After all my worry and strategizing about corporate buyouts, Borders’ bankruptcy and discrimination against unemployed job seekers, I’m thrilled to bring you some good news today:
Raises are back, and they’re bigger than expected – especially for top performers.
Workers “who far exceeded performance expectations” received merit increases of 4.0 percent last year, compared to 2.7 percent awarded to staffers overall, according to Towers Watson, a benefits consulting firm.
They may receive even more in their paychecks this year. Merit increases overall are predicted to reach 3.0 percent, the highest levels since before the financial crisis of 2008, Towers Watson reported this week. That is ahead of salary increases forecasts by the Conference Board and others, based on surveys last spring and summer.
The 3 percent average raise is a promising reversal from the pay freezes or reductions, furlough days and more of the last few years, when raises were as skimpy as some exotic dancers’ costumes. As the economy got sicker, many firms uncovered ways to skip raises, or pay their best a small merit increase, by denying the lowest ranked worker any raise. (That trend of giving those at or near the bottom nothing may continue, and definitely shows up in the Tower research.)
Companies definitely have pumped up pay-for-performance for workers at almost all levels. Only 11 percent of U.S. employers give cost-of-living increases, according to WorldatWork. a nonprofit human resources organization that focuses on employee rewards.
WorldatWork also has identified another intriguing trend: Raises vary based on geography. Top performers in San Jose, Boston, Portland, Seattle, Houston and Detroit were expected to receive raises of 4.0 percent or better, well above the national average of 3.7 percent. That’s according to WorldatWork’s survey last year of 2,497 HR members.
Even if you don’t live in one of those areas, you may find yourself in higher demand this year. Slightly more than half of the 381 large and mid-sized U.S. employers Towers Watson surveyed in late January say they’re having trouble finding “critical-skill” workers. One-fourth are worried about keeping their best staffers on the payroll.
No wonder they’re planning to offer more generous raises this year.
My Glassdoor.com post offers advice on building the case for a raise this year.
Turn a job offer into higher pay at your current employer by following advice from The Ladders.
Dig up details on salaries and benefits. My Washington Post piece shows how to set three salary numbers for yourself.