What exactly is a “bad,” “standard,” or “good” annual raise? If I am told a hard percentage and don't get it, should I look elsewhere?
"TLDR:  You will probably need to move to a different employer to get the raise you want/need/deserve. Some employers, in the US, punish longevity through a number of practices.  My wife worked as a nurse for about 20 years.  During that time she had many employers, leveraging raises with job changes.  She quit nursing about 6 years ago and was being paid $38/hour at the time.  She had a friend that worked in the same system for 18 years.  They had the same position in the same hospital that friend's current rate of pay:  $26/hour.  You probably don't want to be that person. Given your Stack Overflow participation, I would assume you are some type of web developer.  I would recommend updating your resume, and moving for a 20% increase or more.  You'll get it as it is a great time to be a web developer.  Spending on IT tends to go in cycles, and right now budgets are very healthy for hiring new talent.   While your current company might not have enough money in the budget to give you a raise, they would not hesitate hiring someone with your skills at 95K if they had an opening.  Its common, but frustrating to all that are involved except the bean counters that looks at people like us as commodities.   Think about this:  both sides of the table agree that you deserve a 5K raise.  But lets say next year only 3k is in the budget.   So you are out the 5k you should have been given this year, plus the 2k that you won't get, plus whatever raise was fair for you next year.  That is a lot of money!  Time to go! Don't bother on holding onto any illusions of a counter offer by your current employer.  There will be too much resentment.  Shake the dust off your feet and move on.    Edit: Some naysayers will cite short work histories as problems for future employment.  It could happen in a small number of shops, but short work histories are common in technology that recruiters rarely bat an eye.  If they do, as with any objection, it is up to you to sell yourself.  In Cracking the Code Interview the author cites that no one is really expecting you to stay beyond 5 years.   Something like this would work just fine:  ""I left Acme because there were indications of poor financial health.  Given the hot market at the time I was able to find a new position without the worry of pending layoffs.""  If you are a contractor six month assignments are the norm.  Also many technology resumes have overlapping assignments.  Its what happens when someone is in demand." Any such number would depend on the country, the market, and the economic situation - especially inflation ratio. Generally, if you are not in a booming or a dying technology, getting a raise above the inflation ratio is 'good'; anything below is poor. Keep in mind that unless you have a contract that says you get a certain amount of raise every year, the employer is not required to give you any raise. The quality of a raise is too subjective for anyone to tell you how to judge it.  You either get a raise you can live with, it makes you content/happy, and you continue working there, or you get a raise that does not satisfy you, and you jump ship to get more money. Some (most?) employers know that raises can be the tipping point for employees deciding to leave.  If you consistently receive raises greater than inflation rate, the message is that the employer values you.  If the opposite, they value you enough to continue your employment, but are willing to replace you if you decide to leave. Key thing here is there are three ways of getting increased pay with your current employer.  Cost of living or annual raise is the one that we are discussing.  Merit based raises are a second way.  If you think you deserve a raise, due to loyal consistent contribution, or contributing above your duty, or for whatever reason, then ask for a raise.  The third way is to be promoted or transferred to a higher paying position.  Often times, you should also make your case to your supervisor why you should have the new position, similar to asking for a merit raise. You are not actually entitled to any raise at all, unless you had something contractually (legally binding) which made that so. I'm answering this from the UK, but it has been common practice for people over the last 10 years or so to receive no yearly raise, in some sectors. This is what I would consider a bad raise - if wages are not kept in line with inflation, you are effectively earning less every year. In this regard I would not work for any employer who did not offer an annual raise that was at the very least covering the rate of inflation (these rates are easy to find in your country by Googling it). In terms of a standard raise, I would argue there is no such thing. This depends on the industry/sector you work in, your employers opinion of your performance (note I've used the word opinion because sometimes you may think the effort you put in is different to what they think - be prepared to give evidence of what you've achieved for them, with things to back it up). A good raise is anything which is way above a standard raise. Since there is no concise definiton of a standard raise, this is also hard to quantify. As others have mentioned do not stay in a role where you are not being given a raise that covers inflation, because it means every year you have less purchasing power, which is akin to your salary going down. It's very easy to justify to an employer you're leaving - and indeed one you're going to - why you're making the move under these conditions. "What