It's a Good Time Now To Ask for A Raise

"Asking for a raise is a good idea every year, but there is extra urgency to do it now as inflation eats into Americans' budgets.

Job growth is holding strong and worker turnover remains elevated, although some economists are warning of the risks of a recession. And wages, while going up 5.2% in May compared with the year before, aren't keeping pace with inflation, which rose 8.6% during the same time.

Raises are the best defense against higher prices and companies might be more receptive than usual to requests for a raise given the tight hiring market, according to the financial advisers and career coaches.

Here are some strategies for asking for a pay boost:

Gather numbers

Determining how much to ask for is one of the trickier parts of a raise conversation.

Jane Giuffrida, a marketing account manager based in San Diego, said she's doing homework now to prepare well before her performance review this fall. She regularly checks Glassdoor reviews, job listings and LinkedIn updates at companies in her industry to assess what her title and position are worth.

"For me, it's something I consistently keep a pulse on: the industry overall," she said. "How valuable am I to a different organization? What do people pay for my position elsewhere?"

To do the same, do a search of available jobs in your industry and specialty: Are companies hiring more, or posting relatively few jobs? Talking with friends and colleagues about what they make and how they negotiated their pay can also help you gather more data. Some places, such as Colorado, require job postings to include salary ranges.

Once you have your number in mind, decide how you want to present it. Linda Babcock, professor of economics at Carnegie Mellon University, recommends phrasing it as a range.

If you want an 8% raise, for example, put that figure in the middle and ask for a number between 7% and 10%, she said. Leaving that space open gives you room to make a counterproposal. Don't lowball yourself, either, she said.

A 10% raise was common in prior inflationary periods, though it might be less so now as companies talk of uncertain times, she said, adding, "It seems weird to us now because so many of us never experienced inflation."

Have a script

Once you know your numbers, think about how to make your case.

Lynnette Khalfani-Cox, founder of Ask the Money Coach, a personal-finance services company, advises against using the economy in your negotiation. Instead, showcase your biggest wins -- new clients, major projects -- and prepare to justify your ask with a greatest-hits reel of your work.

"The idea is to show what they might lose if they don't then compensate accordingly," said Kristen Euretig, certified financial planner and founder of Brooklyn Plans, a financial-planning organization. "Turnover is expensive. Hiring a new person is expensive. That power has translated to employees."

Prof. Babcock's research found that people have more success in pay negotiations by highlighting their "promotable" work, the efforts for which the company has created performance metrics. Workers had less success when they highlighted their "nonpromotable work" -- such as mentoring, training or planning events. Nonpromotable work usually is ignored when it comes to doling out promotions and raises, she said.

Take the plunge

Even if your employer isn't able to match your ask or meet all your demands, taking charge of the conversation still sends an important message to the higher-ups that you're confident in your worth.

"It's important to advocate for yourself and be adequately compensated for the world we're living in," said Ms. Giuffrida, the San Diego account manager. "Don't tell yourself 'no' -- let the company tell you 'no.' "" [1]

1.  It's a Good Time Now To Ask for A Raise
Carpenter, Julia. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 30 June 2022: A.14.