Thanks to this year's historically low unemployment rates and the related labor shortage, U.S. workers should anticipate slightly higher pay raises in 2019, according to a new survey by Willis Towers Watson. Its study of 814 companies "representing a cross-section of industries" also showed that employers intend to give their top performers the biggest bumps.
"After a decade of consistently flat pay raises, we are witnessing a slight uptick as companies are feeling pressure to boost salaries, given the low unemployment rate and the best job market in many years," said Willis Towers Watson North American business leader Sandra McLellan in a press release. "While companies have been able to hold the line on raises, the tides are changing."
How much can you expect?
The 2018 General Industry Salary Budget Survey showed that U.S. employers project that they will give professional (i.e., salaried, non-management) employees raise averaging 3.1% in 2019. That's a modest uptick from 3% this year.
Hourly workers will see a similar increase of 3% in 2019, up from 2.9% in 2018. Pay hikes have hovered in this range for the past decade; 2008 was the last time a significantly larger (3.8%) average raise was seen.
Star performers, however, have generally done markedly better. The highest-rated employees earned 4.6% in raises in 2018, compared to the 2.7% average raise given to employees with an average rating.
"A growing number of companies are coming to grips with the fact that employees are more willing to change companies to advance their careers and to talk openly about their pay," McLellan said. "As a result, organizations are facing increased pressure entering next year to devise a focused strategy and plan on how to allocate their precious compensation dollars or risk losing some of their best talent."
Discretionary bonuses are also expected to be slightly higher in 2019. But performance bonuses -- which are tied to specific company and employee goals -- are projected to be flat or decrease slightly.
What can you do?
Ideally, you'll put yourself in the best possible position to earn a solid raise by being an indispensable top-tier performer. If you're not already there, it's probably not too late to start trying to up your game. Show that you're worth getting paid more by working harder, volunteering for projects, and being open to anything asked of you.
The other way to get a raise is to be willing to leave. In a tight job market, it's possible to make a lateral move for more money because it's harder for companies to find qualified candidates. Still, while getting paid more is great, it can be unwise to leave a job you like over a small amount of money.
If you feel you deserve a bigger raise than you get, talk with your boss. Collaborate to figure out what you can do to make yourself more valuable to the organization, create an action plan that includes clear deliverables for you, and set up a schedule of check-ins with your boss to discuss how you're faring. Be realistic, but fight to get what you deserve.