It's simple you find another job. Companies get away with this kind of behavior because employees tend to be lazy and not move jobs. If companies realize that people will leave when they don't make sure salary automatically keeps pace with industry standards and inflation they will adjust their pay practices.

You don't say what industry you're working on but I think it's a fair assumption you're probably an IT of some sort. If so the job market is wide open right now, and it's pretty wide open for any industry. Go find another job that will have the increase that you want.

Not all employers behave this way but it does take a while to find a good one. My employer adjusted salaries late last year outside of merit increases and I received a 6% bump and pay for among other things inflation and just the general pay scale adjustment because the industry has started to pay more due to things like inflation.

Just ask straight up. If they don't listen, and it's that important to you, then leave.

I got a raise at the end of last year, as I do ever year. When they told me what the raise was I immediately responded by saying "That's less than the rate of inflation, this is essentially a pay cut."

And when there was an opportunity to ask questions of the executives I asked "My raise, and I assume the raises of many of my co-workers, were less than the rate of inflation this year. Will you consider cost of living adjustments to our compensation?" The answer was usual business speak about paying competitive market-rate salaries and whatnot.

Good luck with that.

Chances are your salary and potential raise was budgeted long before the inflation hit, so a non-merit raise of 5% is not in this year's budget. Unless you have a particularly benevolent organization with funds enough to raise salaries 5% across-the-board it is unlikely that you'll get it. Or, they'll give people cost of living increases, that will pull funds out of the merit raise pool, so no merit raises will be offered, or will be considerably less. They may justify it by saying that inflation hit them too, and everything the company needs to buy to operate got similarly more expensive, so there is no extra money to splash for 5% cost of living increases across the board, and that "we all need to take the hit in the best interest of the company."

And, more cynically, they're getting you 5% cheaper now, so there is not a ton of incentive for them to pay you more, since you'll probably stay, or are easy enough to replace at the same or lower salary.

In my experience, you will not get anything productive out of such discussions. When your salary drifts too far, go audit your salary with an external offer. Ask for a match or leave. Spare your current employer the drama.

Disclaimer: Armchair economist.

Having salaries automatically track inflation can actually lead to more inflation. When Australia had double digits inflation in the 1970's, one of the first things done to fix the problem was making sure salaries stop tracking inflation.

Frankly, you don't these days.

You job-hop after 1.5-3y and end up getting a nice 15% or higher boost to your salary.

As a converse, when they replace you, they'll have to pay higher market rates. Thats because businesses do the same to employees as customers: the longer you stay the more they'll charge you (or the less they'll pay you). They do that because you're "captive". They count on you on being 'sticky' and not have the wherewithall to actually change.

If deflation occurs would you ask for a pay reduction as well? Probably not.

But, at the same time you have to do what's best for you and your family. Easiest thing is just to have a straight up conversation with your manager and see if you can get a timeline for a response and specific actions that will be taken in pursuit of this. Be prepared for "no", and be prepared to have to find a new job. In the vast majority of conversations I have with people on this topic, they have to find a new job to get a higher salary, unfortunately.

As a strong performer you'll generally do much better if you negotiate based on market rates.

How much more would you get paid by another employer? How much more would your current employer have to pay to backfill your role?

If you want to signal loyalty, phrase it as "I really like what I'm doing here but it's distracting to know that I may be giving up a XX%-YY% pay difference"

If your employer can actually fill your position without paying 20+% more or losing several months of ramp up, maybe you are being paid well regardless of the year over year CPI.

Can ask for anything. Stuff costs more is a you problem, not a them problem, until you actually quit though.

Every year you stay, expect your compensation to drop further below the wider market. Then when you move it gets reset to some point vaguely correlated with the market.

It's also way easier to move than to fill out a "promotion packet" or whatever corporate nonsense is in the way of internal ladder climbing.

This obviously sucks. Management know it, engineering knows it. Maybe it'll stop being the case at some point.

First, it's a bad idea in general to tie your salary to outside economic conditions. If there's a recession, are you going to volunteer to take a pay cut? You should focus on the value you add and your increased productivity to justify a raise.

Second, it's bad to tie your raise to inflation because inflation is very real but very distributed. Here's the CPI for the USA: https://www.bls.gov/cpi/ Note that the change in March was far larger in energy than in food. Are you going to try to map your usage of goods to determine your personal rate of inflation and ask for that size of raise? I hope that sounds silly to you; it sure does to me.

If you want to ask for a raise, point to your productivity and dedication to the company, as well as what competitive comp looks like. Surveys are great for that.

Most employers want to be at market rate or above for employees they want to keep. Bringing in inflation just confuses the issue and makes it look like you want something for nothing.

