Corporate america and 3% raises

[target2019]

Quote:

Originally Posted by kgtest I don't buy this 3% raise BS. I can EASILY go get a job that pays me 15% more. Do I wait out these 3% raises in lieu of a Pension in 10 years...and an opportunity to receive a 15% bonus every year..or do I walk and increase my bottom line? am I way out of line for complaining about this or are other bank employees receiving similar raises at or around 3% ??

I was stuck in that hamster cage for a few years. The descriptions about bands and so on are strikingly familiar. If you can change jobs and get 15% more, you should do that. Or resign yourself to <3% yearly. I think the 15% yearly bonus is worth staying for, but that's just me.

I never found a competitive substitute job. Things have been thinning out in my profession for a very long time. Things change, so be creative.

I found another 10% or more for three years, by enrolling in a generous tuition program. Shortly after I completed, megacorp reduced the benefit. Not the company is being sold, and many benefits will disappear.

I was kicked to the curb, but it's been a nice transition. In 2016 I will earn 15% more than my best year at megacorp. This is with a smaller competitor. The fact that it is 15% more is somewhat ironic.

Maybe another bank will buy your's, and you will get that 15% boost. However, it is probably an even bet that you will lose your job. Stuff happens.

Instead of busting hump for another 1-2%, it is far better to invest your human capital in some kind of self-employment, IMO. That has worked during a lifetime for us.

[Andre1969]

I'm a government contractor, and I've been stuck in the 3% rut since 2012. Here's a rundown of the raises I've gotten, for as far back as I can trust my memory, at least...

9/09: 5.0%
9/10: 4.2%
9/11: 4.6%
9/12: 3.0%
9/13: 3.0%
3/14: 1.8% (6 month)
3/15: 2.9%

I can still remember going to a company meeting back in 2009, just before we got our raises, and the manager was trying to comfort us, warning us that the raises weren't going to be so hot this year, because of the economy and the Great Recession and such. So needless to say, when I got that 5%, I was thrilled!

Even though the 2010 raise was smaller, I was still happy with it, and when the 2011 raise was a bit bigger, I thought it was a sign of good things to come.

When 2012 came around, I figured that, with the way the economy is finally taking off, the raises would be even better. Needless to say, I took that 3% as a slap in the face.

But, in my case, I think I'm just at the peak of my salary range, and the only way to get significantly more is to take on more responsibility and get a promotion, or walk, and take my chance out there in the job market. And that's a toss of the dice. I could hit the jackpot, or I could crap out!

[ERD50]

Quote:

Originally Posted by Options The new realities in the world of work are thus: .... (see full post below) Hope this give you some perspective. Good luck, whatever you decide.

The only thing I really disagree with is that this is anything new. It's always been this way.

-ERD50

[skyvue]

The company I work for (Fortune 500 company) has grown earnings/profit on average 15% per year over the past 5 years. The average merit increase has been 2.75% over the past 5 years. The money is all going to the very top of the company via bonuses and especially stock options. They pump up the value of the stock options greatly by using most excess cash to buy back our own stock. This is an example of the driving forces that are making income inequality progressively worse in this country.

[Scarecrow]

My megacorp is making lots and lots and lots of profits. CEO has flat out told us over the years that shareholders come first, it's all about the shareholders. If there are some scraps left after shareholders and Exec pay/bonuses, we'll get a little something. This year they are talking 3% raises. I'll get less, maybe 2.5%, because I'm old and at the top end of my pay bracket, and not one of the "in crowd".

My company, like many, has been on a "reward your top performers" kick. We are all pretty much equally capable and contribute equally, so in our view, "top performers" tend to be the director's pets, who puff themselves up, who have lots of funny jokes for the director, tell the director how smart he is, like the same football team as the director, have exceptional knowledge of said football team, etc.

[jjquantz]

In some (technical) industries there is another way to get those top raises without giving up your life but it's risky. That is, you have become "the smartest guy in the room". The one guy that always knows the answer, the guy that is never wrong. The problem is that this can be precarious. The company is sold, there is a major reorg, or you stop being right. Can be fun while it lasts, according to a couple of people I observed with this status. Come in late, leave early, get big raises, get the interesting questions. But the end can come quickly.

[CRLLS]

One change in management, even only 1 level up, can quickly change the dynamics of any company/workforce. Increases are determined by the accountants, not the everyday bosses. If you are the greatest one in the dept, expect just a little more than average. Not 2x or 3x. I would like to think that I was one of those greatest ones. I always got what I thought was a fair raise. However the increases was not proportional to the extra work effort and responsibility.


40+ years ago (remember those days of DB pensions?), I had a teacher that said: "Never stay at the same job (position) for more than 3 years nor less that 1-1/2 years". I never followed his advice. In retrospect, especially in today's job climate, I think he was right.


If you can get the 15% somewhere else, I'm another that says, take it to the bank grinning all the way. There is only one person looking out for your best interest, and you know who that is! But don't go thinking that things will be different at the new job. Consider it only another 3-4 yr gig.


