When I advise women on getting a pay raise, the Cost of Living Adjustment (COLA) is not counted in the request. Instead, COLA is to be viewed as a minimum starting point for pay advances. Why?
Cost of Living Adjustment (COLA): Periodic increase in wages or salaries, to compensate for loss in purchasing power of money due to inflation...also called cost of living allowance. Business Dictionary
Because the COLA pay increase merely reflects inflation. If your salary only keeps pace with the cost of living through a COLA increase, and there’s no added purchasing power, then it’s not a bona fide pay raise. Your salary is, in effect, stagnant.
So yes, COLA is technically an increase, but in my view, it is not a raise in pay.
Ideally, a COLA is issued to everyone, every year. And, for those whose job performance earned it, a Merit Raise or Variable Pay is added to COLA. Again, that’s the ideal.
In a not-so-ideal work setting (maybe yours?), COLA may be the only increase your employer gives each year to all employees.
Women tend to be more compliant in their behavior than men and accept what they’re given without challenge.¹ So if your employer says there is no merit raise system and COLA is all everyone gets, it’s easy to accept that as just the way it is.
Publicly, and for the employee masses, that’s probably true. But recognize that there are employees with negotiating know-how and leverage who make individual arrangements to secure better pay packages.
And it’s happening where you work.
These are employees who know how to get what’s sometimes called an i-deal. It’s nothing made by Apple; i-deal stands for Individual Deals. I’ve seen them happen, I’ve made some happen for myself, and in the last 20+years, I’ve helped countless people get Individual Deals in the areas of flexible work, maternity leave, and higher salaries.
In my role as a flexible work advisor for more than 20 years, I’ve had literally thousands of customers get i-deals for flexible work arrangements using my proposal templates. They were often the first and only to have a telecommuting, part-time, or job sharing arrangement in their department.
Also, there have been several instances of women using my maternity leave proposal to get some weeks of paid maternity leave where there was no policy, or more weeks of paid leave than what the policy dictated.
The fact is, you could probably craft an i-deal for yourself, too.
If you expect to obtain a true pay raise, you need to shift from being passive about pay and instead take a proactive approach to getting a raise; it’s time to ASK for more than a COLA.
Are you paid below market value? If you are, campaign for a Competitive Pay Raise. That can get you a hefty hike of 7 to 10% or more. (I’m not kidding; several women who followed my Pay Raise Process℠ have reported back these types of results. One got 14% during the height of the Great Recession!)
If you’re an outstanding employee, and especially if you’ve added job responsibilities or had an extraordinary job achievement, go forth with your quiet campaign for a Merit Raise or a Variable Pay increase.²
Follow the Pay Raise Process at Pay Raise Prep School for Women and you’ll do far better than a COLA; you’ll get a real pay raise.
¹ Linda Babcock and Sara Laschever, Women Don’t Ask, pages 35; 54
² These three types of pay raises are covered in the Master Class at Pay Raise Prep School for Women.