makes a ""standard"" raise depends on how well the economy is doing, how well your particular industry is doing, and how well your employer is doing. All these things change constantly, so anyone who says, ""a good raise is 5%"" or whatever number is being simplistic. Even if true when he said it, it won't necessarily be true next year, or this year in a different industry, etc. The thing to do is to look for salary surveys that are reasonably current and applicable. If today, in your industry, the average annual raise is 3% -- again, just making up a number -- then that's what you should think of as ""standard"". If you want a number, okay: In general, as a first-draft number, I look for a raise that's 2% or so above the current inflation rate. Yes, of course I'd LIKE to get a 20% raise every year, but that's not going to happen in real life. On the other hand if a company gives me raises that don't keep pace with inflation, than barring special circumstances I'm going to be looking for another job. But there are all sorts of special circumstances. If the economy is in a depression and unemployment in my field is 50%, I'll probably figure I'm lucky to have a job at all and not be too worried about raises. If the economy is booming and all my friends are getting 10% and 20% raises, then I'll want that too. As others have said, in the United States at least, the best way to get a pay raise is to change jobs. I think most American companies are absolutely stupid about this. They don't want to give current employees big raises, so they let them quit, and then hire replacements at a much higher salary than they were paying the guy they just drove to quit. And the replacement doesn't know the company and may have a lot to learn before he is fully productive. And then they congratulate themselves that they kept raises this year to only 3% -- even though total salaries paid went up by 10% because the new hires demanded higher salaries. They actively punish employees for staying with the company. (Reminds me of an article I read in a business magazine by an executive of a cell phone company. He bemoaned the fact that in the cell phone industry it is very hard to keep customers: they are constantly switching to other vendors. And I thought, Duh, maybe it's because you offer big discounts for the first year or two, and after that you jack your prices up through the roof. You actively punish your customers for staying with you more than 2 years, and then you wonder why customers leave after 2 years.) Oh, if you do change jobs: Absolutely do not buy a line of ""we'll start you off with this lower salary but don't worry because you'll get a big raise in a year"". When you're looking for a job, it's very easy to turn down a poor offer. Once you have taken a job, leaving to get another job is a big decision and a lot of work. So you have way more bargaining power on starting salary than on raises. And the company knows it and is trying to take advantage of it. Also consider not just percentage increase but what you're making now versus what other people with similar experience are making. If people comparable to you are making $50k and you're making $30k, you're more likely to get a big raise than if you're already making $80k. If the company says, ""We just don't have the budget to give you a raise"", the key question is, ""Is that true?"" If the company is tottering on the edge of bankruptcy and trying to cut costs everywhere, then even if they know you're a good and productive employee, they may really just not have the money to give you a good raise. But if business is booming, this could just be an excuse. It might be an excuse for ""we're trying to bleed employees white so the CEO can get another million dollar bonus this year"". Or it might be a euphemism for ""you're really not a very useful employee and we're seriously thinking of firing you, no way we're going to give you a raise for the little bit of work you do when you bother to show up"". My final word: Be realistic. What matters isn't what you want or think you need, but what you are worth to the company, and what other people with similar skills are willing to work for. If you are doing work that brings in $20k per year for the company, there is no way they are going to pay you more than $20k for very long. You can go on and on about how expensive it is these days to pay the mortgage and pay medical bills and feed your 10 children and support your cocaine addiction, but none of that is relevant to what you are worth to the company. Likewise if there are millions of people out there who would love to have your job for $20k, if you demand a lot more than that they're going to fire you and hire one of them. Conversely, if you're bringing in $100k a year for the company, they'll be willing to pay you a substantial percentage of that." "your question is based on a false premise.  there is no ""standard"" for raises.  some jobs in some years see huge raises. other years those same jobs may see average pay rates drop. if you want a benchmark, you would be better off looking at typical pay rates for people in your job, in your city with your experience. sites like glassdoor can provide that type of information. if you are at the low end of that range, you can probably push for a raise. if you are at the high end, you may find it more difficult. typically your employer will pay you just enough to keep you from leaving. so they will offer you as little as they think you will accept.  