Corporate america and 3% raises

[Chuckanut]

They were clearly not prepared, and I swore (cue "Gone With the Wind" background music), "As God is my witness, I'll never be that vulnerable and dependent on MegaCorp".

+1

As I have said previously, some of the best advice I ever got from my father was "Always work for yourself, even if you are employed by others." By this he meant, do an honest day's work, keep your skill level up and don't sacrifice your future for the good of your employer.


I think a lot of the Millennials have learned this lesson after seeing what happened to many people in their parent's generation. Some of us were just ahead of our their time.

 

[sengsational]

I did an exercise recently...the annual figures from my SS statement adjusted by wage inflation. I worked a few years, then got my masters degree. There was a step-up at the masters degree, but generally flat from then on; no general upward trend of any magnitude. And I switched companies too. Probably would have lost ground had I not jumped ship a few times. Sad that the megacorps value a noob as much as someone who's been around.

 

[Andy2]

I read an article recently (sorry, I can't post the link) where they described how many organizations are now pre-filtering out applicants with the highest salaries. Apparently the it started during the great recession. Here is a small quote from the article:

"Unfortunately, some clients use salary as a pre-screening question,i'” said Susan Vitale, chief marketing officer at iCIMS Inc., a provider of recruiting software in Matawan, N.J. “So if the role tops out at $55,000 and they say they want $60,000, it might knock the candidate out of consideration” even if the person would be open to salary negotiations."

It may be that it is still a buyers market in employment and strategies like this are slowly capping salaries for many people?

 

[Big_Hitter]

I read the same article.


I was somewhat surprised that pay is mentioned at all by the candidate during the interview process.

 

[jjquantz]

I did an exercise recently...the annual figures from my SS statement adjusted by wage inflation. I worked a few years, then got my masters degree. There was a step-up at the masters degree, but generally flat from then on; no general upward trend of any magnitude. And I switched companies too. Probably would have lost ground had I not jumped ship a few times. Sad that the megacorps value a noob as much as someone who's been around.

I've been doing the same for the last few years, mostly out of curiosity. The results could be depressing, if I let them. In 1986, I made $42K with BigOil 4 years into my first job out of college. I went back to grad school in 1987 and then started teaching. It took me until 2008, leaving teaching, and moving to a HCOL area to top that 1986 salary on an inflation adjusted basis. I could think of that as 22 years of missed earnings potential but, instead, I think of it as 22 years with lots more time that I spent with DW and kids.

Edit: Oh, and playing golf.

 

[Andy2]

I read the same article.


I was somewhat surprised that pay is mentioned at all by the candidate during the interview process.

Me too, but the article does mention that in many cases pay is a required field:

Today, pay increasingly is mentioned early in the process, either as a required field in online applications—which are used more often—or during initial interviews, say recruiters, compensation consultants and job seekers.

 

[Options]

Check the white pages for "Buggy-Whip manufacturers", or put up an ad for "Plow-Boy - must be able to manage a two-horse team".

We used to have something like 80% of the population directly working in agriculture, it is now single digits. But we don't have 80% unemployment.

Agreed, and to my original point - this is nothing new.

Back around 1980 (36 long years ago), my ideas for planning for the future went from "that's a good thing to do", and doing reasonable LBYM and saving/investing, to being cemented in my mind permanently. I attended a job fair, representing my MegaCorp, collecting resumes from prospective employees. I had a long line of 50-somethings who were " called into the office of your boss on a Friday afternoon and told your position is being "eliminated",". Their skill set was outdated, and this twenty-something had no choice but to hand them back their resumes, and say "I'm sorry, but you do not have the skill sets and experience we are looking for". I will never forget the looks on their faces. They were clearly not prepared, and I swore (cue "Gone With the Wind" background music), "As God is my witness, I'll never be that vulnerable and dependent on MegaCorp".


I'm pretty sure scenes like that have been taking place for hundreds of years.

-ERD50

It appears you did not either read the links I provided or consider the books, either, so I'm not going to continue this. What is happening today is on a much larger scale and at a rate several times faster than has ever happened before in history.

I will leave it at that, except to say those in the accumulation phase would be wise to take into account the nature of the polymorphous changes occurring right now in the world of work.

 

[ERD50]

It appears you did not either read the links I provided or consider the books, either, so I'm not going to continue this. What is happening today is on a much larger scale and at a rate several times faster than has ever happened before in history. ...

Everything is moving faster today.

I will leave it at that, except to say those in the accumulation phase would be wise to take into account the nature of the polymorphous changes occurring right now in the world of work.

OK, we can leave it at that, a convenient place to leave it since we agree. I'll go a step further - we ALL would be wise to take into account the nature of the polymorphous changes occurring right now in the world[-] of work[/-].

-ERD50

 

[Sasset]

At my MC, one of the interesting ways to get an ahead /increase to take a job at another MC. Then come back at to my MC 1 to 2 levels up. I have seen this happen many times. Doesn't say much for rewarding loyalty.

It surprised me how often they re-hire people. Never saw that at the other 2 MC I worked at.

 

[athena53]

At my MC, one of the interesting ways to get an ahead /increase to take a job at another MC. Then come back at to my MC 1 to 2 levels up. I have seen this happen many times. Doesn't say much for rewarding loyalty.

I'd forgotten about that; I saw that happen twice just in my own area. One came back, stayed a few years and left again. Another left, came back, moved to our London office, hated it, returned a year later (with the wife and 4 kids the company had also moved with him) and is still there. Rumor was that he'd negotiated a handsome increase when he moved to London and didn't give it up when he moved back.

