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All you need to do is build a case.
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News flash: Breathing is expensive. The cost of living in urban America is up 6% compared to last year, thanks to inflation, which has upped costs on groceries, rent, and just about everything else. Despite rising prices, the government is unlikely to pull through with fresh stimulus checks.
Here’s the good news: Employers are responding to inflation by giving workers pay raises. According to an in-depth report by Payscale, 56% of organizations plan on giving base pay increases of over 3% in 2023.
Does your employer plan on raising your income? Here are the top five reasons employers cited for upping their employees’ wages.
1. Company-wide performance
Nearly three-quarters (72%) of employers say they’ll consider giving raises in 2023 to reward employees for beating company revenue goals. And many do surpass their goals. About 1 in 4 companies surveyed by Payscale believed they outperformed in 2022.
Expecting a raise? Check your company’s yearly earnings. Companies that beat their own revenue goals have a higher chance of distributing raises to employees.
2. Market adjustment and talent competition
Last year was tough as jerky for employers, with around 50 million Americans ditching old jobs for greener pastures. Companies must battle it out for talented employees. Maybe that’s why 67% of employers say they’ll factor competitive market conditions into employee pay increases.
3. Inflation and cost-of-living
In 2022, less than half of employers considered inflation when deciding on pay raises. This year, they flip-flopped — most employers take inflation into account. That’s good news for folks hit hard by rising costs, especially those in metropolitan areas like Los Angeles.
4. Internal pay equity
A little less than half (44%) of employers think equal treatment is worth considering, up from last year. This may be due to the government pushing for greater wage transparency. For example, California passed Senate Bill No. 1162, which requires employers to disclose wage ranges on job listings.
5. Hot skills
Twenty-seven percent of employers consider in-demand skills when determining whether to offer higher compensation. According to LinkedIn’s annual report, here are some of the highest-demand skills in 2023:
Soft skills: management, communication, customer service, leadership, and sales.Hard skills: software development, SQL, finance, Python, and Java.
So what?
Now that you know why employers give employees raises, you can use this information to develop a compelling case for a pay increase.
Example 1: Your company has exceeded its 2022 revenue goals. Whoot! Consider bringing this up to your boss when you request a salary boost. They may appreciate your initiative.
Example 2: Your city’s living cost has risen — rent and groceries are more expensive than ever. Because you use a budgeting app, you know exactly how much more you spent than last year. You can confidently cite numbers when your manager brings up annual raises.
Suze Orman says you are worthy of wealth
Not sure how to request a raise? Financial guru Suze Orman reminds workers that they are worthy of wealth. Employees can build self-confidence by setting small financial goals and contributing to them daily.
Set a daily budget. Reward yourself for meeting your spending goals.Start an emergency fund. Set up automatic deposits with your bank account. Track your savings with a budgeting app. Treat yourself (within reason) for every $100 saved.Pay down debt. Money guru Dave Ramsey suggests using the debt snowball method to pay off small debts first. That way, you’re motivated to stick with it.
Employees’ time and skills are valuable. Consider the top reasons employers give pay raises going into 2023. New insight might provide you with what you need to negotiate a raise successfully.
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