Employees are expecting larger pay raises this year, are you ready?
Lots of media coverage lately about pay raises. CNBC reports that employers are projecting average annual salary increases of 3% for executives, management, professional employees and support staff in 2022, a survey by benefits consulting firm Willis Towers Watson found. That’s up from 2.7% in 2021 and the average 2.8% boosts that were seen for a number of years before the pandemic.
Manual labor and production employees can expect increases of 2.8% in 2022, up from 2.5% this year, according to the survey, which was conducted between April and June 2021. A total of 1,220 companies across various sectors participated.
“What we are seeing today is really a structural shift in labor markets,” said John Bremen, managing director of Willis Towers Watson.
After a tremendous amount of instability over the past couple of years, the labor markets are trying to find a new balance, he said. A larger number of people are changing jobs than usual and companies have higher salary budgets.
“What this leads to is an opportunity that is ripe for employees to self-advocate and help their current employer understand their value,” said Bremen, who added he wouldn’t be surprised if average salaries were higher than 3% next year.
Meanwhile, a lot of employees are choosing to leave their jobs rather than have that conversation.
Blair Heitmann, a career expert at LinkedIn says, “The vast majority don’t negotiate and are afraid to negotiate, but a single $5,000 raise early in their career can turn into hundreds of thousands of dollars.”
Widespread coverage like this sets expectations and so employers should be prepared to have these conversations against the larger backdrop of mass resignations and the continued upheaval of the modern workplace.
Our own awesome HR expert, Lorein Brightwell says this about pay raise conversations this year.
“Heitmann’s point is well taken and akin to the philosophy of being a frequent saver at the age of 20 making you a millionaire with the exponential wonder of compound interest. Likewise, increasing pay where you are now as opposed to the upheaval of a job change can give you the leg up you need to meet or exceed that 3% raise or more in the current labor market. This is another insider technique for those who may be facing the glass ceiling or the perception of lower pay for the under-represented.”
Brightwell continues, “Keep track. It doesn’t have to be fancy or complicated, or you can bring in all the spreadsheets you want…but track it. Did you increase throughput in June 2020 by 11%, in spite of the pandemic challenges? Were you successful in averting a union organization of the employees in October of 2020? How much did that save the company? And how about that time that by simply suggesting a different vendor you streamlined internal processes AND cut costs by 32%!”
Brightwell concludes, “But how to get that raise, you may ask? Typically those in the reluctant camp referenced above are NOT used to blowing their own horn. They do not realize it’s not being braggadocios, it is being FACTUAL and asking for value—the value of their contributions and potential. Employees are advised to write it down, record it, calendar it, and/or keep a journal.”
Business is numbers…your salary is a number…so be prepared for the conversation with quantitative examples (referring to your calendar or journal) and present those positive numbers that represent your value to the company and the reason for your asking for a raise or a promotion. Use descriptive words like ‘saved’ ‘increased’ ‘reduced’ ‘improved’ and put the number and time/timeframe next to it! This should not consume you. You can make an appointment on your calendar at the beginning of each month, and recap (quantitatively) your accomplishments and contributions to the company. Keep a running tab and you will be prepared for THE TALK. That will get the attention you deserve to present your case for an increase.”
And there you have it! Dealing with all employee expectations the RIGHT way is very important for any employer. The super smartest ones KNOW PLB Resources can HELP them deal with any HR situation effectively and get/stay fully in compliance while building that AMAZING workplace!
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