you can either accept it or find another job that pays more. if you work in software, then you can probably make more by switching jobs. if you work in food service, you might have more trouble finding higher pay elsewhere. if you do find another employer, you might be able to elicit a counter-offer from your current employer. in fact, even suggesting that you will look for another employer may prompt your current employer to be more generous.  that said, if your employer thinks you are on your way out, they might cut your bonus or lay you off." "There are many variables to this answer. One is, how close are you to the average salary range in the industry you are working in. If you are making more than average it would make sense that you are not getting a big raise from the employer's perspective. You have to be a top performer if you are looking for the top salary range. Big raises come from promotions or new jobs, generally speaking.  The short and personal answer is, I worked at a big company (bank) and now know that companies do not give large raises to people as a rule.  Honestly the only way to make good $ is to leave, all employers have all kinds of excuses as to why they are not giving you significant raises. Large raises and bonuses are reserved for ""management"". The bigger the company, the less likely it is that they will give you raises just because, esp. above 3-5%. At the same time, the market sets the rate, and if you are not getting passively recruited, it may mean that you need to work on getting a broader skill set if you are looking to make more $ somewhere else. The bottom line is, you have to think of yourself as a free agent at all times. You also need to make yourself more attractive as a potential hire elsewhere."
Not saying it is bad, just saying they put a positive spin on it when in fact it just something that makes good business sense.   Both you and I know that Reddit is filled with people complaining about minimum raise and earning a living...etc. This article paints Costco as the good guy, but overall it means one guy gets a well paying job while another one gets no job at all. I was having a conversation about this recently because I got a raise and it kind of surprised me I didn't have to fight so much for it. Companies regularly give us CPI increases but in certain fields (especially IT at the moment) wage growth is so rapid that in 1-2 years you're 10-20% behind your peers.  A lot of people change jobs regularly to avoid this. I've fought for raises and kept moving around to different departments to keep my wage up to baseline but I get that for a lot of people thats not possible due to company culture. "In general, when dealing with quantities like net income that are not restricted to being positive, ""percentage change"" is a problematic measure. Even with small positive values it can be difficult to interpret. For example, compare these two companies: Company A:  Company B:  At a glance, I think most people would come away with the impression that both companies did badly in Y2, but A made a much stronger recovery. The difference between 99.7 and 99.9 looks unimportant compared to the difference between 100,000 and 40,000. But if we translate those to dollars: Company A: Y1 $100m, Y2 $0.1m, Y3 $100.1m Company B: Y1 $100m, Y2 $0.3m, Y3 $120.3m Company B has grown by a net of 20% over two years; Company A by only 1%. If you're lucky enough to know that income will always be positive after Y1 and won't drop too close to zero, then this doesn't matter very much and you can just look at year-on-year growth, leaving Y1 as undefined. If you don't have that guarantee, then you may do better to look for a different and more stable metric,  the other answers are correct: Y1 growth should be left blank. If you don't have that guarantee, then it might be time to look for a more robust measure, e.g. change in net income as a percentage of turnover or of company value." "It's simple. At 100% match, it would take a ""long"" time for bad fees to negate the benefit. Longer than the average person stays with one company.  Even though $50/10 shares is crazy, if you wait till you have $500, it's 10%. Still crazy, but you are still getting 90% of the match. I'd avoid this, however, and just go with the closest thing they have to an S&P fund. Invest outside this account to save the right amount to fund your retirement. 2% total isn't enough, obviously." Yeah, I mean, what it really comes down to is the fact that life isn't fair.  I would think that if your company is squeezed enough that it's paying a lot more for new employees who do what you do already, then if you go to your boss and ask for a raise, he's not going to say no. It's way easier (and cheaper) to keep an employee, particularly a good one, than to find someone new. Just a thought. This is bad statistics. If you look at people who jumped ship, of course you're going to see bigger increases in salary because you're not counting those that looked for a new job and didn't find a better offer. They stayed put.  People are complacent but companies are, too. Employers aren't putting a lot of effort into firing bad employees as soon as they can. So there are employees that aren't jumping ship and could be paid more but there are also employees that should be kicked off the ship and paid less, but aren't.  All that said, staying put is easier than moving and there's a price for it. If you're willing to move around, you might do better. Might not. If you only look around at the ones that did move, of course it's going to look like they did better! I guess that means I should be making about $250k a year right now.  I've been at my company for 16 years.  The wage and profit sharing program beat the market wages in my area by a wide margin.  