Via the NY Times: According to Aon Hewitt’s annual survey on salaried employees’ compensation, the share of payroll budgets devoted to straight salary increases sank to a low of 1.8 percent in the depths of the recession. It dropped to 4.3 percent in 2001, from a high of 10 percent in 1981. It has rebounded modestly since the recession, but still only rose 2.9 percent in 2014, the survey of 1,064 organizations found. (These figures are not adjusted for inflation.) Unemployment may be down but companies still have their ways to drive the good employees away.
At a time when CEO salaries have skyrocketed again the rank and file are getting screwed when it comes to compensation. Raises, when they are available, are putrid as employees pay more for everything from healthcare to fresh fruit at the market.
Over the past 12 months, real average hourly earnings have increased by just 2.2 percent. Since 1979, most of the gains in pay have gone to those at the top of the salary pyramid while, except for brief periods in the 1980s and late 1990s, those in the middle and at the bottom have been losing ground.
In addition, employers are using performance reviews as a way to limit raises nitpicking to find flaws in otherwise great people. To employers it’s still a “buyers” market and it’s all about finding someone to do a marginal job versus retaining a great employee who can add value to the organization.
It’s one thing to love your job, but when your employer essentially communicates that you are not important, via a tiny raise, it’s time to say adios and find an employer who will show you that you are needed via fair value for your services.
Originally published at www.richsmanagementblog.com on May 26, 2015.