The risk of a recession may be on everyone’s mind, but human resource agencies say now is still the best time to approach your employer about a raise if you’re trying to make up for the ballooning cost of living in Canada.
Inflation showed signs of slowing in July after hitting a nearly four-decade high in June, but the consumer price index still increased by 7.6 per cent compared with the previous year as the cost of gas, rent and dining out continues to bite into people’s spending power.
Robert Hosking, senior regional director at the HR consulting firm Robert Half, said that despite an uncertain economic picture in recent months, workers still have leverage in asking for a raise, and should start having those discussions now in case the economy does worsen down the road.
“While there’s certainly talk of recession that we’re hearing globally and within Canada, at the same time there hasn’t really been a noticeable slowdown in employment,” said Mr. Hosking, noting that the July 4.9 per cent unemployment rate was a historic low.
“It continues to be an appropriate time to be asking for a raise if you haven’t received one.”
In a survey of 500 Canadian workers this year by Robert Half, 50 per cent said they planned to ask for a raise this year and of those, nearly one-third said they’d ask because of inflation, with another 18 per cent saying they were seeking a raise to bring their pay more in line with current market rates.
Thirty-six per cent of those respondents said they would look for new jobs with higher pay if they didn’t receive a raise.
Mr. Hosking said there are some sectors that will be particularly hard hit by economic uncertainty and the stock market’s recent weakness, such as tech companies or organizations particularly reliant on e-commerce. But, by and large, it’s too early for most employers not to consider raises, he said.
Employers have a lot to lose when it comes to employee turnaround, he added, because the cost of finding and training replacements can be up to two times the cost of a first year’s salary.
Patrick Poulin, group president at Randstad Canada, said employees should always be having conversations about compensation with their boss every year or so.
An employee who wants a salary hike should do their homework before sitting down with their employer, he said. That includes finding out what the same or similar job pays at other organizations.
Mr. Hosking said workers should come prepared with a thoughtful argument as to why they deserve a raise, such as their performance, market rates, and cost of living pressures.
In the case where an employer absolutely cannot increase your pay, Mr. Poulin suggested workers can also ask for things such as more vacation time, better flexibility for working remotely or a four-day workweek.
While he said wages are always the top factor that would lead a worker to change jobs, they should be careful to consider the overall package and work environment of their employer.
If a worker is generally happy with their job situation and the overall flexibility it provides, he said they should be extremely careful that a new employer could match that level of flexibility and work-life balance, even if it pays much more.
It’s really important to look at the whole picture, said Mr. Poulin, adding that workers are always thrilled about a higher salary for the first six months, but that effect eventually wears off, especially if the job also comes with a poor schedule and no flexibility.
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