In an unexpected twist, average wages in the UK are rising faster than inflation, providing employees with a unique opportunity to secure a pay raise. Recent data from the Office for National Statistics reveals a remarkable 7.8% increase in regular pay between April and June, marking the highest annual rate since 2001. At the same time, the headline rate of inflation dipped from 7.9% in June to 6.8% in July.
Seizing the Moment: How to Request a Pay Raise
With wages on the rise, the time is ripe for employees to explore the possibility of a salary increase. But how should you go about asking for one?
The Power of Negotiation
Laura Suter, head of personal finance at AJ Bell, cautions that decreasing inflation rates may diminish employees’ bargaining power. Nevertheless, many employers are still considering pay raises. According to the Chartered Institute of Personnel and Development (CIPD), human resources executives anticipate increasing basic pay rates by a median of 5%, consistent with previous quarters.
The Debate Over Pay Raises
Although a pay raise can be enticing, it’s essential to consider the broader economic implications. Increases in wages can lead businesses to raise prices, offsetting higher fixed costs, and potentially slowing down the decline in inflation. Bank of England governor Andrew Bailey and Chancellor Jeremy Hunt have both voiced concerns about the impact of high pay settlements on inflation.
Research and Preparation
Before approaching your employer for a raise, conduct thorough research. Discreetly inquire about colleagues’ salaries in similar roles and use resources like the ONS calculator, Glassdoor, and Google to gauge typical earnings in your field. Build a compelling case supported by financial achievements that demonstrate your contribution to the company’s success.
Requesting a Meeting
When you’re ready to request a pay raise, arrange a meeting with your boss. Prepare a script and practice your pitch to boost your confidence. Present your request clearly and assertively without appearing overly aggressive or demanding.
Timing Is Everything
Timing matters. Consider the financial health of your company and choose a moment when you can demonstrate your value to the organization. Ensure your request aligns with the benefits you bring to the business.
Be Prepared to Negotiate
Your employer isn’t obligated to grant a pay raise, so be ready to negotiate. Start with a higher request before potentially lowering your expectations. Instead of threatening to quit, explore other potential benefits that could enhance your overall compensation package.
What If Your Request Is Denied?
Rejection isn’t the end of the world. If your boss declines your request for a pay raise, explore other avenues for career development and professional growth. Be persistent, set clear objectives, and request periodic reviews of your progress. Consider opportunities elsewhere if your current employer can’t meet your expectations.
Don’t Forget Your Leverage
With a high demand for skilled workers and persistent inflation, employees hold a strong negotiating position. Don’t hesitate to remind your employer of this fact, and keep exploring opportunities that align with your financial goals.