As we head into 2022, many technologists are wondering whether their pay will keep up with skyrocketing inflation. Although the Federal Reserve and other central banks around the world are enacting policies to keep inflation under control, messy supply chains and other macroeconomic issues have caused prices to spike.
Axios crunched data from the Consumer Price Index and the Atlanta Fed Wage Tracker and found that real wage growth has declined over the past two months, eliminating some gains from the summer. “That’s an erosion of spending power, which is a bummer,” read the note accompanying the data. “But for the time being, it takes the edge off worries of a wage-price spiral, which happens when higher wages fuel inflation, which fuels the need for even higher wages—and so on.”
Demand for workers, however, can give job candidates (and current employees) the chance to negotiate for wages that outpace this rising inflation. “A seemingly tight labor market means workers have power to demand pay increases—and there’s no reason they shouldn’t try to grab their piece of the pie,” Axios added.
Given the tech industry’s remarkably low unemployment rate, as well as high demand for specialized tech skills such as cybersecurity and machine learning, technologists everywhere are in a particularly good position to negotiate for compensation that will surpass the current inflation rate. But even if your skillset is in demand, negotiations can sometimes prove tricky; before you sit down with your manager, keep some basic tips in mind.
For starters, you need to demonstrate that your skills provide an immense amount of value to the company—more value than your current paycheck reflects, in fact. In order to do that, you’ll need to come to your manager with data showing how your efforts have translated into significant growth, cost savings, or another metric that impacts your company. For example, if you built an app that generates substantial revenue, or you tweaked the corporate tech stack in a way that saves millions of dollars per year, you have a solid argument for bigger compensation.
Second, you should always stay flexible. Despite the demand for technology skills, companies might not have adequate budget to fulfill your added compensation request. If your manager offers you a deal that covers a healthy portion of what you want, give it serious consideration.
Third, you can negotiate for things other than money. Restricted stock shares, flexible schedules, and other benefits are always on the table. Think about what will make your working experience better—and ask for it. You might be surprised by what your manager will agree to.
Inflation won’t last forever, but it’s a big issue now. Factor it into your calculations as you think about how your compensation will change in 2022.