pay

Workers ready for a raise, already

April 4, 2012 at 10:28 AM ET

Now that the economy has been adding jobs at a steady clip, more of us are ready to tell our boss to “show me the money!”

After years of seeing tiny or non-existent pay increases, employees are more optimistic than they have been in four years that employers will hop on the raise bandwagon soon, according to a study released Wednesday by Glassdoor, a job listings site.

Raise optimists outnumbered pessimists for the first time since 2008, when the website began its quarterly Employment Confidence Survey.

Among the more than 2,000 adults polled last month by Glassdoor:

  • 43 percent said they expected a raise in the next 12 months.
  • 38 percent said they did not.
  • 46 percent said they expected their company outlook to improve in the next six months, up 6 points from three months earlier.

Is this just wishful thinking on the part of recession weary workers?Maybe not.

Raises are indeed slowly making a comeback, said Ken Abosch, group compensation leader for Aon Hewitt, a human resources consulting firm.

But don’t expect your employer to break the bank.

Aon Hewitt surveyed nearly 1,500 U.S. companies last year about expectations for pay increases in 2012 and found employers planned to pay an average raise of 2.9 percent, up slightly from 2.8 percent in 2011, although way up from the record low 1.4 percent for 2009.

“Organizations are still very concerned with the health of economy, and they’re feeling pressures of global economy,” Abosch said. Many firms, he added, “fought hard in the last few years to gain control back over their fixed costs.”

Unfortunately for you working stiffs, your base salary is a big chunk of those costs, so employers want to do everything they can to keep a lid on it.

On the bright side, he added, more employers are paying out bonuses.

“Our statistics show that 90 percent of U.S. companies are providing bonuses as far down as the person sweeping the floor in the factory,” he said. That is up from 78 percent in 2005 and about 50 percent just 15 years ago.

The Aon Hewitt survey found:

  • 86 percent of employers said they would fund variable pay based on company performance this year. In some cases, however, that is being combined with reduced merit pay raises and even layoffs.
  • Nearly one in five employees (19 percent) are concerned they could be laid off in the next six months, up two points from the fourth quarter after declining the preceding two quarters.
  • One-third of employees are concerned coworkers could be laid off in the next six months.

“Positive economic and company indicators are driving increased optimism around pay raises and company outlook, but that optimism hasn’t yet spilled over into individual job security or view of the job market,” said Rusty Rueff, career and workplace expert for Glassdoor.

“Employers should pay attention to employee expectations around pay and be more transparent to ensure employee sentiment is aligned with reality, which will help avoid disappointment that can impact morale.”

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