Author Topic: Is a 4 percent raise yearly good enough?  (Read 25950 times)

homeymomma

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Is a 4 percent raise yearly good enough?
« on: June 03, 2013, 11:37:41 AM »
Hi all,

My husband just came back from his annual boss-takes-him-out-to-lunch raise date, and announced this time it's a 4% raise.

Is that OK? I feel like last year it was 5%. He has no benefits except a few paid holidays.

He is literally the only employee and makes 64,000/year, I guess now it's 66,500.

I stay home with our baby, and take care of all the finances. It would take some serious cajoling to get him to EVER bring up pay to his boss.

Should I leave well enough alone or should I shove him back in there to ask for more?

Thanks for your thoughts!

Bakari

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Re: Is a 4 percent raise yearly good enough?
« Reply #1 on: June 03, 2013, 11:42:04 AM »
There are a lot of jobs in the world with no automatic scheduled raises at all.  I've had a lot of jobs (like 30, give or take) and only one ever had an automatic scheduled raise.
So I suggest being happy with what you got.

Joet

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Re: Is a 4 percent raise yearly good enough?
« Reply #2 on: June 03, 2013, 11:44:34 AM »
a far more lucrative technique, typically, is to shop yourself on the job market (competitors? partners?), and return with an offer in hand. Be prepared for the bluff to be called, though. Otherwise there isnt a lot of leverage.

Moving up/on every 3-4 years is also a good idea. I've heard being in one role/title for too long looks like stagnation.

homeymomma

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Re: Is a 4 percent raise yearly good enough?
« Reply #3 on: June 03, 2013, 12:01:30 PM »
Excellent advice. However, my husband seems to have found the only job in the country that requires his particular skill set. There are legitimately NO competitors. Also, he's a photographer, so just having a steady salaried job is huge for us.

Left

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Re: Is a 4 percent raise yearly good enough?
« Reply #4 on: June 03, 2013, 12:17:03 PM »
hm can he freelance the photos he takes? If they aren't owned by the company and all...?

CorpRaider

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Re: Is a 4 percent raise yearly good enough?
« Reply #5 on: June 03, 2013, 12:17:47 PM »
I think just compared to general labor figures, 5% in 2012 and 4% in 2013 has got to be doing pretty well.  Lots of industries haven't had a raise since like 2007 and many have probably faced cuts.  Knowing nothing about the supply demand dynamics for labor in photography, I would feel pretty good about it if I were him.

simonsez

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Re: Is a 4 percent raise yearly good enough?
« Reply #6 on: June 03, 2013, 12:30:52 PM »
If your husband is indeed that scarce and the amount of revenues he is able to bring in exceed all the costs associated with having him as an employee (need both conditions; doesn't matter if you are scarce if the money you are responsible for bringing in is less than what you earn), then he has about as good of an initial bargaining chip that you can ask for.  The only thing that could be better would be to have an offer somewhere else for more pay/benefits (including starting own business).  You should have your husband try to quantify the benefit of his relationship with his boss.  i.e. Is it a good one?  Are they friendly or strictly business-like with each other?  If the relationship is a positive one, how much would your husband be willing to accept to make it worth it to consider elsewhere with a different boss (or none at all)?

Also, if talking to the boss about a raise is an obstacle, maybe your husband would feel more comfortable asking about benefits rather than direct further increases in salary.

homeymomma

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Re: Is a 4 percent raise yearly good enough?
« Reply #7 on: June 03, 2013, 12:47:51 PM »
They do have a good relationship, very friendly, but his boss does pull rank unexpectedly sometimes. My husband has the (perhaps unusual?) position of knowing exactly how much the company makes, as included in his job is putting together and finalizing contracts with every client. From what he's said in the past, it sounds as if he feels his pay is adequate compared to the business the company does from year to year, although he has taken on the lion's share of the work in his time there. There is a lot of proprietary equipment used, and starting his own business (in the same "field") is not an option, nor does he own the photographs that he takes.

