Is It Time to Give Your Employees a Raise?

Can it really be true that the U.S. job market is finally recovering? According to the Washington Post, hiring in jobs with a median hourly wage ($20 or more) is picking up steam in areas such as construction, manufacturing, and professional services. In the past six months, more than a third of the new jobs created have been in high-wage industries, while the opposite is true of many low-paying jobs, where growth has declined.

While all of this is great news, the stabilizing economy also signals another trend: Your employees may now be expecting a raise! The truth is, employees think about pay a lot. According to Jeff Haden, “Employees think about pay all the time. Every time they deposit their paychecks they think about their pay. To a boss their pay is a line item; to employees, pay is the most important number in their family’s budget.” And many college graduates who invested in attending college to increase their earning potential have lived for years with the disappointing reality that employers couldn’t pay nearly what they expected. Now these employees are being told that their time has come.

This week’s headline on Times.com’s Money caught my attention: 5 Ways to Get a Big Raise Now. Author Donna Rosato quotes a Mercer survey as saying that workers in 2015 should be receiving an average 3% raise, with high-performing employees likely to receive even more. (High performers apparently received a 4.8% increase in 2014.)

Employers, if your employees read Rosato’s tips, you can soon expect your employees to be presenting you with client testimonials, emails from supervisors, and documented feedback from managers about their stellar work performancd. They’ll be quantifying their accomplishments to show you how they’re delivering what you require and more. If you’ve already given one employee a raise, they’ll be comparing their work to that employee’s, and giving you printouts from PayScale.com to prove they’re worth more. And they won’t take no for an answer, which means that if you aren’t able to give them a raise yet, you’ll need to counteroffer creatively with flex time, one-time bonuses, more vacation days, greater health benefits coverage, cell phone reimbursement, or the promise of a review and salary increase in the near future.

Is it time to give your employees a raise? It may be, given that the skills gap is creating a growing competition for the same talent. As the employment market heats up, retaining your top employees is becoming both critical and increasingly difficult to do. So pay attention and be prepared–a line of employees may be forming at your door as we speak!

When is it okay to take advantage of someone? Here’s when you should!