Picture this! An American gets off a plane at Zürich airport and heads into the city. He has an important meeting with a client but he’s feeling the effects of jetlag. So, he goes to Starbucks and orders a very plain black filter coffee.
He’s flabbergasted. They charged him CHF 5.50.
Welcome to Switzerland! This is a country where the cost of an espresso is sometimes more expensive than one poured in Venice’s glamorous St. Mark’s Square.
So, naturally salaries seem high here. This is after all one of the most expensive countries in the world to live in. And now, it could get a lot more expensive thanks to inflation.
Inflation is back!
Let’s break this down. In the US, headline inflation has reached a phenomenal 8.4% – the highest rate in over 40 years. Meanwhile, in the euro area, the annual inflation rate has risen to 7.5%.
By contrast, Switzerland’s inflation rate is a more moderate 2.4%. This might not seem so high, but you need to remember that this country is already quite inflated.
Switzerland has high property rental rates, expensive health insurance, meanwhile you need to pay for everything from buying a TV licence to watch TV to purchasing rubbish bags. Disposable incomes can therefore, quickly become stretched.
Any inflation that occurs is felt quickly. So, this leads us to a very important question.question:
Should I ask for a pay rise?
The answer is an unequivocable yes!
To live in Switzerland, you need to keep up with the cost of living with a margin of comfort to enjoy life. If this margin of comfort gets eroded, then living here does not make sense.
This is what candidates tell me, including those who are Swiss themselves. This is Europe after all, where talented individuals are free to move anywhere across the continent to live and work.
Talent is scarce in Switzerland
Switzerland has long had a shortage of talent. Furthermore, this shortage has got even more intense since the end of the pandemic.
This might not be apparent as Swiss companies have always been highly selective with who they hire. However, Swiss companies do still struggle to find talent, and this has long been a complaint that I hear.
This is after all a country that punches well above its weight in numerous industries. It has a population smaller than London, and yet it hosts globally competitive companies across finance, pharmaceuticals, engineering, commodities, and numerous other industries.
Good employees are valuable and highly sought after in Switzerland. So, if you ask for a pay rise, it might be accepted.
Most Swiss companies are fighting a battle on two fronts. While they are trying to find talent to hire, they need to also retain the talent that they already have. If they don’t give you an inflation beating pay rise, you could seek a salary increase elsewhere with one of their competitors.
It can feel awkward
Having a frank talk about money can feel uncomfortable, especially if you are happy with where you are. However, this isn’t necessarily about money, but rather the cost of living that you have to meet. Inflation gives you a pay cut in real terms which isn’t fair, so you should talk about it with your employer.
The trick is in how you approach it. For instance, pick a time when you have achieved a big win for yourself. When your line manager acknowledges your success, bring up the subject of pay.
You could also time this conversation to happen just before your company’s payroll budgets are set. This is not usually a date shared with employees, but it often takes place in the Autumn just before year-end.
Understand what you are worth
Often a company will assess how much they should pay you based on salary surveys they subscribe too. So, what you could do is carry out a virtual job search to see what your company’s competitors are offering. You can also use salary surveys or websites like Glassdoor yourself to establish how much you should be getting paid.
The words that you use also matter. Have a conversation with your line manager that makes business sense. For instance, you could say “we’ve had a good year as a business, and I know you appreciate the work I have done. To keep on delivering and help this company grow, I would appreciate if you could bring my compensation in line with X”.
If you don’t ask, you don’t get. There’s no harm in trying even if the answer is no. At the very least you have let your employer know that the status quo is not acceptable. Eventually your employer will need to find a way to satisfy your needs.