There are a lot of things I'd do differently if I started my career over again but I'm happy to be out of it.

 

[sengsational]

I did an exercise recently...the annual figures from my SS statement adjusted by wage inflation.....

If you're curious about it, you can do the math pretty easily. https://www.ssa.gov/oact/COLA/awifactors.html gives you the wage inflation factors that SS uses.

 

[ChicagoGal]

Megacorp bank here as well (50,000+ employees). I would have been thrilled with your increase I'm smack dab in the middle of my grade band, and my base pay increase was 1%. In the last 8 years, I've had 3 years at 0%, 2 years @ 1%, 2 years @2% and 1 year @3%. We were told to budget 2.5% as an average this year (I do our budgets), and actually gave out an average of 1.3%.

At my grade band, I also have a targeted bonus of 20%, which gets modified depending on how well the bank does overall and how well I do personally. Many years ago, they moved more of the performance award potential into bonuses instead of base pay.

It is really important to look at total compensation, including benefits. We have quite good employee subsidized health care options (changing to HDHP plans only in 2 years which will be interesting), and a really nice fully funded pension plan. After 22 years with the organization, I would qualify for $20K/year (non-COLA) today and over $40K/year at my target date in 4 years.

So is it a great base pay increase? No. Am I satisfied with things overall? Yep. Certainly satisfied enough to stick with them to the end.

 

[lhamo]

The way that bonus compensation is distributed within a particular division may also have a negative impact on bonuses for employees with higher salaries. In my old org, each division was given an allowance of a set amount of the gross salary amounts to distribute as bonuses. The last year I was there it was 3%. I had lower level staff, with lower salaries, who I felt were undercompensated. It therefore made sense to offer them a higher percentage bonus in recognition of their strong contribution. And I could get that higher percentage most easily by lowering the percentage bonus of the more highly compensated employees who weren't working as hard. I think I ended up giving the person with the highest salary only a 2% bonus, while the person with the lowest salary (and the heaviest workload) got 10%. Luckily in that case, the comparative effort balanced things out -- if I had wanted/needed to offer the highest compensated employee a 10% bonus, it would have meant nothing left for anyone else.

Incidentally I ended up getting shafted by this system because my own bonus had to come out of the same divisional budget. I did get the standard 3%, but that was after 16 months of working 60-70 hour weeks in a job 2-3 levels above my official paygrade for the same salary I would have had in my old job.

 

[jazz4cash]

There's a lot to be said for regular annual increases. Even if they are small, the compound effect makes a big difference over time. Megacorp would sometimes delay increases from 12 to 15 months for lower ranked individuals in addition to squeezing the increase down. My perception was management taking one group members increase to divvy up among the rest. We did get increases 9 out of 10 years though.

 

[mh]

In software development land, it was pretty clear to me after a few years out of school that by 50 my days could very well be numbered. I'm 55 now and glad I was able to recognize that early on.


Sent from my iPhone using Early Retirement Forum

 

[cooch96]

Me too, but the article does mention that in many cases pay is a required field:

Today, pay increasingly is mentioned early in the process, either as a required field in online applications—which are used more often—or during initial interviews, say recruiters, compensation consultants and job seekers.

I quested for greener grass for several months last year. Several HR types requested that I state the lowest amount I'd be willing to work for them in my cover letter. I must've been screaming high, since I didn't even get to the interview phase.

I should've responded by asking what the maximum they were willing to pay would be. But I'm sure that would've cut the conversation just as short.

 

[eytonxav]

Its supply and demand. If there were more opportunities out there and people could jump ship readily, annual pay raises would be higher to retain talent. That coupled with low inflation causes most companies to keep raises at low rates. Promotions of course can be much greater.

 

[target2019]

I quested for greener grass for several months last year. Several HR types requested that I state the lowest amount I'd be willing to work for them in my cover letter. I must've been screaming high, since I didn't even get to the interview phase.



I should've responded by asking what the maximum they were willing to pay would be. But I'm sure that would've cut the conversation just as short.

Don't give one number. Use a range, and mention that your interested in the total package.

If they give you 12 weeks up front, of course you'll think over the bottom offer.

 

[athena53]

Don't give one number. Use a range, and mention that you're interested in the total package.

If they give you 12 weeks up front, of course you'll think over the bottom offer.

This is especially true now, when health insurance is all over the place. If Company 1 and Company 2 offer identical salary and bonus potential but Company 1 has a high-deductible plan and you pay 100% of premium for all your dependents but Company 2 has a lower deductible and generous subsidies for you and your dependents, they are not identical offers.

I've dealt with HR, though, and they can be really pigheaded about insisting that you be the first to put a number on the table.

 

[target2019]

If you're diplomatic response goes nowhere, it's a clear signal that you do not want to toil away for them. Also, it's pretty clear they are trading water.

If you hold steady with a market rate, and leave the door open, it could pay off later. That happened with current employer.

 

[UncommonSense]

For comparisons sake. I work for a top 50 company in the Fortune 500 and received my performance review yesterday. 6% salary increase and 13% bonus.
Our bonuses is an enterprise wide bonus based on a combination of company results and individual performance. (approx. 10-14% range)
I am in the lower 1/3 of my salary range, with a high review rating, so the salary increase is higher than the company average around 3%


Total package at my employer is pretty good. Pension fund is 100% funded, small 401K matches, low cost of living area, good medical benefits, etc.