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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.""
We're getting basically cost-of-living raises.
Welcome to the way the rest of the universe works. Be glad you even got that. Most poeple have to find new jobs to get a raise at all.
Don't worry, I'm sure another bubble will be along to get you a 100% raise every 6 months like the good ol days.
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Took a 30% pay cut two years ago, as nothing was available but a job 40 miles from home. Only one pay increase in two years, 1.15% which has more than been eaten by the rise in petrol cost.
It's simple Supply-Demand (Keynesian economic theory), when workers with a particular skill set are not in demand or supply excedes demand, there's not much rationale to give workers higher pay. Of course some increase is a sign of goodwill and encourages workers, but tell the beancounters.
Oh, and the execs got about 6% pay increase this year. Can't have that lot starving, can we?
A feeling of having made the same mistake before: Deja Foobar
Is it really a valid expectation to automatically get a salary increase? What happened to earning it? I feel pretty confident in saying that 69% of all workers didn't perform above average, so why should they be expecting a reward?
Slashdot - where whining about luck is the new way to make the world you want.
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...
And keep in mind that a 0% raise is actually a pay cut, due to inflation. If you're not averaging about a 2% raise every year, your income in terms of buying power is declining.
And while I may whine about the fact that most of the time I have to jump jobs to get a raise, if I hung around those places, i'd probably be likely to get the 3-4% every year or so, and I don't really have a problem with that.
What I do have a problem with is when I only get a 3-4% raise, yet, executives can give themselves 50% raises, 4 million dollar bonuses, etc. There is nothing a CEO can produce that warrants that level of compensation. PERIOD.
I say we find somebody crazy enough in congress to propose a salary cap for CEO's bill. Then tell everyone in the public about it, and see how many people really support something like that. Especially when the workers outnumber the C-level's probably 100 to 1.
"See, we plan ahead! That way, we never have to do anything now."
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)
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.
I give my Chinese sweatshop kids a raise now and again, usually about a cent a month extra, sometimes a dollar bonus if they've been churning out consistently good shoes. It keeps moral up and gives them the belief that they might one day make enough money to break free of their shackles. I would warn bosses against so called 'perk raises' for example taking the number of tardiness lashings down might seem like a good idea but I've had problems when the workers start boasting about it and eventually UNICEF or someone finds out that we actually _are_ lashing them. That was a pretty costly lawsuit. In all I would say treat em mean and keep em keen. Its far better to threaten a wage reduction for poor work than to offer a raise for good work, instead just tell them that you're only paying the Pakistani kids half the price and that will get them feeling pretty good.
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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!
What always gets me every time we have a discussion about raises is that any call for pay increases to the rank and file is met with fierce opposition by those who claim it will obliterate the economy via inflation and will rob shareholders of their rightful gains while sending corporations reeling into bankruptcy.
So, I must pose the question, why is it perfectly fine for managers (especially those in the upper echelons) hand out massive raises to themselves and their cronies that are often the equivalent of several times the average salary of their subordinates? The typical CEO makes 450 times as much as the average person they employ. Even when business is bad, layoffs are rampant and wages stagnant, the raises for the managers continue - because according to them, poor performance is always the fault of the lower rungs, while good quarters are always thanks to their expert stewardship.
The auto parts company Delphi is asking for their non-management staff to accept 50-69% pay cuts, (these workers were described as being basically worthless in a speech the CEO gave two weeks ago) while the managers that have presided over the company sliding into bankruptcy are going to get massive raises.
Please explain who spending tons of money to compensate workers who are being asked to produce more per hour, work more hours and accept fewer fringe benefits like comprehensive healthcare coverage is some evil, evil thing that shall destroy every company and drive them into bankruptcy, while distributing the same amount of money to the higher ups is no problem whatsoever?
Ask your prospective employer if they offer superior raises to overperforming employees, and what kind of range such a raise might be in.
I always ask this question, and as a result, i've never had a raise less than 9%.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
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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....
