And we should be lucky to have a job too, right?
3% is about right for me, I need a promotion to get into a higher pay band. but 3% is about all I can get with my pay cap where it is.
OTOH, my son has 0% for the 2nd year in a row.
I’m getting 3% due to my contract and then 1.5% of my new pay rate will go towards my benefits
Our base (satisfactory, average performance) is 2.5% and 3.0% is considered in recognition of going above and beyond. Since I just got that, I like to think it’s a good raise. 
–non-profit sector, and I just finished ten years here
You guys actually do 0,5% raises? What?
A 3% raise would have been greatly appreciated. As it is, I am just grateful to be employed. With health benefits.
The reality is if you are working for a company that isn’t growing in a stagnant economy, it’s unrealistic to expect anything more than a token raise. Where do you think the money would come from? If, OTOH, your company showed 20% growth and you are a good performer, you are justified in wanting a larger raise.
I think 3% would be ok for a cost of living increase. But for an actual pay rise? It’s pretty poor. But of course, I’m sure it varies depending on the area you live.
Well, no. 94-95% of people who want a job have one so it’s not a big accomplishment.
However, it’s just inexplicable to me as to why anyone would expect a raise just because they worked at a job for a year. Your reward for doing your job is your paycheck. Unless you excel in your job - REALLY excel, not just show up on time and do a good job, because doing a good job is a minimum expectation - or take on new responsibilities, or get promoted or some such thing, or prove through your accomplishments that you were underpaid in the first place, why should someone expect more money than a cost-of-living increase?
I’m not even sure what the cost of living increase was this year. It feels like it was a lot. Does anyone know the actual figure?
In the United States it was 4.5% over the twelve months preceding May 2008; I think I cited it as 4.2 upthread a little, which was a mistake, sorry. That is quite unusually high, and is likely entirely due to fuel costs, which hike the price of virtually all consumer goods. Remember: If you bought it, a truck brought it.
I realize 4.5% doesn’t seem like much; if you felt a price increase you probably think 4.5’s not much, like “man, it felt like ten.” But 4.5% is actually a very dramatic CPI increase indeed; it’s equivalent to a $2250 pay cut on a $50,000 salary, so if you don’t at least get a COL increase in your salary you’ll soon be hurtin’ for certain. In most years in recent history it’s been fluctuating between 1.5 and 3.5 percent; 4.5 is the highest it’s been since 1990. So 3 percent actually doesn’t quite cut it in the USA in 07-08, but would most years.
Of course, CPI is an average. Different people will feel it differently. Since much of the CPI jump in the last few years is fuel, you will feel it more if you’re a commuter in Los Angeles, less if you take the subway to work in Manhattan.
In 1979 it was 13.3 percent. Ouch.
In Canada I believe it’s sitting roughly around 2 percent, again due to commodity prices. For a few years prior to 2008 it was consistently one and a half. May 2008’s figure was 2.2% (prorated annually, not just in that month!) which is quite high by recent Canadian standards. I don’t know for sure, but I would assume recent upward trends are less pronounced in Canada simply because Canada is a commodity-heavy economy; Canada gets a disproporationate boost to its revenues from high commodity prices.
Well, assuming it’s not a job that any moron can do, one would presume that someone with a year experience is more valuable than a brand new hire. Doing a good job may be the minimum expectation, but a lot of people don’t even meet that. It is more cost effective to give you an appropriate raise than to hire your replacement and hope they do at least as well of a job.
And finally, if the company as a whole is successful, I don’t think it’s unreasonable to expect to share in the success of that company.
Well, sure, I agree with that… to a point. A company has to be at least reasonably successful to survive, after all, and if salaries are jacked up every time the fiscal year shows a nice profit, what’s going to happen when there’s a tough year?
Well, I’ll tell you what happens; people get canned. My wife’s company did exactly this. Things were consistently quite good, and they got ludicrous pay raises every year - ten percent, fifteen percent. When 2007 was a bad year, the salary structure was such that they simply could not afford the workforce, didn’t have enough extra money in the war chest, and had to have pretty significant layoffs. If they’d been careful with salary increases, they would not have had to lay off as many people as they did, if any at all.
I’m a big believer in paying people as much as you can, but within good business sense, and this “I think I should get ten percent a year for not goofing off” attitude you see a lot, especially in young people (and this is coming from a guy who’s still on the happy side of 40) is just insane.
If the company’s doing well, I’d be more inclined to attach that performance to a bonusing system. Pay raises should be tied to exceptional performance, not last year’s balance sheet, because a raise is forever but last year’s profit may not happen this year, or next year, or in the next five years. A bonus is a much more logical choice; if the company does really well, the employees get a predetermined slice of the extra pie, which you can then adjust for personal performance if you want.
The base raise rate is 2.5% for pretty much everyone, I guess unless there is a serious problem.
If your boss wants to recognize above and beyond work, you get >2.5%, up to 4% I think it was this year. My boss had to ask for the 3% as a special case to recognize those of us who exceeded basic expectations.
I’m inclined to agree. My last job was like what you described. It was in a niche industry that was showing explosive growth. Not only did they give out big raises and bonuses (I doubled my salary over the course of 3 years), they handed out promotions like candy. If you did a good job and were part of the “club” you got promoted each year creating a glut of 27 year old senior managers. In typical small consulting firm form, they pretty much assume they will continue to see 15-20% growth forever.
One of our competetors was even worse. They started hiring our people away from us with vastly overinflated salaries. And then they lost 75% of their stock value through a combination of fudged balanced sheets and overestimated earnings. Apparently they thought everything in their pipeline should be considered potential revenue.
3% is pretty standard this year. I work for a very large company, and the average raise this year was exactly 3%. Most companies are currently seeing financial results a little weaker than they’d hoped for, and they are being cautious as a result. There are fears of recession, which would drive layoffs, and no companies want to bloat up their payrolls when they may be looking at laying people off next year or the year after. They’d rather hold the line on wage increases this year and try to keep as much of the workforce as they can.
Also consider some deflationary sources, like falling house prices. Someone who bought a house in 2005 could very well have spent more for all of 2005 than someone who bought the same house and the same items in 2008 spent in 2008. 4.5% under other deflationary pressures is amazing.
I’m currently awaiting my Department’s pay deal to come through, but I imagine it will be in the region of 4-5%. Not great but better than nothing. In government your pay is guaranteed to go up every year, just not by very much.
I’d also add that it depends on your company’s bonus structure. I got a 3% raise two years in a row, but I also maxed out my bonus and got 20% of my overall salary last year. The year before, I think I got 10 - 15%, so from year to year, it worked out to be at least an 8% “raise.” And given that most people in my field move up within 2-3 years, with my first-year bonus being the high end of average the first year, it’s generally a pretty decent increase year over year, as long as you’re in the right political environment to get promoted (and deserve a promotion, of course) and as long as you make sure you’ve worked smart enough and well enough to get all of your bonus.
So, no, 3% is not always a slap in the face - in my area it’s very common and often considered good. If you suck, though, you’ll get no raise and very, very little bonus.
A 3% raise sucks. According to a letter I got from the CFO where work, The CPI rose by 4.1% as of December. In the same letter, they said the staff salary pool would increase by 4% in FY '08. Bastards. So if you do your job, you basically get a pay cut. I never get an avarage review though, so I still got a moderate raise.