Will inflation help you get a raise?

May 19, 2022

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The prices for goods are increasing due to inflation. But your salary stays the same making everyday life more expensive than it used to be. Will this rise in prices be enough for your company to consider giving you a raise? Keep reading to find out how inflation and salary interact and if this inflation could actually boost your salary. 

Are businesses considering an increase in pay due to inflation?

Despite the lack of qualified workers, many businesses don’t have an incentive to raise salaries even though inflation is at an all-time high. This is difficult for employees who will have to bear the burden of costs being higher and salaries not matching. Many businesses don’t have an incentive to raise salaries especially if no other companies are doing it. Some employers could use this to their advantage to get the qualified employees their company needs by offering higher salaries. 

Even though companies may be hesitant to raise salaries due to inflation, there was an increase in wages between 2021 and 2022. There was an overall average salary increase of 3.4% so even though employers may not be raising salaries now, they have increased in the previous few years. 

On the flip side, businesses costs are increasing almost across the board, which most employers don’t see. So as employees feel a pinch with inflation, many businesses are feeling the pinch too and some are trying to survive as costs increase. 

How much should salary increase to keep up with inflation?

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While inflation may not directly cause a pay increase, companies are constantly monitoring inflation and it helps them make decisions to increase pay more than they previously would have. Even though businesses may not want to increase salaries due to inflation, many recognize that it is necessary in order to retain employees and attract new ones. 

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Pay budget forecasts have predicted an increase in salaries of up to 4.2% which is higher than any projected pay increases in the last 20 years. While thinking pay should go up during these times a good question to ask yourself is in a year when inflation is low, is a low raise justified? Many believe it’s hard to tie raises directly to inflation in one or two years for this reason.

What makes inflation and salary increases not the same?

There are a few factors that cause inflation and salary to increase separately. Salaries are driven by fluctuations in supply and demand for labor. Other factors that contribute to salary include technological advances, demographics, labor and participation rates and productivity growth. Inflation is driven by the change in cost of market goods like groceries and gas. 

While these are impactful to each other, they don’t directly interact which is why inflation and salary will not increase at the same time. Once a company raises salaries it is difficult for them to ever reduce. Many businesses wait to raise wages and will see how inflation is impacting the market before making a long-term change. 

How do you ask your boss for a raise?

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What should you say when asking for a raise?? Whether you’ve been at your company for a while or want to ask for a raise due to inflation this is how it’s done. Start a conversation with your employer about a raise. A time will be set to discuss it and then you must go into the meeting with confidence.

 As opposed to focusing on why you “need” a raise, direct the conversation to why you deserve the raise. This can be based on your dedication, the quality of work you do, your specialization etc. Think about what makes you a unique asset to your company and include that in why you deserve a raise for what you will do for the company moving forward.

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How should you go into a meeting asking for a raise?

Now that you’ve discussed a raise with your boss, here’s what you should say and do going into the meeting. 

Go into the meeting feeling confident and knowing that you deserve the raise, but also be open if there are valid reasons why your boss may disagree. Do some research prior to the meeting to know how much you are actually worth as an employee and double check that your request is reasonable. Enter the room with a good attitude and maintain that even if the answer for your raise is no. Confidence and poise will carry you throughout this.

What should you not say when asking for a raise?

When making your case for a raise, there are a few things you should NOT say. Check out below to avoid what to say during your meeting

  • I’ve been here X amount of years
  • I need the money
  • I’m doing enough work for more than one employee
  • If I don’t get a raise, I’m quitting (unless you are truly ready to do that)
  • Not saying anything at all

Raises and more! Journey Payroll & HR has the expertise you need

You handle the raises and Journey will take it from there. Navigating the ever-changing modern-day workplace can be quite the task. From raises to remote work, payroll and more. It can feel like a daunting task trying to balance it all. Journey Payroll & HR offers a variety of services for this new remote era to keep your business running smoothly. From time clocks, payroll, and remote onboarding we are here to help your business succeed. Contact us today to see what we can do for your business. We can’t wait to work with you!

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