Unfortunately, there's too many saps out there who complain about shit raises, but won't go out and do something about it. Don't like your raise? Get a new job, and then when you leave, tell them exactly why. If more people did that, raises would be higher for everyone.
The cake is a pie
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.
subject says it all. Guess I enjoy getting modded down.
Don't believe anything I say. I crash test crack pipes for a living.
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.
"If money is all you love, then that's what you'll receive." Yes ma'am!
Not that I disagree with your post, but can you cite sources for this?
....
I get much of my stuff from http://mwhodges.home.att.net/ you may need to recalculate it for being percapita though.
The numbers I've seen are closer to 40K.
sounds like just the federal percapita.
I would guess that a disproportionate amount of that number is in morgages. Shouldn't morgage debt count separatley, as an investment, being secured by a tangible property which can be resold and which usually accrues value (unless there are too many speculators)?
I would be vary wary of that, real-estate lost 90% of it's value during the great depression, and to tell you the truth - we are more overleveraged now then we were then. IMHO, going into debt for a home today is not only not a secure investment, it is very dangerous.
The difference between that and credit card (or federal) debt is pretty significant.
Isn't a lot of that debt also to ourselves? I owe rent to the owner, my roommate owes rent to me, her company owes her salary to her, etc. A more realistic example would be a car company who owes money to it's creditors, but who also is owed money by the people who buy cars from it. Isn't that debt being counted twice?
Unfortunately most debt is foriegn owned nowdays, Japan alone has some 650bln of us bonds. The problem with debt isn't who it's owned to, it's that it pre-obligates money that would otherwise be spent in more productive ways. Plus, long "chains" of debtors are as strong as the weakest link, if someone in the middle defaults - everyone else still owes and must make it up somewhere or default too. That's why over debted societies usually have a cascading collapse.
I'm not convinced that zero debt is the overall goal. All investments are debt to someone.
I think debt for things other than investments that increase productivity are a bad idea. Also from what I understand, 90% of society are debtors and 10% creditors.
If I invest 1,000 dollars in a local company so that they can re-tool their factory, that's 1,000 dollars in debt that basically guarantees a return to society much larger than the expense.
There is a difference between investing and loaning, with a loan money is owed no matter how good or poorly it does. With investment in things like stock, that is not the case.
Corporate debt is how the buying power of money is shifted from institutions that have it, to upstarts that need it. Sure, Sony may go a half-billion dollars in debt to create a new fab plant for the Cell chip that powers the Playstation 3, but they'll make it back.
I agree, that is good debt. Millions of people re-financing their home and spending the extra on consumption is not.
If not all debts are necessarily bad, we have to figure what kinds are bad and what kinds aren't. Student Loans are as annoying as hell, but the benefit to society (and a single worker's earning potential) greatly outweighs the cost of being in debt. Credit card debts are always bad, and are basically the work of the devil. Sometimes you need to go into a little debt to buy a used car to get to work on time... That's much better than not working. But buying a 25k new SUV is a bad investment.
Sometimes credit card debt can be better because it's not secured. Anyhow, on no uncertain terms the US is overleveraged in debt, and the fed has loaned out way way way too much money. Even the fed said that the economy is super efficient because of new technology, but what they didn't say is that efficient economies make fluctuations to excessive monitary policies more extreme, not less extreme. The global economy is teetering on the edge of a cliff, I would peronally and strongly recommend having some precious metals on hand. Apparently I'm not the only one who thinks this as gold is at an 18 year high now ( http://www.kitco.com/)
Cheap-labor lobbyists bribed Congress to increase the H-1B tech visa limit recently. Lobbyists keep saying there is a "shortage" of techies, but there is no objective evidence to back them. Tech unemployment is still high by historical and population relative standards, and salaries have been flat. Why don't they pick on lawyers for a change? Why, because lawyers have (or use) power, we don't.
If we don't collectively apply political pressure, they will do to our field what they have done to agricultural workers.
Table-ized A.I.
"Or they (Like my company) will replace these people..."
