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Are Skimpy Raises the New Normal?
Lam1969 writes "Computerworld just released their latest salary survey, and it finds that IT worker bees have once again only received small raises. The article notes, "IT raises still lagged slightly behind the average of about 3.2% for all U.S. workers as reported by the Bureau of Labor Statistics. While the majority of respondents (69%) said their 2004 base salary increased from one year ago, 31% experienced either no change in salary or had their pay cut." It goes on to quote LAN specialist Stephen Noisseau as saying, "I guess that's the way the cookie crumbles ... I'll take 4% over nothing. We're getting basically cost-of-living raises.""
The only way I can see increasing my pay is to leave this job for another. And this is NOT a good market now to do that.
Would LOVE a 2% or 3% raise once a year or so...
Thats why I always aim for a decent base package before I sign up. I take the approach that I will only work for an amount I am happy with for that position, any raises, bonuses etc are then just icing on the cake as I dont really need them and dont really care. Also stops me from overworking and chasing the pay rise / promotion that never comes (hint: if you want career progression and better pay you have a far greater chance getting it faster by changing jobs than just sitting back and waiting your turn)
Exactly the only way for us to get raises is to find a better paying job. If enough tech workers do this then companies may give higher raises to keep their workforce. Or they (Like my company) will replace these people with people will less skills for less pay and train them with experience.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Good theory, one I'd like to believe in, but remember - in the U.S., it's not who votes for you, but how much money those people put into your campaign coffer. Can't exactly run a national campaign in this day and age without a multi-million dollar advertising budget.
Jeez... W raised over _100_ million dollars in the last campaign if memory serves right. Mayor Bloomberg is a _billionaire_. The _last_ people these politicians listen to are the working class. Sad as it may be.
I'll say once again:
Blue Collar = Organized Labor
White Collar = Disorganized Labor
Democracy is about working together to be treated fairly. Why should corporate profits leap by huge percentages while employee salaries do not?
Abstinence is a government conspiracy. www.SafeSexZone.co
After 2 years of unhappiness and general lack of hope in my current job, my group has a 30% turnover.
I remember hearing over and over that raises where only 2% for the last couple years. In fact, due to cost cutting they stopped collecting the trash cans on a daily basis. Now, instead of individual trash cans in our cubes, we have communal trash cans in the hallways, which are emptied once a week. BTW, we keep having record quarters.
So, when my boss's boss threatened to give me a bad review and no raise, I shrugged my shoulders and informed him that "My annual 2% raise is close enough to 0% that it didn't matter." I then proceeded to tell him that he had a structural problem. The lack of raises provided him with no "stick" and the lack of advancement opportunities provided him with no "carrot."
I have already decided to leave as soon as the first of the year comes around (and I quality for the End-of-Year bonus).
The funny thing. I honestly believe I got a 2% raise last year. That is what everyone says the raises were. I was doing some record keeping this weekend and noticed that I actually got a 8.25% raise last year.
Sometimes perception and reality don't match.
I am still leaving though.
Salaries in India to go up by 11.4 percent, possibly the highest in the whole world.
As a small mobile software developer in India currently looking for fresh business and perhaps adding employees other than myself to the business, this news makes me have second thoughts!
Most CEO's get their pay raises voted on through the board of directors of the company, and any majority shareholders that aren't on the board.
:(
Of course they can all also vote themselves the same outrageous pay raises..
A salary increase cap I doubt you could push through - you'd have to rule out the fringe cases where a guy DID earn $4m bonus a year (for instance, turning a company around from bankruptcy - I imagine a couple of airline bosses are hoping they can swing this)
What I suppose could happen is that salary raises and bonuses are capped based on percentages of profit margins and difference between previous years (if it's profits up, add a percent or two, if profits are down, reduce a percent or two), and written into company charters.
How much could Bill Gates grant himself per year if he had a 3% pay raise and a further 2% bonus on a good year? How about Steve Jobs?
