As you know, everyone does not get the same pay raise. So, what are the factors that determine higher pay raises to some, but not to others. In a nutshell, promotions and higher pay raises are given to those who have:
- A higher level of education or certification
- Skills that are in high demand with a low supply of candidates
- Talent that is unique and needed by a company
- Competencies that provide a required expertise within an organization
The marketplace recognizes workers who have distinctive talents and skills that are in demand or certifications that add value. They should either increase productivity, improve performance, reduce manhours or decrease costs. Those are the functions that can leverage their contribution, resulting in higher rewards. An accelerated economy has produced a tight labor market and is putting a premium on jobs that expand growth or shrink expenses.
One of the problems is that pay raises have been depressed over the past 10 years against the acceleration of critical skills needed over the past 2 – 3 years. New employees are being offered more pay and incentives over current employees. This is especially true for employees who may not have kept up on the latest technology within their function.
According to a Bankrate survey, more than 60% of American workers making under $30,000 have not gotten pay increases in the past year. That was not true for those making over $55,000. While lower paid workers have gotten a strong bump in 2020, they are by far receiving less of the money-pie than others. Workers at this level are being replaced by cost saving programs such as artificial intelligence, computer systems or new technology that is eliminating their jobs.
So, what do you do? Some thoughts:
- Make sure you are technically up to date in your skills and function. Take a course or get a certification in a critical area. Be at the state-of-the-art level and you will do much better than those who are not up to date.
- Meet with your boss, human resources, a mentor, or a career coach for guidance as to what you must to do to advance your career. Without this information you could be fishing in the wrong pond.
- Test the market to find out what’s going on in your function and industry. Use a coach to find potential opportunities and alternative career directions in areas that hiring managers are looking for candidates. You may be looking in the wrong place.
- Compare and assess options against your “must have” criteria. Your current job may be saturated with peers looking for the same job in your current industry, while another industry has a shortage.
At times it makes sense for a long-term strategy to move sideways in compensation in order to get skills and experience in another job function within the same job category. The greater your horizontal experiences, the greater your vertical value to an organization.
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