As 2022 approaches, many technologists are wondering if their wages will keep pace with soaring inflation. Although the Federal Reserve and other central banks around the world are adopting policies to keep inflation under control, messy supply chains and other macroeconomic issues have driven prices up.
Axios analyzed data from the Consumer Price Index and the Atlanta Fed Wage Tracker and found that real wage growth had declined over the past two months, wiping out some of the summer’s gains. “It’s an erosion of purchasing power, which is disappointing,” read the note accompanying the data. “But for now, that allays concerns of a wage-price spiral, which occurs when higher wages fuel inflation, which fuels the need for even higher wages, and so on.”
The demand for workers, however, can give job applicants (and current employees) the opportunity to negotiate wages that exceed this rise in inflation. “A seemingly tight labor market means workers have the power to demand pay increases – and there is no reason they shouldn’t try to take their piece of the pie,” Axios added.
With the tech industry’s remarkably low unemployment rate, as well as the high demand for specialized technological skills such as cybersecurity and machine learning, technologists around the world are uniquely positioned to negotiate compensation that will exceed the benchmark. current inflation rate. But even if your skills are in demand, negotiations can sometimes be tricky; Before you sit down with your manager, keep some basic tips in mind.
For starters, you need to demonstrate that your skills add immense value to the business – more value than your current paycheck reflects, in fact. To do this, you’ll need to present your manager with data showing how your efforts have translated into significant growth, cost savings, or some other metric impacting your business. For example, if you’ve built an app that generates substantial revenue, or if you’ve changed the company’s tech stack in a way that saves millions of dollars a year, you have a strong case for higher pay.
Second, you should always be flexible. Despite the demand for technological skills, companies may not have a sufficient budget to meet your demand for additional compensation. If your manager comes up with an offer that covers a lot of what you want, give it serious thought.
Third, you can trade something other than money. Restricted actions, flexible hours and other perks are still on the table. Think about what will improve your work experience and ask for it. You might be surprised at what your manager will accept.
Inflation won’t last forever, but it’s a big deal now. Take this into account in your calculations when considering how your compensation will evolve in 2022.