Are you tired of getting the same amount of salary every year despite the increase in the cost of living? If yes, you are not alone. Inflation is the culprit behind the rise in the cost of living, and it is the reason why most employees find it challenging to meet their basic needs.
But can you use inflation to your advantage and get a pay raise? This article will explore the possibilities of using inflation to achieve a pay raise. Without any further ado, let’s dive deep:
Understanding Inflation
Inflation occurs when the prices of goods and services increase over a period due to high demand and commodity scarcity. The rise in prices leads to the devaluation of money. This means that a dollar can now buy less than it could before.
The inflation rate is determined by looking at the percentage change in the consumer price index from one year to another. While inflation may sound bad, it is actually good for the economy. Why? Well, because it promotes growth and encourages people to invest their money.
How Inflation Can Help You Get a Pay Raise
If you are currently earning $50k per year, and the inflation rate is 3%, your salary will be equivalent to $51.5k in the next year. This means that you are technically earning more, even though your salary has not increased.
However, if you are negotiating your salary with your employer, you can use the inflation rate to your advantage. By informing your employer that the cost of living has increased and that you can no longer meet your basic needs with the current salary, you may have a chance to negotiate a pay raise.
Expert Opinion
According to Susan Heathfield, a human resources expert, it is crucial to negotiate your salary based on the cost of living. She advises employees to do their research on the inflation rate before requesting a pay raise.
Heathfield also suggests that if you do not ask for a raise, you probably will not get one. So, ask for it, and you will get somewhere.
Your Value as an Employee
While the inflation rate can increase your salary, your value as an employee plays a vital role in negotiations. If you have been working hard and delivering exceptional results, your employer will be more willing to meet your demands.
However, if you have been underperforming and not meeting your targets, your employer may not be willing to give you a pay raise despite high inflation rates.
According to Paul McDonald, senior executive director at Robert Half, a recruiting firm, employees need to identify their value proposition to their company. He advises employees to keep track of their achievements. Plus, they should provide evidence of their contribution to the organization and emphasize the skills they bring to the table.