Earning

'Higher raises are expected for all types of workers' in 2022, says think tank CEO

"The upward momentum around salary increase budgets is likely to continue into early 2022."

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Companies are setting aside more money for pay raises in 2022 than they have in more than a decade, according to a recent survey by The Conference Board. Employers' "salary increase budgets," or the amount they dedicate to salary increases in the coming year, are expected to rise 3.9%, the biggest annual increase since 2008, according to The Conference Board, a nonprofit think tank that surveyed 229 companies in the U.S. from a variety of sectors. More than half the firms had more than 10,000 employees.

Almost half of respondents, 46%, said that worker shortages played a factor in salary increase plans, while 39% cited increased inflation, Steve Odland, CEO of The Conference Board, points out. "The higher raises are expected for all types of workers," Odland says. "Unless something dramatic happens in the next couple of months, these raises will occur."

'Robust wage growth in 2022'

Raises are likely to be broad-based and reach entry-level workers as well as executives, hourly employees as well as salaried ones. "The Conference Board expects blue-collar, manual services, and tech workers to see robust wage growth in 2022," says Odland.

Workers may not have to wait long to see the boost reflected in their paycheck: "Many companies give their raises in the beginning of the year," he says.

Wage growth 'will likely remain above 4%'

There's evidence that this trend may not be short-lived. "In this economic environment, the upward momentum around salary increase budgets is likely to continue into early 2022," Odland says. "Salary increase budgets may be adjusted upwards in the coming months, as more companies adjust their policies to account for the acceleration in wages and inflation."

As inflation continues to rise, workers can expect wages to do the same, according to Odland. It's called a "wage-price spiral, where higher prices and rising wages feed each other, leading to faster increases in both," he says. It "may already be in the works. It is likely that severe labor shortages will continue through 2022. During that time, overall wage growth will likely remain well above 4%."

3 tips for asking for a raise

While some of that wage growth is expected to be spread out across a company, high performers may be able to negotiate a little extra. To improve your chances, it's important to ask for a raise strategically, says Lauren Baptiste, founder and chief empowerment officer at Acheloa Wellness, a career and life coaching firm.

Here are her three tips for making the ask.

1. Know your why. List several reasons why you deserve a raise. "You'll need to go beyond the 'I work late nights, weekends' rationale," Baptiste says. Other considerations may be: "Did you lose a team member? Are you doing more work in their absence? Have you earned or saved your company money? Have you won any special deals? Have you contributed to any special projects? Have you gone above and beyond consistently? If so, when and how? Be specific!" she says.

2. Physically and mentally prepare for the meeting. "When I'm faced with the possibility of rejection, I prep myself physically and mentally. You should, too!" says Baptiste. "Hours leading up to the meeting, I'll usually do a self-massage to calm my nerves, followed by some yoga to clear my mind if I have time." Before the meeting, Baptiste suggests trying a "power pose." Which means: "I hold my arms out wide and take some deep inhales through the nose and exhales out of the mouth. I make myself feel big, which can give me an added boost of confidence to make the big ask." If you're in the office, try your power pose in the bathroom, she says.

3. There's always a 'yes' to be gained. If you're unable to get a raise, "counter by asking for intangibles," Baptiste suggests. "Unfortunately, there are times bosses are financially tied and really cannot give you a financial boost." In this case, "consider asking for nonfinancial improvements, such as more vacation time, additional support, or resources on your team, or getting a reimbursement for continuing education," she says. "Of course money is great, but it's the intangibles that keep us staying with our jobs year over year."

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