As Inflation Rises, So Should Your Pay

But you need to come prepared to get the money you deserve.

Originally Published Nov. 11, 2022.

The tension in the air these days…is palpable.

Despite what would be considered favorable economic conditions, pricing for consumer goods and services continues to surge, the cost of living is rising sharply, and industries are experiencing unprecedented labor shortages—all while workers are demanding and expecting more from their employers.

As an employee, it can seem overwhelming and unattainable to secure a raise in the midst of it all. Moreover, certain groups are up against the aforementioned challenges and face systemic inequalities when petitioning for increased compensation. A recent study from the Bureau of Labor Statistics found that Black men earned 76% of what white men earned in the first quarter of 2022, and Black women earned 57 cents for every dollar a white man earned. A report by the National Urban League further found that Black women are paid 38% less than white men and 21% less than white women.

While the data shows improvement in equality progression, there is still (surmountable) work to be done in pay equality. Today’s environment has led workers to be more aggressive and vocal about the value they add to an organization. Equally as important is that organizations recognize the value of experienced workers, which has led some organizations to recruit talent from other organizations. This has enhanced workers’ leverage to ask for and, in many cases, demand higher pay. With preparation, research, and understanding, workers can ask for a raise by presenting facts (not emotions).

Consider these steps when preparing to ask for a raise:

Understand what you bring to the table

When you first joined the organization, you had a particular set of skills in line with the needs of your current role. From soft skills, such as collaboration and effective communication, to hard skills, like work experience, academic degrees, and professional certificates, you should look at yourself in earnest. Understand how your work throughout the years has contributed directly to your company’s financial success and supported your team and the organization in achieving its overall mission, vision, and values.

Understanding your skill-set is the starting point for evaluating the appropriate approach to asking for a raise. Start your self-evaluation by assessing annual performance reviews from your supervisors and company leadership. Take note of your direct contributions to the company’s profitability and key contributions you have made throughout your employment.

In your area of responsibility, understand where you rank among your peers. Understand whether you are one of the best performers and if you are viewed as a strong contributor and member of the team. Review your responsibilities against those of your colleagues to understand if your responsibilities are redundant in the organization.

Once you have compiled these details, you will have a more accurate view of how you are valued within the organization and a better understanding of how your strengths and performance are aligned with company objectives.

Understand the current state of the company

Knowing the financial state of the company is critical. It is important to know the company’s financial performance over the fiscal year so that you can better ascertain whether the company is in a financial position to provide you with a raise. If the company is struggling financially, leadership may be looking at two components of the business: how to generate revenue (income/sales) and how to reduce controllable expenses. The number-one controllable expense is often payroll, a common reason for company layoffs.

If the company is thriving and the financial performance over the past fiscal year indicates the company is growing, the leaders are focused on what is driving the financial success and who are the people responsible for this financial success; a great opportunity to reiterate and reinforce the value you provide the organization.

Prioritize facts over emotions

Asking for a raise should be about facts, not emotions. Facts do not have to be proven; facts can be assessed and reviewed. When requesting a raise, especially amid inflation, a key component to keep in mind is to let data drive your decision. Leveraging data eliminates the emotional context.

Leveraging the facts you have assembled, from your performance to that of the company’s in combination with industry research on what workers in your role with similar expertise are being compensated, will help you determine the amount to request.

You will want to request a pay rate that aligns with your position and doesn’t exceed the pay of supervisors and leadership. That would likely inhibit your chances of getting approval for the request and may indicate a lack of institutional and industry knowledge. Be reasonable and logical in your request when asking for a raise.

Consider what else you can get

A raise might not always be feasible. If that were the case, you should be armed with other asks that hold equal value. From a shorter work week, remote options, and relocation, to more paid vacation, personal time, or an increased bonus, there are several alternative ways to be compensated.

Think about what would be most beneficial to you and research alternatives that could impact your day-to-day work. Be prepared to address any skepticism and to address the benefit to you and the company. It’s always good to come with options in hand.

Thoughtfully engage your supervisor and leadership

Get some time on the calendar to speak with your supervisor about a raise. Come prepared to outline your raise request and alternatives, if necessary. Be sure to present the relevant facts on your role, achievements, value, and personal contribution to the bottom line and industry standards. Be prepared to address potential questions and even pushback. Stand in your truth, and know your worth and value. You can decide if and when to bend on your ask. Be prepared for multiple outcomes, including potentially seeking new employment if your appeal is not considered, settling for an alternative means of compensation, or the best outcome, getting the raise you requested, and continuing to grow and thrive at your organization.

Either way, you will never know what could be if you do not ask.