It's probably no better than the current "corruption"
If I am not mistaken, Steve Jobs has an annual salary of $1.00. Considering how much stock he owns and how much money he made in the past I don't think he thinks very much about how much he is getting paid. I think the CEO of Cisco has the same deal.
Z.
Another day closer to redwood heaven
Every time I hear the "in the 90's, people stumbled all over themselves to pay you I.T. guys to do practically nothing" line, it makes me cringe. See, like a lot of people I knew, we stayed here in the midwest during the .com explosion, figuring "Hey, all those modern-era gold-rush people will come back soon enough with their tails between their legs anyway." Instead, we worked hard for our below-average salaries, confident that our commitment to the job and dedication would win out in the long run. Then, many of us got laid off while the scammers and cons came back with millions from stock options, or hundreds of thousands for providing practically useless services to failing businesses. Some thanks we got for "doing the right thing", huh?
Best job I could find after that was a couple years of working in a guy's unheated garage scrapping together used computers for resale cheap to daycare centers and preschools - for less than half of my former, below-average salary. I'm *still* trying to find something that might at least pay close to what I made in '99-2000!
I agree that smart businesses are clued in more to things like "people skills" and "work ethics" nowdays, but from what I've been running into around here - the single most impotant thing you can have is an inside connection. Almost everyone I know in this market who has a good-paying job in I.T. got there because they had a friend in management. They need a decent resume too - but you're just another piece of paper in H.R.'s resume pile unless you have connections who get someone to "pull your resume" and seriously consider it....
I've gone both ways in pay scale. When I worked for a university once there was a stretch of three years when we never got a pay raise. Usually we only got a 1% or less pay raise. When I became an assistant manager I found out what was going on - the higher-ups were taking all of the money even when the state congress expressly stated that no managerial personnel was supposed to take a pay raise for that year. Pay raises of 3-5% were the norm.
On another front, a friend of mine was also working at the university. After three or four years of never getting a pay raise he decided to find out what was going on. In his case, he wanted to look at the accounting books. It turned out that the accounting books were on the top floor of the library accesible only by stairs and no photography equipment was allowed on the top floor. Also, no pens, no paper, no pencils, nothing - except yourself. (Althought you could ask for a pencil and paper as you will see here in a sec.) It took several hours (and several days) of making requests for various accounting books, being told they were not available, being denied access to records, and the like to finally get hold of the books he wanted to look at. Turns out they were all done in pencil and several of them had areas that had been erased. Lucky for him, the sections he was looking for were still in good condition. After looking at the pages he asked for some paper and a pencil. The person would only give him one sheet of paper, one pencil, and stood over him while he copied the information from the book to ensure he didn't modify the books. Only one sheet of paper was allowed per person per visit. So it took him a while to get all of the facts. It turned out one person who had hired on with the department had funneled almost all of the funds to themselves. Something like a 30% pay increase each year for the past few years thereby doubling their salary in a very short amount of time. Since the "librarian" had stood over him and watched him copy everything he had the foresight to get the person's name as a witness to what he'd done so there could be no mistake about what he'd found out. He threatened to expose the whole affair if the offending person wasn't fired. They were and the money got distributed like it was supposed to be distributed to everyone. No charges were ever filed against the other person.
This is why I hate the "let's hide what everyone makes" mentality of most companies. As the saying goes "Evil can not stand the light of day but loves the darkness of the night." Which is to say that you can not do covert things unless you hide, misdirect, or mislead others in what you are doing. So remember that the next time raises are (or are not) handed out. Those people above you didn't take a "0%" pay raise. They took their cut out first and then went "Oops! There's nothing left for the rank and file. Oh well! Maybe next year!"
