Here's The Key to Getting a Good Raise
Congratulations, you’re getting a raise! Now, the bad news: It probably won’t be more than the paltry 3 percent you probably got last year.
In a new survey of 967 employers by Willis Towers Watson, 98 percent said they plan to raise salaries this year. Most employees—including executives, hourly employees and salaried workers—can expect around a 3 percent bump, the survey found.
Employers are cautious about giving raises, and even as some complain of trouble hiring as the job market tightens, few feel pressure to pay their employees more, said Sandra McLellan, a researcher at Willis Towers Watson.
A sliver of employees will, however, see a bigger bump on their pay stubs this year. So-called star performers, those who score highest in performance ratings, can expect, on average, a 4.5 percent salary bump.
With skills that have become highly sought in today’s job market, these are the people—fewer than 15 percent of the workforce—employers are struggling to hire and retain, the survey found. “There is a lot more attention paid to, ‘What do we really do for our star performers?’” said McLellan.
Often, that means more than an annual pay bump.
Employers have begun to rethink how they compensate their workers. The annual raise isn’t much of a motivator—an additional 3 percent doesn’t make a huge difference for employees, day to day—and it’s not exactly cheap for employers, either. Instead, they’re turning to bonuses to keep their star performers around.
In 2010, fewer than half the organizations surveyed by WorldatWork, a professional association for people in human recources, were giving spot bonuses to recognize stellar employee performance. Last year, almost two-thirds did.
Employers are trying to think up other ways to impress employees, including increasingly plush benefits packages. “They’re thinking about what to do with their bonus programs,” said McLellan. “They’re also thinking: ‘What is the total package?’”