The cost of living is continually creeping up, with energy, food and petrol being the main driving forces behind this trend. Inflation currently stands at 10.1%, which is a lot higher than the Bank of England target of 2%.
To help households keep up with the cost of living crisis, the government recently announced the National Living Wage would be increasing by 9.7%, taking it from £9.50 to £10.42 per hour.
Many public sector unions are also going on strike up and down the country to secure better pay increases for their members. All of this talk of pay increases might leave you wondering if you should be asking for a better deal from your boss. If you’re thinking about kick starting pay negotiations, read our guide to negotiating a pay rise first.
Should you ask for a pay rise?
If you’ve found that your salary isn’t going as far lately, you’re not alone. Increases in rent payments, mortgage rates, food prices, fuel prices and energy bills are leaving many workers with a lot less disposable income at the end of each month.
If you haven’t had a pay review for a while, it might be time to think about starting a conversation with your employer. And if you enjoy annual pay reviews, you might want to approach this pay review with a slightly different attitude.
How to ask for a pay rise
Most workers will request a pay rise in their annual review. If you don’t have an annual review policy in your workplace, you’ll need to schedule a conversation with the decision maker at your company. This could be your line manager, head of the company or an HR representative.
If you’re going to trigger your own annual review and request a pay rise, you need to be prepared to defend your position with some key information. Here’s what we would recommend researching before you head into the negotiations.
- Summarise how often you have received a pay review in your current role. Many employees will find that it has been years since their last pay review.
- Check the current inflation rate. This is changing all the time, and you don’t want to walk into the meeting with out of date information. Make sure you have a basic understanding of what this inflation rate means.
- Look at what other companies are offering as a starting salary for your existing role. This can be a key indicator that you are overdue for a significant pay rise. It’s all too easy to get comfortable in a role and be grateful for the security, but if you discover that new starters are being offered a much higher salary, this can be difficult to stomach.
Once you have this information, decide what percentage of a pay rise you would like to ask for. If you haven’t had a pay rise in several years, it wouldn’t be unreasonable to ask for a payrise in line with inflation. However, you might want to use this as a starting point for negotiations and decide that you will accept a lower increase, such as 5%.
Decide what it’s worth to you
If your employer says no to your request, you need to decide what you will do next and what it is worth to you. Some will decide that this is enough to make them walk away from a role. And announcing that you will walk unless you get a pay rise can be a powerful move that could prompt your employer to change their minds.
However, this is a privileged position to be in, and not everyone can afford to walk away from a role. More likely, you will accept this information and then start looking for a new role. Your employer will have to think carefully about letting you go, as they will likely have to offer a higher salary if they advertise your role externally.
Look for a new job first
Another popular way to secure a pay rise in your role is to secure another job with a higher salary first. This requires some planning, but it can help you to secure a higher salary, one way or another.
You will first have to find a similar job with a higher salary and apply for this role. If you are offered the job, you can use this information to request a higher salary from your employer.
You point out that you would rather stay in your current role – after all, you know the job and you like your colleagues – but you are being offered more money elsewhere. It is then down to your employer to decide if they will match the pay offer. If they don’t, you can accept the role with the other company. And if they do, you get to stay put and enjoy your higher salary.
