Hiring and raises are starting to perk up but only modestly

http://www.washingtonpost.com/wp-dyn/content/article/2010/09/11/AR2010091100013.html

By Anne Kates Smith
Sunday, September 12, 2010

In a welcome change for recession-weary workers, employers are hiring again. What's more, instead of the non-cash rewards that companies have been doling out to prized employees (or at least the ones still standing), the little something extra next year might actually be money. "Salary increases are back," says Mercer compensation consultant Loree Griffith.

Hiring is starting to perk up. A recent survey by Mercer found that 27 percent of companies are expanding their overall workforce, and only 3 percent are in the midst of broad-based staff reductions. A year earlier, just 12 percent of firms surveyed were expanding and 15 percent were cutting back. Caution prevails, however, as 45 percent of companies are hiring just enough newcomers to replace workers who have left, and 25 percent are hiring only in critical areas.

Most workers will receive raises in 2011: 98 percent of organizations surveyed by Mercer are planning increases. But few employees will consider their pay bump generous. Surveys show that employers are projecting median salary increases of about 3 percent or a little less for 2011, up from about 2.5 percent this year. Employees with the highest performance ratings will do better. Mercer projects that average pay increases for the highest-rated employees will be 4.5 percent in 2011, compared with 2.7 percent for workers receiving an average rating and just 1.5 percent for those deemed to be less competent.

In 2010 bosses have been most generous in the oil-and-gas and pharmaceutical industries, where raises have averaged 3.2 percent and 2.7 percent, respectively. At the bottom of the scale, health-care and education employees are seeing 2.1 percent pay increases. Companies are once again focusing on money as the best way to retain workers and keep them happy. Over the past 18 months, limited budgets for raises have meant more perks, such as flexible work schedules, more time off, training and career development, and opportunities to participate in special projects. Career training is still big, but so is cold, hard cash.

How can you get your fair share? Don't be afraid to ask, ask at the right time and frame your request in the right way. Most raises are awarded in the spring, after an annual review. But you should plant the idea with your supervisor when you see the health of the company starting to rebound. A good time to make the request is just after you've won accolades for a significant accomplishment.

Remember that performance is measured in terms of quantity, quality, cost and timeliness, says executive coach Robert Lorber, of Lorber Kamai Consulting Group, in El Macero, Calif. Have you pitched in to cover for laid-off colleagues or helped to increase your company's market share? Reduced errors or improved production? Gotten customers to pay more quickly or shaved your division's budget through cost savings? Have you continued to meet or beat deadlines despite staff reductions?

Document each success. Now more than ever, companies emphasize variable pay models based on contributions to the bottom line. Show that you're moving the needle in the right direction, and your boss just might show you the money.


-- Kiplinger's Personal Finance