traditionally been in the region of 3%, which in the context of today’s higher rates amounts to a pay cut.
All about you
Lubanzu counsels against using the increasing cost of living as the sole justification for a salary increase, given that all your colleagues are essentially in the same boat. Instead, she recommends that employees focus on their individual value to the organisation. “The main thing is to focus on what you’re personally bringing to the role,” she says.
ELVTR CEO Roman Peskin concurs, telling Forbes: “If, as an employee, you are a ‘painkiller’ to your employer’s pains, you will always be able to negotiate a raise.”
Peskin goes on to suggest four further strategies to deploy when seeking an inflation-linked pay increase:
- Do your research – figure out whether your current salary meets the market benchmark, and if it does not, use that as a negotiating tool.
- Show don't tell – prepare visuals and hard data to demonstrate what you bring to the table, including specific examples.
- Upskill – invest in improving your skills and expertise and show willingness to take on more responsibility.
- Nail the negotiation – don’t rush your manager into a decision, don’t present ultimatums you’re not willing to follow through on, don’t complain, and don’t give up if your request is denied.
Turn ‘no’ into ‘yes’
As in any negotiation, it’s wise to enter the discussion knowing that you’re unlikely to get everything you’re asking for. “If the answer is no, your number one reaction should be to ask for a detailed justification for the decision and ask what would make it a yes in future,” says Lubanzu.
And entering the negotiation with requests other than money, which might be easier for your employer to grant, is a sensible strategy. In an article for CNBC, Andres Lares, managing partner at Shapiro Negotiations Institute, is quoted as saying that he increasingly sees people requesting perks such as permanent remote work, fewer days in the office, a title change, flexible scheduling or a four-day working week if a pay rise is not forthcoming.
“It’s really important to understand that money is never really the main driver for individuals to stay in an organisation, there are so many other benefits they need to look at,” Lubanzu says.
And, if your best efforts to negotiate meet with refusal from your employer, it might be time to consider your future outside the organisation. After all, despite biting inflation, job vacancies remain at record highs. “Earmark your extra time and energy to looking for a new job, paying attention to employers who are paying competitively,” advises the Forbes article.