Asking for specific benefits is a great idea, though. Any suggestions? I have sort of been looking into the different types of IRAs, which have larger limits, but can't figure out of the tax benefits are better than our Roth IRAs. Medical doesn't seem like a reasonable request, because he's the only employee. I guess I'm not familiar with small business benefits because we've never had any!

simonsez

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Re: Is a 4 percent raise yearly good enough?
« Reply #8 on: June 03, 2013, 01:27:59 PM »

I have sort of been looking into the different types of IRAs, which have larger limits

That is news to me.  I thought all IRAs had the same contribution limits.

From the IRS:
"For 2013, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:
$5,500 ($6,500 if you’re age 50 or older), or
your taxable compensation for the year."

As far as benefits to ask for, I have no experience in dealing with small business HR topics myself, just a FYI.  It sounds like more paid vacation days or sick leave would be a good start.  Flexible work time is always a popular one.  Commute/parking subsidy? 401k? 

BlueMR2

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Re: Is a 4 percent raise yearly good enough?
« Reply #9 on: June 03, 2013, 01:33:15 PM »
A 4% raise would be incredible!  I've not seen any raise at all in a couple years, and I know plenty of people that have gone much longer without one!

rugorak

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Re: Is a 4 percent raise yearly good enough?
« Reply #10 on: June 03, 2013, 01:57:35 PM »
I'd love a 4% raise. I haven't had that large of a raise in years. I'd say as long as your raises are greater than or equal to inflation you are doing well. You at least don't have a loss of income. And if he thinks his compensation is fair given the income of the company, etc. then it probably is. Other benefits are potentially good. But I think if you surveyed the crowd you would find 4% is pretty generous compared to many other employers out there.

superheropunk

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Re: Is a 4 percent raise yearly good enough?
« Reply #11 on: June 03, 2013, 02:00:00 PM »
Yes.

kudy

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Re: Is a 4 percent raise yearly good enough?
« Reply #12 on: June 03, 2013, 02:05:05 PM »
I had an employer kick me a "bonus" every month to buy individual health insurance/contribute to an HSA - maybe ask if they can provide that for you.

DoubleDown

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Re: Is a 4 percent raise yearly good enough?
« Reply #13 on: June 03, 2013, 02:55:56 PM »
If you'd really like to do something nice (and deserved) for your husband, tell him how proud you are that he got this raise!! If there's an underlying, unspoken view that the raise wasn't good enough, that can be very damaging to a relationship from the husband's perspective. As a general rule, most men like to be viewed by their wives as strong providers.

Another Reader

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Re: Is a 4 percent raise yearly good enough?
« Reply #14 on: June 03, 2013, 03:40:35 PM »
Before I asked for additional compensation, I would look at two things.  First, how much has the business grown?  If it has increased 30 percent in the last year, particularly if the growth resulted from my efforts, then I would have a discussion about compensation centered around that.  Second, if my role changed and I took on additional work or responsibilities, then I might ask for more of a raise. 

If the business is just steady or is growing slowly and nothing else has changed, I would be very happy with a 4 percent raise.  It's more than inflation, and more than most people are getting right now.

huadpe

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Re: Is a 4 percent raise yearly good enough?
« Reply #15 on: June 03, 2013, 04:16:38 PM »
Given this is a small business and he knows the books already, maybe ask about an incentive scheme?  So instead of just asking for a flat pay hike, ask for something along the lines of "If I bring in $10,000 in new business above this time last year, I get a $500 bonus"?

Matt F

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Re: Is a 4 percent raise yearly good enough?
« Reply #16 on: June 04, 2013, 07:13:18 AM »
I agree with the incentive option, or if he really is a rare fit for the job, he could ask about getting some ownership in the company/profit sharing.  That would tie him tighter to the owner (less risk of him leaving) and he can tell the owner it only increases his motivation to increase profits.  His other alternative (the one I favor) is bring a spreadsheet showing how much extra money he made for the company versus the previous year to show why he is now worth more money.  If he did not make the company more money than the prior year, he probably should not ask for an additional raise unless the whole industry is increasing salaries significantly.  This is also something to think about for next year's raise session, is how can I make more money for the company now, and bring evidence to the meeting to justify a bigger raise.