Not all companies are interested in screwing their employees. From a long-term planning point of view, is the bump in salary worth not having a 401(k)?  In this case, absolutely. At $30k/year, the 4% company match comes to about $1,200 per year.  To get that you need to save $1,200 yourself, so your gross pay after retirement contributions is about $28,800.   Now you have an offer making $48,000.  If you take the new job, you can put $2,400 in retirement (to get to an equivalent retirement rate), and now your gross pay after retirement contributions is $45,600.   Now if the raise in salary were not as high, or you were getting a match that let you exceed the individual contribution max, the math might be different, but in this case you can effectively save the company match yourself and still be way ahead. Note that there are MANY other factors that may also be applicable as to whether to take this job or not (do you like the work? The company? The coworkers? The location? Is there upward mobility? Are the benefits equivalent?) but not taking a 67% raise just because you're losing a 4% 401(k) match is not a wise decision. I had a colleague turn down a raise once because he believed that female colleagues were already being paid well below his salary and it was unfair to further increase this gap. For very public figures raises are often declined as a form of leadership: showing that management is willing to forgo bonuses and salary increases as a form of solidarity with the employee population.  Some leaders forgo a salary altogether (or take a $1/year salary). "Do you recall where you read that 25% is considered very good? I graduated college in 1984 so that's when my own 'investing life' really began. Of the 29 years, 9 of them showed 25% to be not quite so good.  2013     32.42, 2009     27.11,  2003     28.72,  1998     28.73,  1997     33.67,  1995     38.02,  1991     30.95,  1989     32.00,  1985     32.24.  Of course this is only in hindsight, and the returns I list are for the S&P index. Even with these great 9 years, the CAGR (compound annual growth) of the S&P from 1985 till the end of 2013 was 11.32%  Most managed funds (i.e. mutual funds) do not match the S&P over time. Much has been written on how an individual investor's best approach is to simply find the lowest cost index and use a mix with bonds (government) to match their risk tolerance.  ""my long term return is about S&P less .05%"" sounds like I'm announcing that I'm doing worse than average. Yes, and proud of it. Most investors (85-95% depending on survey) lag by far more than this, many percent in fact)" "This quote kind of shocked me:   ""A well-run organization turns over 10% of their organizations, including senior leadership.""  I'm not in management, but I have *never* heard anyone say before that employee churn is a good thing. And wanting fully 10 % of all employees to resign every year? That sounds completely insane to me. Is that really normal? Am I not getting something?  My current employer works hard on trying to retain employees. When employees quit, we need to train the replacement, it's probably going to take 6 months until the new employees is reasonably productive. Employees are actively encouraged to find new positions within the company and we have actually rehired several employees that quit to do something else and then decided they want to come back. This all seems logical and normal to me.  The mindset of wanting to push a significant portion of your workforce away each year is utterly alien to me. Would somebody elucidate me?" Most people aren't 'paid pretty darn well' when looking at historical real wages.  This is the result of many things, one being corporate consolidation where any and all efficiencies are passed on to the executives and shareholders.  Meanwhile, your wife's salary has been slowly eroded away for the past 30 years.  I get trying to see the positive side but c'mon man, you gotta wake up. "Some companies have a steady, reliable, stream of earnings. In that case, a low P/E ratio is likely to indicate a good stock. Other companies have a ""feast or famine"" pattern, great earnings one year, no earnings or losses the following year. In that case, it is misleading to use a P/E ratio for a good year, when earnings are high and the ratio is low. Instead, you have to figure out what the company's AVERAGE earnings may be for some years, and assign a P/E ratio to that." Maybe the disconnect is in how different people view work and money. In the standard view, work is something negative you do, in order to get something positive - money, or at least the act of spending money gets you something positive.  If the work is particularly unpleasant, one would expect employees to demand more money to cancel out the negative things they have to put up with.  On the other hand, if the work itself is a net positive even before pay, then when combined with pay, the combined positive may be worth more than the raise they're offered at another company - especially if the new conditions would be poor, and would cancel out the raise, leaving them unhappier, despite having more pay.  Of course, we're not a bunch of robots weighing out positive and negative units, much of which are near impossible to measure anyway. I assume a lot of it is just going with gut reactions, using approximations and fuzzy predictions in decisions that sometimes appear rational, but when looking at the underlying data points, may be built on rather irrational hand waving... Future job offers can go up or down depending on your disclosure, people can interpret it as bragging... maybe you could just use a percentage?