One last thing: Any time your boss gives you little or nothing as a raise; just remember this one thing - Every company has to file their income tax returns and those returns are open to public scrutiny. But more importantly, there is a company that already does this for you. They are Standards and Poor. Any major library in any major city will have the S&P books on hand for each year. All you have to do is to go to the library and look up the year you are told you are not going to get a raise (or even if they cut your pay). You can look up your company's information, see what the head of your company had to say about that year's profit and loss, see what dividends were paid to the stockholders, and even see how much money the company's owner made for that year (and you can compare it to the year before's amount to see what kind of a raise they got). Go and look at it. See how much of a pay decrease they took. I think you will be very surprised to find that even in the worse years they didn't take a pay cut or no raise at all but instead usually take about a 7-10% increase every year. Not to mention bonuses they may have taken on top of their pay increases.
Something to think about.
Someone put a black hole in my pocket and now I'm broke.
If enough tech workers do this then companies may give higher raises to keep their workforce. Or they (Like my company) will replace these people with people will less skills for less pay and train them with experience.
In other words, fire the experienced employees who want a decent wage and hire unskilled workers who don't have the guts to ask for more pay and let the customers suffer with bad support while the new class learns what the hell they're doing..
At my employer (we do contracted support) The client pays for training classes for new employees (these training classes are not as long as they should be but anyway) what happens if the company can't retain the new hires? They have to hire some more and the client has to pay for their training. At some point, the client gets tired of paying for new groups to be trained, and simply don't allow new classes. The result is a hiring freeze for that department. The employees on the project get overworked, irritable, ect. trying to cover the workload of a larger group. We may have oppertunities to earn more from overtime when this happens, sometimes these "oppertunities" are not our choice. In any case, the remaining employees don't get any additional compensation per hours for the extra workload. This situation continues until the company that hired us starts to lose money from their customers leaving from bad support or the employee numbers drop to a point where it is not possible to fulfill staffing hours. The only people who really suffer in the end is the employees who don't quit and the customers (end users) who deal with poor support.
This is what I don't understand. If you feel that a pay-cut is unfair, why do you stay with the company? I mean, if you think your time is worth more, why are you pissing it away working for less than you are worth? The fact of the matter is that companies can't be loyal to their employees and remain competitive. If your employer is not going to be loyal to you, you should not be loyal to him.
The whole principle of a free-market economy is fair exchange where both parties feel that they are getting back an equal or greater amount of value than what they put in. If you're not getting that out of an exchange, you shouldn't be participating in it.
Managers can do whatever the hell they want, a company run by morons is going to go bankrupt in short order, and it's the shareholders who will pay for their stupidity. That's one of the risks of investment, and it is also why many shareholders keep a close eye on what is happening with their investment. If you feel like your boss/the leadership of a company you've invested in is making stupid decisions, for god sake get out now or they'll take you down with them.
So after 6 months they wanted to keep me as I had done a good job and they valued my work, at which point I bypassed my boss all together and negotiated with the VP of IT for 2 days for a total of 5 hours, explaining why I was worth way more than what he was offering and debunking every reason he had to pay me like the other employees. And yes, I did plan a lot before that meeting - many hours! I did get the spcheal about how the company paid fairly and according to market research I was worth X amount of dollars, but I played it cool, mentioned that I had other prospects on the side (which was true) willing to offer me close to 60% more than what he offered me, I mentioned I had worked internationally and one of the jobs even offered me partial company ownership, but most importantly I said, hey, look I don't consider myself an average employee, so if you are interested in hiring average employees I understand that but if you read my resume (which I knew he didn't read it as I had been hired by another manager), you will know very well that I'm hardly an average employee and I take on work that very few people have the skills to take on.
Even though I didn't get the huge $ I was asking for (which was a 6 figure close to what he was making), I did get the highest tier of pay he was allowed to give me (he even got out all the pay charts and showed me what all the other employees made). 2 years later, I still make about 5% higher than my boss who has been working there for like 7 years!
So, hey... It was mental stress-hell for a week there getting ready to prepare to negotiate and getting through the negotiation itself, but 2 years later I could care less that I haven't been given even 1% raise as I am very happy with what I am earning and have no intentions of stressing myself over any raises for at least another 2 or 3 years.
