If you’ve been finding your pay packet isn’t going as far as it once did-you’re not the only one. The cost of living is soaring, and wages are effectively going backwards.
So, should you ask your boss to boost your salary to keep up with inflation?
When it comes to negotiating inflation pay rises, for a long time there’s been a simple rule: don’t mention inflation. The reasoning has been simple yet ruthless in that, basically, most bosses don’t care how you’re doing financially, and whether you can make ends meet.
But with inflation now at its highest rate since 1990, and most Australians are worse off, some experts are tweaking their advice. Many workers are sharing stories of asking their boss for a pay rise.
Emma from Melbourne reports: “I told my boss that with the cost of everything going up, my salary wasn’t viable anymore”, I didn’t want to leave, but I was willing to go somewhere closer to home that offered a bit more”. And it worked, after a few days her employer agreed to a 7% pay rise.
Amy, 24, a designer in regional NSW, had a very different experience. She also brought up inflation with her boss-and got knocked back. “They said they couldn’t justify paying me more”, she said.
How To Have the Chat
Mentioning inflation in her negotiation worked well for Emma from Melbourne, but expert opinion here is divided. “Don’t mention inflation”, says one HR Specialist Karen Gately.
“Employers are thinking about their own books and the growing costs of their business”.
That is, if you go to your boss saying you need more money because of inflation, they may say the company’s costs have gone up too, and it can’t afford a pay rise. Emily Barnes, a professional mediator, agreed that “traditionally” an employee’s financial pressures haven’t been “the company’s problem”. But that’s not always the case. Workers in sectors with a labour shortage are in a stronger position to negotiate a pay rise, in which case referring to inflation can be helpful.
Be Prepared
Whether it’s researching the average pay range for a similar role or making a list of reasons why you’re good at your job, it pays to be prepared. Write out what you want to say. Even if you don’t use this in the conversation, the process will help.
Some questions to ask yourself:
- What do you want to achieve?
- What are you willing to accept?
- What are you willing to do if your pay rise request is refused?
- Are you willing to quit, even if you otherwise like your job?
“Unless you have a really clear idea around at least three of those things, then you don’t have a clear view regarding your approach in terms of the negotiations”.
How Much to Ask For
John Buchanan, a labour market expert from the university of Sydney’s Health and Work Research Network, recommends asking for a pay increase of between 4.6% and 5.2%. these are the amounts the Fair Work Commission (FWC) increased minimum and award wages this year. “If any worker can achieve that increase in the current situation that is a good result”.