WITH the cost of living rising, securing a pay rise at work could make a real difference to your ability to pay the bills each month.
Now more than ever it is important to know how to negotiate for higher pay, especially if you have been on your current rate for a while.
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The UK’s rate of inflation, which measures the change in prices for goods and services over time, rose to a 40-year high of 9.1% in May, and is expected to climb further this year.
This means the cost of everyday goods, such as food and clothing, is increasing.
That, coupled with rising energy bills, means talking to your boss about a pay rise might take some of the pressure off.
Employers are not under any obligation to increase pay in line with inflation, but the higher prices around us could be useful evidence of the need for more money when talking to your boss.
Bill Richards, UK managing director of Indeed, said thinking about your salary isn’t just something you should do when you’re looking for a new job, or seeking a promotion.
“Given the rise in the cost of living, it’s becoming an increasingly important factor for workers and jobseekers, with many trying to work out the best way to ask their employer for a pay boost.”
In some ways, the current employment market should work in your favour.
“For the first time since records began, there are fewer unemployed people than open job vacancies,” Bill explained.
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He said that this is putting pressure on the labour market as there aren’t enough people to fill the jobs available, which is pushing up demand for workers.
This means some companies have found themselves paying out steep salary hikes to attract prospective jobseekers.
So while discussing money can be difficult, there are steps you can take to secure the best salary for you.
Here are Bill’s tips:
Know your worth
“The first step is to do your research,” Bill said.
He suggested using an online salary tool to work out how much you should be earning.
Indeed has one here, which analyses millions of salaries.
“Knowing regional and national salary bands will help you set the bar at the right level, and manage expectations for both you and your employer,” Bill said.
“With inflation at a record high, it’s also worth ensuring you understand the percentage increase needed for your pay to keep pace.”
If you go in armed with some figures, you will have a better chance of understanding whether a new offer is a good one or not.
If you don’t do your research, you may end up selling yourself short.
Pick your moment
Timing is also crucial, Bill said: “Where possible, think about your organisation’s recent performance, and your own performance, before knocking on your manager’s door or arranging a virtual meeting.”
The cost of living crisis has created more urgency around the need for pay rises, but the best time to ask for a raise is still when you can prove you’ve met personal goals and when your employer is in a healthy position, explained.
That also means going in to a meeting with your boss armed with information about how good you are.
Don’t be afraid to highlight the good work you have been doing and, if appropriate, how well the company is performing as a whole.
Go with an open mind
Throughout the process, it’s worth remembering that not all employers will be able to match your salary expectations.
But they may be able to offer other forms of compensation, such as travel subsidies, or the option to work from home more.
Bill suggested weighing up the complete package in order to understand the impact it would have on your outgoings.
For example, if you were allowed to work from home for an extra day each week, how much would you save on petrol?
Or would doing one less hour per day for the same salary be more valuable in terms of having to pay for fewer hours of childcare?
Remember you don’t have to agree to anything there and then.
Always ask for time to think about any offer.
Look elsewhere
There may come a point when it pays to take drastic action and change jobs in order to secure higher pay, Bill said.
“Despite average pay growth soaring by 5.3% in May, the stark reality is that millions of workers aren’t actually feeling the benefits as it continues to be outstripped by the rise in consumer prices,” he explained.
You could even move into a sector which has a better record of salaries which rise with inflation, he said.
“According to Indeed data, only the food preparation and service and personal care and home health industries recorded annual wage growth above the current 9% rate of consumer price inflation reported by the ONS for April,” Bill said.
“While at the other end of the scale professional categories like accounting and legal are recording relatively low growth.
“With an impending recession and job cuts on the horizon, moving companies may not be the safest bet in terms of job security.
“But if you’re willing to take the risk, and are quick about it, it could
pay off.”
