At the moment it seems as if every day brings us more news of striking workers, inflation and deepening crisis. Prices are spiraling out of control. Fuel, food and mortgages are crippling families. With all this as the background, what is a reasonable pay rise to ask for right now?
Asking for a pay rise is always an emotive subject. One way or another you are going to be rocking the boat and many people find that idea deeply uncomfortable.
And that’s at the best of times. In the current climate, these emotions are being seriously amplified. We are living in the aftermath of a pandemic that in reality hasn’t completely gone away. And now we are also having to contend with the global impact of Russian warmongering. One way or another these are the most turbulent times the country has seen in decades.
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The pressure this is placing on wages cannot be underestimated. Politicians can argue all they like about the economics of increasing salaries at a time like this. But unless our political leaders do something else to ease the burden of living costs, people are going to be forced to take matters into their own hands. Which inevitably means asking their employers for a pay rise.
But how big a pay rise should you be looking for? What is a reasonable pay rise to ask for right now?
Regardless of what’s going on in the background, the employment market (with the exception of the public sector) runs on the principle of supply and demand. This is the ‘market economy’, meaning that salaries are ultimately determined by unrestricted competition between privately owned businesses.
So whatever role you do, there is going to be a ‘going rate’ that companies will be prepared to pay you as a salary.
Right now, all this turmoil means that the going rate could be a rapidly moving target.
Many companies are struggling themselves
Before we look at working out how much is a reasonable pay rise to ask for, spare a quick thought for the employers. Because most of them won’t be having it easy, either. Their costs have typically gone up by even more than the average family’s as they haven’t received any kind of government support. Many will also be carrying significant debt from the pandemic years. With buyers drawing their horns in, these aren’t rosy times for most businesses.
This matters, because the money to pay you a higher salary has to come from somewhere. Most employers will understand the pressure on you, but a little empathy in the other direction will likely go a long way.
Working out what is a reasonable pay rise to ask for
There is one clear principle you should keep in mind, regardless of the pressures that you or your employer are under:
You should always be paid the going rate for the role you are doing
This is fair, easy to understand, and reflects the realities of a market economy.
It is also a much stronger argument to determine what is a reasonable pay rise to ask for than, say, plucking a figure from the air. Or basing it on what your particular needs are. Which, let’s face it, aren’t really your employer’s problem.
Working out the going rate for your role is normally pretty straightforward.
Simply head to the online job boards and find comparable roles to the one you are doing, ideally in a similar sized company in a similar location (London pay is nearly always higher, for example). Make a note of the salaries they are offering and compare them to what you are being paid. If you are confident the roles are similar, and that you would stand a reasonable chance of getting the job if you applied, then you can be comfortable comparing the salaries.
Right now, things are a little more complex simply because so much is changing so rapidly. You can still use the above method, but you need to keep your wits about you. Look at the different perks on offer, for example flexible or remote working, as they may affect the salary. Check the experience they are looking for in that specific industry and so on.
Once you have a range of representative salaries you can look at all the roles you have researched and work out where exactly you think your current role sits within them. You need to be realistic, but as long as you are then you have found your answer.
The other thing to bear in mind is how good you are at your job. If you are doing a great job and are confident that your employer sees you as a valuable member of staff then there is far less risk in rocking the boat, even in these turbulent times.
To understand more about how to ask for a pay rise in the right way, the best thing you can do is to read my book: Because I’m Worth it: How to ask for a pay rise.
You can find your copy here: Where to buy the book Because I’m Worth it
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