Most People Won’t Get a Pay Raise in 2017. Here’s How You Can
Workers hoping for a pay raise next year may need to temper their expectations. Employers in the United States aren’t budgeting much for salary increases in 2017, according to a new report from Aon Hewitt.
Companies expect base pay for their workers to increase by just 3% in 2017, a slight increase from the 2.8% salary bumps predicted for 2016. “Challenging business conditions” and a tough global competition are among the reasons employers are being stingy with raises, Ken Abosch, broad-based compensation leader at Aon Hewitt, said in a statement.
Tight-fisted employers could be screwing themselves over if they don’t reward top-performing employees, the report warned. “[A]s the job market continues to improve, stagnant compensation spending could leave many companies in a difficult position in the war for top talent,” Abosch said. “Organizations may need to either re-think their compensation strategy, or emphasize the other benefits and perks they provide as a way to attract and retain the best workers.”
Roughly 10% of companies froze salaries in 2016, up from 4% in 2015. Some companies are thinking about getting rid of raises altogether. GE is reportedly considering ditching yearly salary increases, along with annual performance reviews. Critics of the traditional once-a-year pay bump say the practice is expensive and does little to motivate employees, Bloomberg reported. What might replace annual raises isn’t totally clear, but it might involve more of a focus on performance-based bonuses or other forms of compensation, such as additional time off.
Not only do employers believe bonuses and other forms of compensation are a better way to motivate employees, but they also like those incentives because they’re easy to dial back if business slows down. Cut base salaries, on the other hand, and you might inspire an employee revolt.
The shift toward shrinking annual raises is likely to hit workers at the bottom rung of the income ladder the hardest. Almost all salaried white-collar workers are eligible for bonuses and other perks, the Washington Post reported, but these incentives are far less common for non-union hourly workers. They’re the ones whose income will further stagnate if raises disappear.
Workers who aren’t happy with changes to their employer’s compensation policy may vote with their feet, taking their skills to another company where the rewards are better. But not everyone is able to switch jobs. If you’re stuck where you are, you may still be able to negotiate a salary increase next year. Keep these three tips in mind if you’re trying to get a raise.
1. Go above and beyond
Companies are increasingly tying salary increases and bonuses to performance. Simply “meeting expectations” on your annual performance review may not be enough to get the extra money; you need to show you’re a rock star if you want to get a raise. Take on extra assignments, contribute good ideas, solve problems before they start, and do what you can to make your boss’s job easier. The effort could pay off when you sit down for your review.
“If you give 100% and are paid 100% — what you were promised — you have no grounds for asking for a raise,” Bruce Hurwitz, an executive recruiter and author of Success! As Employee or Entrepreneur, told Forbes. “But if you have given 120%, if your results have surpassed expectations, that is what you focus on because that is why you deserve the raise.”
2. Prove your worth
Even if your company has put the kibosh on raises this year (or is offering raises so small they’re basically nonexistent), you may still be able to negotiate a substantial salary increase. To be successful, you’ll need to prove you’re contributing to the company bottom line. Document your successes over the year so you can demonstrate your value in a conversation with your boss.
“I think it’s always a good idea to ask for a raise, even when employers are not handing them out,” Connie Thanasoulis-Cerrachio, the co-founder of SixFigureStart, a career coaching firm, told Forbes. “But only when that discussion is tied to performance.”
More than half of workers have never bothered to ask for a raise, a 2014 CareerBuilder survey found. Nervous employees may be hesitant about broaching the subject of money with their boss, assuming their request will inevitably be shot down. But keep this in mind: 66% of employees who asked for a raise were successful.
You might assume your boss knows how great you are and is just waiting to reward your performance, but in reality, star employees often need to remind their bosses of their accomplishments. The weird flip side of being really good at your job is that you may be off your boss’s radar, since she knows she doesn’t have to closely supervise you. If you’ve gone above and beyond this year or signed on for additional duties and don’t feel you’re being fairly compensated, remind your boss.
“You probably do a lot that your boss has no clue about,” Suzanne Lucas of Evil HR Lady, told LearnVest. “You have to toot your own horn and highlight how you’re performing above and beyond expectations.”