Do your research, prepare like hell, know his negotiation abilities, strengthen yours and be VERY creative in your game. During negotiations, as he was saying no to my request, I said stuff like:
1)
well fine then how about you re-hire me as a contractor, or
2)
let me look at your Hierarchy and pay-scale to find me a job description I am capable of doing that meets my salary expectations (which he did show me),
3)
I brought into the negotiations print outs from monster.com and other places that showed that people with my job title made way more than what he was offering (what I showed, was of course the extremes),
4)
I suggested that the company was growing in a new direction and fast and that perhaps it was time to create a new job title that did not fit into the existing pay scales & descriptions,
5)
I explained that in my last job I made 50% more than what he was paying me as a contractor, and that I took the job because I liked the company and the technology was very leading edge at the time (VoIP) but that now (2003) my skills are high in demand (and he knew that),
6)
next I said, ok well what about stock options to make up the difference?
7)
Or what about training commitments worth $X per year,
8)
or forget the salary and if you are not convinced, let me work for you for free and you pay me 10% of what I save the company money on (I could have trippled my salary easily if he had said yes).
9)
I threw the question/problem back into his lap saying... Ok so listen, you know that I am not your average employee and am worth more than your regular pay scales, so how do you sugge
No trees were killed in the making of this post; however, many trillions of electrons were horribly inconvenienced.
4% would be considered a clear signal that not only you indepensible but you are probably being groomed for bigger and better things. My whole department, for the last 3 years has given out ZERO increases ZERO bonuses to all but the 'top' 15% of the staff based on ratings but more realistically, based on who actually works in physical proximity to the boss, given we're a spread out, 'virtual' organization.
And if the noises we hear about the strategizing the paradigm and upselling the modality to shape the customer solutionality are any indication our reviews for 2006 will come out the same.
And this is a MAJOR IT corporation you see commercials for, every day on television.
And this is in one of the areas commonly touted as a hot area; commercial security.
So in real terms as our compensation FALLS at least 3%/year for 3-4 years I have to say your complaints of only getting 2.8% - 4% fall on deaf ears.
Those who get wealthy and still profess belief in it are part of the lie that liberalism is and has been since the words "liberal" and "liberalism" were stolen by the leftists from the old style liberals who were if anything more like the true conservatives of today.
Really? I'm dead broke since I'm in college, but I don't expect to be that way for the rest of my life. I consider myself to be quite liberal in the "new" sense and don't plan to change my beliefs any time soon. I believe in the idea of a welfare state, and will gladly give up a good share of my money in furtherance of that belief if I ever have the luck of being successful.
Your comment regarding immigrants is pretty spot-on. The reason this is, is because many immigrants look at a $5.15/hr job as a Godsend. They had it so bad in their previous country, anything here looks fit for a king. The chronically poor who have lived here for their entire lives don't see things that way, and subsequently believe that if they work a full time job, they deserve X and Y. Even then, many immigrants end up being just as broke as natives. Take a look at some of the working-class neighborhoods in Boston, decendants of Irish immigrants. They came, worked hard, and had nothing to show for. Its just that "broke" in the US sense is far and away better than "broke" in the foreign sense.
I may scramble from job to job to keep my income paying a mortgage and ten dozen other bills, but I'd rather be doing this for my family than letting them sit around without hope living at the mercy of others.
I applaud you for doing that.
Although there is a certain cost-benefit analysis some people use in this situation. If single-mom X can make $400/wk at work and have to pay for child care or she can live off public assistance until her child reaches school age, why should she work? She can make sure her child is getting the attention they need if she's home.
This, to me, is an inherent flaw in the system, the same way that 45,000,000 Americans don't have health insurance, but all of our prisioners do. In fact, my girlfriend is one of those $45,000,000, and I suggested to her that, in order to get some costly surgery done, the best way to go about it was to commit a crime so that she would be incarcerated. This way she would get the care she needed. I've read quite a few stories where seniors would pull a gun at a convenience store, wait for the manager to call the police, and then wait outside for the police to come. Once they were in jail, they'd get their heart medication and other health needs taken care of.
- First they ignore you, then they laugh at you, then ???, then profit.