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Is it reasonable to request that a salary increases annually at least by the rate of inflation in a employment contract, to allow staff to keep salary in line with living costs if there were no official promotions for a few consecutive years?

The contract could be for any job but I am thinking of one in the technology/development sector. It would be a full time permanent position.

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  • If you can get that into a contract then it is absolutely reasonable. If you can get new contracts with at least that rate of increase then absolutely. If you cant then no its not reasonable to expect them to do it anyway. Dec 22, 2014 at 18:35

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You can certainly ask. Good luck. I have yet to have heard of a case where this has actually been accomplished, and there would be work to determine what standard for "inflation" is agreeable to both you and the company. There are always numerous metrics to describe a financial condition, and you don't want to leave this vague if you want it to be effective.

If I were your company, I probably wouldn't agree. The overall rate of inflation of the country/state/industry may not closely match the company's growth in revenue. The money they have earned is the money they can use to pay you, and it really doesn't matter to the bottom line if other companies or people are making more money. If they are willing to commit to growing salaries in some fixed relationship to inflation, then they will be faced with being forced to layoff people when inflation has increased but revenue has decreased.

It's not a deal I would make, but each company makes it's own decisions in this area. Many companies will claim to give "competitive" salaries, by which they generally mean that they try to keep your salary comparative to their competition and to what it takes to retain someone in your field. The question is - how well do they do and what can they share about the pay of actual employees in actual job roles in comparison to current industry standards?

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I think it's entirely reasonable. I also think, though, that it's unlikely.

I've never seen such a clause in a contract and, while it's intrinsically unfair that many of us see our real-terms salaries decrease some (many) years, I think it's unusual for that not to be the case, unfortunately.

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