BTW, I did take another job back in the day, for a 33% increase. It lasted 8 months before they shut down the business! So be careful out there.

[athena53]

Quote:

Originally Posted by Andre1969 But, in my case, I think I'm just at the peak of my salary range, and the only way to get significantly more is to take on more responsibility and get a promotion, or walk, and take my chance out there in the job market. And that's a toss of the dice. I could hit the jackpot, or I could crap out!

At least you know that you're at the peak of your range. I had a coworker who was at the top of the range and, in our company, was thus not eligible for any raises or annual bonus. Naturally, I did not want to find myself in a similar position so I asked an HR person what the top of my range was. She replied tartly, "that's confidential information and no one has access to it". No one? Umm, OK.

I definitely flatlined the last 5 or so years of my career. I didn't even do well when I made a move- had applied for internal positions within the company with no success (I was located in a satellite office and even if I'd wanted to move to the HCOL areas where the hot jobs were, I was at a disadvantage because they'd have to move me). So, I jumped ship and took what I could get, which was barely a lateral move.

I agree with the others- if you can get 15%, grab it, but make sure it's apples to apples- comparable working hours, you're comfortable with the culture, the raise won't be eaten up by higher contributions to medical insurance or giant deductibles. DB pensions shouldn't be underestimated; an annuity of $10K/year beginning at age 65 is worth $250K according to one site I checked- but there's no guarantee they will continue that plan or that they'll keep you around long enough to vest in it.

[Big_Hitter]

Quote:

Originally Posted by athena53 ; an annuity of $10K/year beginning at age 65 is worth $250K according to one site I checked- but there's no guarantee they will continue that plan or that they'll keep you around long enough to vest in it.

I think it's closer to $125K, no cola at 4% at 65, so the PV at a younger age will be less.

[athena53]

Quote:

Originally Posted by Big_Hitter I think it's closer to $125K, no cola at 4% at 65, so the PV at a younger age will be less.

Thanks- you've got more expertise in this area than I do!

I've got two small pensions- one from a large corporation I'll call Giant Enterprise, which I managed to accrue just before our unit was sold, for $10K/year starting at age 60 (no increase if you started later) and another I haven't started yet from a very large financial services company, which I managed to accrue just before they downsized me. That will be $12K/year if I wait 2 more years and start at age 65. Stuff happens; I'm glad I got even these amounts.

[kgtest]

Quote:

Originally Posted by scaubie Much of corporate America has moved to pay grades...bands. Based on your salary, you are either in the bottom, middle or top third of your band. If you exceed performance there is the opportunity to receive beyond the standard amount. If you want to increase your salary over 5-8%, you must either earn a promotion and take on additional responsibilities or leave your present employer. It's the way of the world these days.

I like the promotion angle. I will begin pursuing that. The job is not actually all that bad.

I wouldn't expect anyone to counter offer and agree you need to be ready to walk.

I suspect I am on the higher band of pay in comparison to the others in my group. I tried to get even $5k more of salary when I was hired 6mos ago and they wouldn't budge. At the same time, I have avery niche and unique skill that is extremely hard to come by in my location. Not many of us in town and most in my niche likely work a lot harder, but also prob make a bit more than I do. I look at GlassDoor etc...and I look at my resume, and I begin to notice I am almost over qualified. This leads me to believe the flat line has somewhat begun, unless I work the promotion angle.

[kgtest]

Quote:

Originally Posted by target2019 I was stuck in that hamster cage for a few years. The descriptions about bands and so on are strikingly familiar. If you can change jobs and get 15% more, you should do that. Or resign yourself to <3% yearly. I think the 15% yearly bonus is worth staying for, but that's just me. I never found a competitive substitute job. Things have been thinning out in my profession for a very long time. Things change, so be creative. I found another 10% or more for three years, by enrolling in a generous tuition program. Shortly after I completed, megacorp reduced the benefit. Not the company is being sold, and many benefits will disappear. I was kicked to the curb, but it's been a nice transition. In 2016 I will earn 15% more than my best year at megacorp. This is with a smaller competitor. The fact that it is 15% more is somewhat ironic. Maybe another bank will buy your's, and you will get that 15% boost. However, it is probably an even bet that you will lose your job. Stuff happens. Instead of busting hump for another 1-2%, it is far better to invest your human capital in some kind of self-employment, IMO. That has worked during a lifetime for us.

I like your way of thinking. It definitely has to do with the pay bands. I doubt our bank would ever sell...we actually acquired a bank and branches this past year.

[kgtest]

Quote:

Originally Posted by Big_Hitter I think it's closer to $125K, no cola at 4% at 65, so the PV at a younger age will be less.

I suppose I would have to look at how long it takes me to earn 125k. The pension is well funded I am told. I could get into the specifics but it might be a tell on the bank I work for and I am trying to keep that anon.

