Chris DiOrio, Chief Procurement Officer for Staples and Professor at Boston College, joins The 411k to share his salary negotiation tools. Chris shares his experience and even helps us practice ‘the’ conversation with a boss.
A cost of living raise or adjustment makes up for inflation. When the cost of living goes up (see CPI) by a certain percentage, employee wages should increase by the same percentage. For example, if the cost of living increases by 2% this year, employee wages increase by 2%.
Consumer Price Index – this looks across the market at prices to measure inflation. You know your aunt that always talks about how she could go to the movies for $1? Or when grandma used to get groceries for nickels and dimes? That’s inflation! The prices on goods went up (inflated)!
Inflation is the general rise in prices over time. The combination of supply shortages and pent-up consumer demand has prices soaring right now. Overall, prices increased 5% in May 2021. We are seeing price increases in airfare, housing, restaurants, rental cars, women’s clothing, and nearly every other industry.
SO MY RAISE?
The end of the calendar year is when most companies host performance reviews and set budgets (and salaries) for the next year. The most recent CPI report showed that the U.S. inflation rate for 2021 reached 6.1% (highest in 30 years). With prices rising across the board, an increase in pay should be a given— otherwise, it’s effectively a pay cut!
With the tight labor market and high inflation, don’t forget to ask for a well deserved raise based on current rates. A 6% adjustment should be the base for your discussion and then talk performance bonus plus market rates!
Danielle Evans, aka Dollars with Dani, joins us to share her wisdom on how to research market salaries and negotiate a job offer to get what you want. The job market is hot right now and economists are calling this period The Great Resignation. With people transitioning jobs in record numbers, it is critical to know how to negotiate for appropriate compensation. Don’t miss these tips from an HR insider and money coach!