Also my two cents, just because other industries/people are not getting raises, that should have zero impact on you.  HOWEVER, if people in your industry/job description generally are not getting raises, or are working for less than you, that DOES have a big impact, because management can hire a replacement for you for cheap enough to offset the costs of transitioning a position.  Then you have to show that your performance is way above the norm and thus justifies a raise.

simonsez

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Re: Is a 4 percent raise yearly good enough?
« Reply #17 on: June 04, 2013, 07:19:01 AM »
...just because other industries/people are not getting raises, that should have zero impact on you.  HOWEVER, if people in your industry/job description generally are not getting raises, or are working for less than you, that DOES have a big impact...

Couldn't have said it better.  It is all about the specific context of your husband's work situation and not about aggregate dynamics.

Adventine

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Re: Is a 4 percent raise yearly good enough?
« Reply #18 on: June 04, 2013, 07:40:19 AM »
If you'd really like to do something nice (and deserved) for your husband, tell him how proud you are that he got this raise!! If there's an underlying, unspoken view that the raise wasn't good enough, that can be very damaging to a relationship from the husband's perspective. As a general rule, most men like to be viewed by their wives as strong providers.

+1. Homeymomma, the time to talk to your husband about a bigger raise is BEFORE the annual talk with his boss. If you "shove him back in there", you don't just risk hurting his feelings. You risk making him look greedy to his boss.

homeymomma

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Re: Is a 4 percent raise yearly good enough?
« Reply #19 on: June 04, 2013, 09:08:59 AM »
Haha thanks everyone! Don't worry, hubs knows I'm very proud of him and he is very happy not to have to ask for raises, they just come like clockwork. I had personally been wondering why it was 4% after last year was 5%, so I posted the question on here to see if anyone had a baseline - sounds like any at all is great, and even better if it's above inflation. That's good to learn! Also, apparently his boss did explain to him that it was because a ton of clients had cancelled this past year, which he blames on the uncertain economic climate (their business is closely tied to new real estate and building).

Definitely makes me realize how important it is to negotiate as high a starting salary as possible ... because it really is setting the foundation for the whole future of work at the company.

Additionally, it's very hard to gauge past company performance vs now, because in the past there were like 20 employees, now there are between 1 and 4, depending on the season. I suppose this means that business is shrinking, or that people left the job and weren't replaced. I think it's both.

Regarding the IRA limits I mentioned earlier - it's my understanding that SEP and SIMPLE IRAs (not sure if he could even open either through work) have higher limits than the traditional 5,500. Haven't looked into it too much yet so I could be way off base.

Thanks so much for your input everyone! I'll make sure to give my husband the good lovin' tonight. Just kidding.

Sort of.

DoubleDown

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Re: Is a 4 percent raise yearly good enough?
« Reply #20 on: June 04, 2013, 03:19:58 PM »
Haha thanks everyone! Don't worry, hubs knows I'm very proud of him
...
Thanks so much for your input everyone! I'll make sure to give my husband the good lovin' tonight. Just kidding.

Sort of.

Ha! Way to go!

sol

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Re: Is a 4 percent raise yearly good enough?
« Reply #21 on: June 04, 2013, 07:43:10 PM »
...just because other industries/people are not getting raises, that should have zero impact on you.  HOWEVER, if people in your industry/job description generally are not getting raises, or are working for less than you, that DOES have a big impact...

Couldn't have said it better.  It is all about the specific context of your husband's work situation and not about aggregate dynamics.

Unless you're a federal employee, and then your specific work context is irrelevant to your pay regardless of your performance or what you could make elsewhere.  Congress sets my salary, and they haven't given me a raise in three years.

So I say you should be thrilled with your 4%.  2 million feds would be.