Throughout 2023 a main talking point for many economists has been that wages are rising in Canada—but not fast enough to fight inflation.
Statistics Canada has not released this year’s numbers, but last year’s numbers reveal that consumer prices rose faster than average hourly wages on a year-over-year basis from October 2021 to April 2022, so Canadians experienced a decline in purchasing power. Data from July 2021 to July 2022 shows that there was a 7.6% increase in consumer prices, while average hourly wages rose 5.w2%.
This example highlights hourly workers, but the effects are being felt across Canada’s socioeconomic spectrum.
So, what are employees to do? They need more money to pay the bills every month, plus RRSPs, TFSAs and RESPs to consider.
I spoke with two Human Resources (HR) experts, and we dug into the best ways to ask for a raise, talking points to avoid, plus 2023 trends:
How to Ask for a Raise
Be Honest
Allison Venditti, Founder of Moms at Work, suggests simply being honest. “Inflation is high. Food prices are high—the money must come from somewhere. Can we talk about an increase?”
Some employers will say “no”, and that’s OK. From there consider asking for compensation that isn’t monetary. If the company can’t pay you more, can they adjust for a 35-hour work week? Or more vacation days? Potentially some equity in your company?
Venditti points out that executive compensation is typically a mix of money, equity and various benefits and perks. Think along those lines.
Showcase Your Successes and Extra Responsibilities
“Come to the conversation with examples of your successes and how you have added value to the organization since your last increase. If you have data to back that up, even better,” says Allison Wilson, an HR professional with over 20 years of experience.
And showcase extra responsibilities you have taken on in your role and projects where you’ve made a direct impact on the business or with clients.
Things to Avoid When Asking for a Raise
Avoid Ultimatums
“Ultimatums are never a good idea. If you approach the conversation with ‘I’m going to leave if I don’t get this raise…’ it usually doesn’t work, and you must be prepared to follow through on any ultimatum. Either way, it doesn’t position you in a positive, collaborative light,” says Wilson.
Plus, ultimatums come across as threatening. And in general, that approach doesn’t work well, not only at work but in interpersonal relationships as well.
Avoid Comparing Yourself to Colleagues
Both HR experts pointed out that it’s not a great strategy to compare yourself to colleagues.
Don’t say, “I deserve a $30,000 raise because Ahmed received a raise two months ago.” It comes across as unprofessional, turns the conversation negative and leads the focus to a colleague—when the focus should be on you. Point out your successes, goals, and aspirations within the organization instead.
2023 HR Trends in Canada
“It depends on the industry; however, most companies are still being conservative with their budgets and increases are perhaps not as lucrative as pre-pandemic, especially given how the economy is still being seen as slightly unstable. However, I do think that trend will change in the next year or so,” says Wilson.
Venditti agrees. “Underpayment is absolutely an issue right now. And I feel bad for managers. They’re losing people and not replacing them. They’re also promoting people to manager and not being properly compensated.”
Weigh the Pay Against the Ability to Work From Home
Both experts point to remote work. Venditti says some companies are demanding people back in the office and she is genuinely surprised. She says it doesn’t make sense. Employers must trust their employees, and by saying “You must work in the office” you’re saying: ‘We don’t trust you.’
Wilson says that, yes, employees are demanding more flexibility, work-life balance and the ability to work remotely or at the bare minimum a hybrid model. She adds: “If the job can be done efficiently from home, and the employee is just as productive, I think the days of working in an office 5 days a week are gone.”
The coming months will reveal what’s in store for Canadians in terms of companies demanding employees back in the office full-time. However, as both HR experts point out, employees aren’t moving in that direction even though companies are.
