Sunday, January 11, 2015

Are You Going to Get a Raise in 2015?

The short answer is maybe, if you play your cards right. 

In 2014, the unemployment rate dropped to its lowest level since 1999 according to statistics from the Department of Labor.  In addition, economists at CNN expect that the rate will drop to a normal level (about 5.2%) by the end of 2015.  This is great news for job seekers, both unemployed and underemployed. 

However, it doesn’t necessarily mean good news for the currently employed.  Despite all of this hiring, the average wage has only increased by 1.7% over the last year according to the government.  This is truly pitiful when you consider that inflation is also hovering around 2%.  This means that the average person staying in the same job actually has less buying power from year to year respective of inflation.  Employers appear to be more focused on bringing in new talent than rewarding existing employees.  But the good news is that you could be in a good position to negotiate for a raise.  

Assuming that you are a reasonably good employee and have been in your position for a while, it would not be unreasonable to ask for a raise.  From the perspective of your employer, it is much less expensive to give you a small raise than to risk you leaving.  According to a survey by, more than 35% of workers surveyed say that they would look for a new job if they don’t get a pay bump.  In that case, your employer would be out the cost of seeking, hiring, and training your replacement, plus the lost productivity in the meantime.  Rewarding you for your hard work is not only reasonable, it makes good business sense.  Just make sure you have facts to justify why you deserve your raise; emotions have no place in a negotiation and could do more harm than good.

The company I work for has historically been very good about giving annual raises for cost of living and performance.  I expect that will be the case this year, as well, unless the senior team has decided that it wants to start a mutiny among the individual contributors.  Raises are usually announced in February, so I should be finding out fairly soon what the numbers will be.  The company has had a good year, and I'm having a lot of trouble not counting my chickens before they hatch.    

Over the four years that I have worked for this company, my raises have been between 2.4% and 3.5%.  These numbers are generated through some complex formula which takes into account the performance of the overall company, the local sites, and the individuals against some relativepredetermined performance metrics.  There is no room for negotiation, but the standard calculation for all employees makes it feel fair-ish.  

For the most part, I had no context for how this compared to the national average.  I just knew it felt good seeing my base salary go up  by any amount.  Having now seen the national numbers, I find myself feeling a little more grateful.  While I am not overwhelming satisfied by my job for reasons that I will not get into here, I do appreciate that I am compensated fairly and can support myself financially.   

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