Meager wage increases (if you get them at all) are now the norm rather than the exception. The change to labor laws under George W. Bush were not an anomally -- your employer now expects you to work longer hours for less pay and benefits. Consider yourself lucky if your job hasn't already been offshore outsourced, or not in the planning stages. Your 401K overseas investments are growing fastest because you are helping to finance your company's globalization. But do not expect to gain enough from these investments to make up for when your job finally disappears overseas -- it won't.
The government's job is no longer to be of any particular benefit to you -- only to your employer. The tax cuts, tax loopholes, and outright federal grants were never intended for you, but for your employers. There was never any possibility that your political campaign contributions would ever provide the politicians with either an evenhanded or even populist world view -- you cannot compete with your employers when it comes to buying those politicians because they do not come cheap.
Expect that the time will come when your job will disappear overseas, or that your employer will replace you with cheaper imported (L1-A or H1-B) labor. And do not expect that you can fall back on the experience from those summer construction jobs you took while a student -- those jobs are now taken by the hundreds of thousands of illegal alien laborers that have continued to pour across our borders. This is no accident, but a concerted effort by the George W. Bush administration to force all wages down for his corporate sponsers. Between open borders, the INS "catch and release" policies, and zero enforcement against employers hiring illegal aliens, the plan is to do for domestic skilled blue collar jobs what has been done to the shoe, textile, steel, and IT white collar jobs.
The only substantial wage and benefit increases are destined for the pockets of upper management and the executive board room, and especially for those companies who not only cater to government contracting but also make the largest campaign contributions. And by the way, don't make too much noise when you protest the current status quo, because the term "terrorist" is largely undefined in the latest and greatest version of the US Patriot Act.
Welcome to "1984", and be certain to take your daily dose of "soma". Not taking your meds could provide you with an extended stay at Club Med - Gitmo.
Um, I think 4% is pretty standard for anyone across any industry that is considered a worker that gets their work done in a timely fashion and in good order. If you want that 10% raise, you better be implementing procedures to save the company millions of dollars and make sure your management knows about it. The only justification you could make for a higher raise while "just doing your job" would be for a smaller company where the earnings are more transparent to the workers. If there's only 30 people at the company and profits rise 30% over the year due to everyone "just doing their job", then yeah, a higher raise is arguable. But all that fancy stuff you do as a server admin for a large company, managing server space, making backups, handling software licensing schemes, that's all your job. You're expected to do it and do it reasonably well, that's why you were hired. And in return, you can expect a cost-of-living raise plus a small service incentive increase. The average raise at my company this year will be about 3.5% and I'll be content with that. Mainly because I'm still learning some of the processes and I don't know how everyone else will review my performance thus far. While I think I've done a great job on everything I've worked on, I figure that's what is expected of me. But if I end up patenting some new technologies in the coming year that I believe will help the company, I may feel different. If you can backup your claim for a higher raise, then by all means go for it. But don't sit there and whine that you only get 4% for just doing your job.
Besides, hasn't anyone ever told you? You don't get rich working for someone else.
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.
The vast majority of my family owns their own business or works for one of the members who does. As someone with experience on both ends of the spectrum... company ownership and working for "The Man"(tm)... I can say for certain that the primary reason most people are offered 2% (or whatever) raises, is because the boss or bosses are fairly certain they can get away with it. Sometimes this backfires. In a company with highly skilled and specialized folks, this can often mean you lose some of your best employees. Either way it's all a calculated risk. Questions that are asked:
Is the cost of the additional salary more or less than the cost of replacing the potential loss of personel?
What percentage of those who find other jobs can be lured back in with an offer for a bit more?
Is the product produced by the employee worth the money being paid?
Can an employee that costs less create the same quality of product in the same amount of time?
In the end, if you truely believe you're worth more than you make, and the company you work for seems unwilling to compensate you in this manner, everyone is better off if you find that job. In reality, your true market value is only what the highest bidder will pay. And, in our current job market, there are typically at least a dozen people willing to do what you do for the same or less... supply and demand at its best.