Although engineers have been bring this subject up lately, its a complete non-issue. The only group its truly a problem for, are those paid minimum wage. And minimum wage should definitely be adjusting

If you're making more than minimum wage, then the only thing setting your compensation is the job market. Not inflation, not how much a house costs in your city, and not the fact you just had 3 kids in 3 years

If you can find a job that will pay you much more, you probably already could have when inflation was 0%. So again, this has nothing to do with inflation. Are you looking to maximize your income? Interview interview interview, if you get better offers, bring them back to your company or just leave. If you don't get better offers, why would your company adjust your income by 5%? A 5% pay cut is great news for them and for you, if thats what the job market is saying is your fair pay

As a people manager, we are well aware of inflation and real income. At least at my company we don't have complete control over annual salary changes, though. This year we were given a mean increase of X% that we had to hit for the team, and I can say that X was less than half of 5.

"Hi boss, I hope you had a good weekend. There is something that has been bothering me. I can see that inflation has started to increase quite significantly, and I wanted to know what the company policy was wrt salaries. Can we schedule a chat to talk about it? Thanks much".

I also want to point out that inflation at 5% doesn't mean your income needs to go up 5%. Let's take $100k, say you pay 25% tax. That's $75k left. Let's say you have a mortgage, car payment and those are fixed. $35k. Let's say you save $10k. That leaves you with $30k. For your case, you only need a raise to have $1500 extra. So a new salary of $102k or 2% raise. I'm not trying to make case for employers, just want to point out that you might not be losing money at rate of 5% yearly by earning less. The real loss actually comes from your savings in the bank earning 0%.

So will you rather 2% raise and earn 5% on your savings or get 5% raise and earn 0% on your savings?

you don't. You just leave.

Gone are the days wher you stay for 10+ years...Its move every 2-3 yers for career progression and salary increase. Of course if you're happy where you are then fine.

>inflation for the year is 5%

RANT: No, that's a Scalar. Inflation is a vector. To accurately state inflation, you have to sample the prices of everything in a basket of goods, define the items in the basket, and never allow arbitrary substitution. I know of no such extant measure. Even then, the scalar produced is only accurate for that particular set of goods, and nothing else.

Thus actual inflation is unknowable, and all statements with a single number are propaganda. /RANT

There is only one way to do so with a 100% success rate - get another offer and show it to your boss. Even if he says no, you still get the raise :D

On the other hand if the raise you are asking for is above current market rate (which could easily trail behind inflation), you don't really have much options.

Ask for a more stock option heavy pay package with less base pay. Stocks generally perform better than cash in inflationary environments, but of course they carry risk as well because of their volatility.

Yeah just say "with inflation this raise is actually a pay cut" and if they don't do anything and that bothers you... start looking

To my knowledge, universities and government agencies automatically raise salary across board to match inflation, but usually not as high as 5%.

"I need a 5% raise because inflation is 5%" and then stare at them and don't say anything until you hear what you want to hear.

If they give you 3% or something, say "so I'm getting a 2% pay cut" and tell your boss every couple days you're not happy with taking a pay cut. They'll figure it out

Was your inflation 5%? If you drive and eat meat at average levels then it might be, but if you drive more than average or eat mostly meat then it might be more than that. It seems like you are overreacting to economic metrics and at $100k/year should be able to manage these fluxuations yourself.

Make the point it’s cheaper to match inflation than to source a replacement

Just put on a mail first.

Hi, [their name].

I love working for [company name], and I'm excited about the future of our team. As you know, we're a small group of passionate people who take pride in our work, and I'm grateful to be part of this family.

As you also know, inflation rates are rising, and it's becoming more difficult for me to keep up with my basic needs. I've been here for three years now, and I believe that my skills have grown considerably since joining the company. With this in mind, I'd like to ask that you consider matching the inflation rate moving forward, starting from next year.

I'm aware that you already gave us a raise this year. However, as you mentioned at the time, that raise was based on performance reviews and not pre-emptive of future rates. I understand that it's difficult for companies to predict economic trends—but as a small business, I think we can both agree that flexibility is one of our greatest strengths! Don't hesitate to let me know if there's anything else I can help with in terms of making the case for an increase.

Job hopping is needlessly stressful. High turnover in software occupations leads is a root cause of low code quality. It cements the dysfunctional management practices you see decried on HN every day.

Organize a union in your workplace and prepare to take escalating collective actions to protect your standard of living and working conditions.

https://www.code-cwa.org/

My coworkers and I have done it and would be happy to advise anyone in a similar position.

You have taken a pay cut only if you haven’t figured out a way of saving part of your income and putting that into assets that beat inflation. If you spend the entire income and don’t save (and not even paying a mortgage to acquire an asset), then yes, you have taken a pay cut. That may be poor decision making (depending on the situation), especially if you’re earning $100,000 (which puts you in a tiny percentage at the top of the world in terms of income).

Inflation directly affects what you spend money on. You can choose to spend on other things that don’t suffer as much from inflation, but that may not be easy. On the other hand, how much you save from your income and where you put that is a lot more (relatively speaking) in your control.

Employers will match salaries based on supply, demand and other factors affecting the business. Inflation could affect the supply and demand equation, but is not a direct factor for them to consider. Companies exist to maximize profits. That also means paying the minimum possible to a person and extracting the maximum value from that person. Changes will happen when this equation is under threat.