The improving economy is creating more jobs, and that is making more workers confident about their employment situations. A recent Glassdoor employment confidence survey found that more people expect to land a raise this year than did last year, and roughly one-third of them are prepared to head for the exit if that pay increase does not come through.
Gaining the upper hand
The Glassdoor survey, which has been conducted every quarter since the fourth quarter of 2008, found that workers are far less worried about job security than at any other point in the past five years. The percentage of respondents who are concerned they'll be laid off in the next six months sunk from 26% in early 2009 to 13% in the fourth quarter of 2014.
That increased feeling of security reflects overall the nation's consistent job growth since the end of the Great Recession. After peaking at 10% in 2009, the unemployment rate had fallen to just 5.8% as of November 2014.
Employees now feel like they're in control, which could signal a shift in the balance of power away from employers for the first time in years.
That power shift could mean that employers must now think a lot harder about retention, and that employers that have created the consistently best working environments for employees in recent years could benefit from an influx of talent as more workers begin window shopping.
According to Glassdoor, that window shopping is likely to happen if workers don't get a raise. Thirty-five percent of surveyed workers said they would look for a new job if employers don't offer more money this year.
Overall, 43% of surveyed employees said they expect that employers will bump up their pay in 2015 via either a merit-based raise or cost-of-living increase. That's up nearly 10% from the number that expected raises during the recession. College graduates are among the most confident that they'll make more money this year, with 50% expecting a pay increase.
On average, people said they believe their increase will run between 3% and 5%, but 12% of workers think their pay will rise by between 6% and 10% in 2015.
What it means
The Federal Reserve for years has kept interest rates incredibly low because of fears that low inflation rates signal that the nation's economic rebound is fragile, but inflation could climb in the coming year if wage pressures increase. That could translate into a growing willingness by the Fed to tap the brakes on economic growth by beginning to increase rates, which might not be an entirely bad thing. People relying on investment income have seen little benefit from rock-bottom interest rate policies over the past five years, and they would certainly welcome an increase in rates. Banks would also likely benefit from rising rates, which could support lending spreads, particularly if pay increases encourage workers to seek out loans for new cars and homes. Regardless, the biggest beneficiary of this trend would undeniably be workers, as this survey suggests they are likely to have far more, and better-paying, employment options this year than in 2014.