I can say the pension looked to be modified as there is a "grandfather" rule that includes the baby boomers but not genX. So that tells me if it happened once, it can happen again. Takes 10yrs to get vested...I would make a million in that time and so that 125k really comes out to about 10% of my earnings from the company.

Lots to think about but I have a very young family so it seems to make sense to stay put for a few years for now. I suppose not too many people leave after a 15% bonus though...

[HFWR]

3% is 2-3% higher than any of my "raises" over the last fifteen years or so...

[Big_Hitter]

Quote:

Originally Posted by kgtest Takes 10yrs to get vested......

the maximum statutory vesting schedule under ERISA for a DB plan is 5 year cliff - not sure how you get the 10 year requirement

[photoguy]

I worked at various consulting megacorps and pretty much always received raises in the 5-15% range. That wasn't unusual (for above average or better evals), just the nature of the company. I think it just depends on your specialty and how much competition there is for labor.

Sent from my Nexus 5 using Early Retirement Forum mobile app

[Hamlet]

Quote:

Originally Posted by kgtest I don't buy this 3% raise BS. I can EASILY go get a job that pays me 15% more. Do I wait out these 3% raises in lieu of a Pension in 10 years...and an opportunity to receive a 15% bonus every year..or do I walk and increase my bottom line? am I way out of line for complaining about this or are other bank employees receiving similar raises at or around 3% ??

A lot depends on where you are currently salary-wise. Most of us flatten out at sum point. I got massive raises as a network engineer in late 90s. Low starting salary + hot area + pretty good at it = massive increases.

I've reached a point now where I'm not going to get big raises without a large increase in PITA. I'm kinda maxed out for someone who wants to avoid travel, work a normal number of hours in the week, and wants the stability of Megacorp. My current employer also has a huge advantage in that I have almost no commute to get to the office.

If you are still making modest money and are hungry for more, though, I'd test the market. There is no harm in seeing what is out there to keep your employer honest. You just have to decide if the additional money is worth disrupting your life.

[harley]

I was with one company (although various incarnations of it) for about 25 years. During that time I got one big pay jump when I came in, followed by a lot of years of 2, 3, or up to 5% (when I would get a promotion) raises. Then at one point (mid 90s) I jumped from the old time megacorp to the internet provider part and got a nice promotion and big raise from that, followed by quite a few more years of standard raises. I once calculated that of my final salary compared to my salary just before starting there, almost 50% came from those two job change moves. It's just life in the corporate world.

I did know a number of people that jumped companies multiple times, and they definitely were getting paid more than me. But they also tended to be the first ones laid off during bad times. I'm not sure who ended up ahead financially, but I preferred a bit more (at least perceived) security.

[Big_Hitter]

you could always try a headhunter that works in your area of specialty - ask him/her if you are being underpaid

[kgtest]

Quote:

Originally Posted by Andre1969 I'm a government contractor, and I've been stuck in the 3% rut since 2012. Here's a rundown of the raises I've gotten, for as far back as I can trust my memory, at least... 9/09: 5.0% 9/10: 4.2% 9/11: 4.6% 9/12: 3.0% 9/13: 3.0% 3/14: 1.8% (6 month) 3/15: 2.9% I can still remember going to a company meeting back in 2009, just before we got our raises, and the manager was trying to comfort us, warning us that the raises weren't going to be so hot this year, because of the economy and the Great Recession and such. So needless to say, when I got that 5%, I was thrilled! Even though the 2010 raise was smaller, I was still happy with it, and when the 2011 raise was a bit bigger, I thought it was a sign of good things to come. When 2012 came around, I figured that, with the way the economy is finally taking off, the raises would be even better. Needless to say, I took that 3% as a slap in the face. But, in my case, I think I'm just at the peak of my salary range, and the only way to get significantly more is to take on more responsibility and get a promotion, or walk, and take my chance out there in the job market. And that's a toss of the dice. I could hit the jackpot, or I could crap out!

My path has been a bit different, I have "job hopped" about 5times in the past 8years of my IT career. Looking at my income progression I can see why I was originally unhappy with the 3% but with the bonus added in, it doesn't look as bad if I compare income gains yr over yr.

2007(unemployed / construction) BASELINE-0
2008(began IT) +78.67%
2009 7.38%
2010 5.28%
2011(found new job) 23.49%
2012 11.81%
2013(1 yr contract job) 11.85%
2014(found new job) 10.36%
2015(unemployed 3mos, new job) -13.70%
2016-Projected 37.54%
2017-Projected 9.32%

I didn't have a college degree, and I burned about 6yrs working a low paying construction job. I set a goal after leaving construction that I would earn six figure salary by the time I was 35 and thankfully reached it a cpl years early. I guess I know what I need to do to get more than 3% as I have done it in the past. The bonus and benefits might actually be worth more than increasing my base salary... I know I could bow out anyday and that doesn't help. it takes a few months to acclimate to new jobs and its stressful, so I ask is it worth it...I dunno.