If you’ve tuned into the news recently, you probably saw that the Bank of England announced that inflation is expected to rise to 5%. If you’re concerned about this increase in the cost of living, you’re not alone. Without a check on rising prices, you’ll have to figure out ways to keep your purchasing power (and thus, the standard of living) the same.
To do so, you can enlist your boss’s help. But what should you say to your boss about inflation? Keep reading to find out.
Why Inflation Matters
The Bank of England has set its target rate of inflation at 2% for quite a while. This figure of 2% is thought to be the rate at which people’s purchasing power and standard of living won’t get affected drastically.
When prices rise at a rate of 2%, the general expectation is that salaries will rise enough to offset most of the inflation occurring. However, at a rate of 5%, most employees, such as engineers, will see a drastic reduction in their purchasing power.
With less purchasing power, engineers may be forced to look at alternative means of earning a livelihood. This may result in a significant number of engineers leaving the industry as well. So, what’s the solution to this problem? Let’s see.
What You Should Say To Your Boss About Inflation
Justifying a Pay Raise
When prices rise, the most obvious way to keep your standard of living the same is by increasing your income. But of course, unless you work for yourself you don’t have the final say in this. While we recommend discussing a raise with your boss, make sure to justify it by putting in the appropriate effort.
Asking for a raise is only a good idea if you think you qualify (or soon will qualify) for it. Have you been working at the same job (and at the same salary) for a while? Are you a good employee who has demonstrated a consistently good work ethic?
As lateral skill sets become more valuable than ever in all industries, we recommend employees continue to enhance their value by studying new skills and sharpening their professional tools.
This means attending webinars, listening to podcasts and reading books to further your knowledge. If you are able to bring a higher amount of value to your role than expected, a raise is justified much easier.
If this sounds like you already, set up an appointment with your boss so you can talk face-to-face. Before the meeting, write down these aspects of your work ethic and be confident as to why you deserve a raise. Logically think about all the ways your boss may be able to refute it and come up with compromises or solutions to counter these arguments.
Once you do this, you’re ready to ask your boss for a raise.
If You’re Not Comfortable Asking for a Pay Raise
It’s possible that talking to your boss either won’t help, or you don’t feel confident enough to ask for a raise. In that case, you still combat the effects of inflation by looking at the following strategies.
While this is good practice regardless of inflation, a sudden change in the economic environment sometimes warrants a re-evaluation of personal finances. In times of economic upheaval, priorities can change both in spending and investments.
Take a closer look at your investment portfolio, your cash flow and of course your personal spending. If needed, seek help from a professional in order to more efficiently manage your finances. If you manage to negotiate a pay raise based on your added value and worth to the company, make smart decisions with the extra salary. While some of it can be used to offset inflation, it can also be used to offset future inflation by educating yourself on proper investment strategies.
An inflation rate of 5% means prices are rising dramatically. So, if you want to stay afloat on your current salary, consider practising a minimalist lifestyle. This means you drastically reduce your spending.
A minimalist lifestyle means you forego most, if not all, of your luxury expenditure. Instead, you buy only what you need and take great caution to not make unnecessary purchases.
You’d be surprised at how much practising minimalism can help you deal with inflation. In addition, it’s also extremely good for the environment because you’re reducing waste.
The prospect of 5% inflation is definitely scary. Prices rising to such high numbers will have a huge impact on all employees. Luckily, you can get ahead of the curve and minimise the adverse effects of inflation by doing any of the things we’ve outlined above. As long as you try to increase your income and reduce wasteful expenditure, you’ll be fine during the inflation surge.
Author: Alex Cole is a Specialist Building Services Recruiter with Responsum. He’s always interested in networking with Building Service professionals. He loves talking football, is hoping to get on the property ladder soon, and visits Tenerife every year!