Short-term inflation is currently running over 6%. Wage gains, on the other hand, is running an average of 3.2% for 2021 and projected to be an average of 4% for 2022. High performers can expect a higher wage gain, but probably not much more than 6%, equal to this year’s inflation rate. So, what do you do?
Some facts and projections:
- Prices for food and many others goods are rising equal to 1962’s highest rate of inflation
- The supply chain is expected to unwind in 2022 leaving a problem the first half of the year
- Productivity (how well we perform on the job) is down by 5.2% in the third quarter of 2021
- That is the largest decline in productivity since 2Q of 1960
- Labor costs have gone up by 9.6% due to inflation
- In a recent survey, 76% said inflation was the biggest problem over unemployment (21%)
- Weak productivity and rising costs are a problem for you and me
While the stock market has shown brilliant resiliency, it can’t last too much longer without a rebalancing of some fundamental concerns, like inflation, productivity and company earnings. These factors are more important now than unemployment. Why? Because when inflation begins to hurt individuals enough, they move from the unemployment line to a job, or if employed, they will seek a higher paying job or ask for a bigger raise in their pay, or move.
Some actions to consider:
Prepare yourself with multiple options:
- Check the marketplace for similar functions and also jobs one level up, as in a promotion
- Find out the value of your job by comparing it to others in the same and different industries
- If you’re underpaid in your current job, document your measurable results over the past two years and talk with your manager about a raise or promotion.
- Check out what other companies are paying for a similar function. Is it the same or better?
- The best job would be a promotion in your own company. Second best: With a competitor.
- Why a competitor? You understand the industry and don’t need a lot of training for value
- A nice raise with your current company would take third place. However, if you get a 10% raise with your current company, but another company would pay 20% or 30% for your skills and experiences, a family discussion will give you the answer you need.
- A word of caution: When considering a move, always look at “total compensation” rather than just “annual pay”. Your annual pay may be $75,000, with total compensation of $85,000, but with another company total compensation could be $100,000. The difference is in the cost of benefits to you, the 401K match, a year-end bonus, commuting costs (remote or office?), promotional opportunities, training, and others.
Now is a very opportunistic time for you to assess and plan your career moves. Whenever the marketplace is in a state of turmoil like now, the resourceful individual will move ahead.
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