2024 pay raise statistics, how employees and managers should respond after a pay raise request from the former has been turned down; frequently asked questions about pay raises.
Guide for employees
In 2024, 71% of senior management representatives plan to give a raise of 4% or more. This figure is above the average of 3% offered in previous years but falls short of the 4.4% average in 2023.
So, your manager was not in the above group. It’s very tempting to react emotionally, but do all you can to give it at least some time.
As your immediate reaction, express appreciation for your manager’s openness and try to find out why they declined your request.
Use a non-defensive, curious tone. Are you already at the top of the pay range for your level? If you want to know how to calculate hourly pay, there are simple tools that will tell you and let you compare your pay to the industry average.
Assuming that’s not the issue, you can get more details by asking open-ended questions. Ask your manager how they evaluate performance and compensation, the factors that contributed to their decision, and how you can earn a pay raise.
In 2024, 45% of employers cite economic uncertainty as the main reason for decreased pay raise rates or outright refusals, followed by 34% citing the company’s underwhelming financial performance. According to 33%, less turnover pressure is the reason.
If your proposal was rejected, you could ask for an alternative, such as flex time or a work-from-home arrangement.
A 2023 Forbes survey found an impressive 98% of employees wanted to work remotely, at least part of the time. This figure reflects workers’ growing affinity or autonomy, flexibility, and the improved work-life balance it helps achieve.
Other alternatives to a pay raise include stock options, a change of position or title, or more vacation time.
If your company’s management structure is flat or horizontal (meaning there is less hierarchy), your direct manager could be just one of many people who contribute to decisions about raises. A brave employee might request a meeting with their manager and ask for a raise.
They will get their manager’s superior to recognize their work and contributions. Being turned down for a raise can be a development opportunity.
Guide for managers
Managers must handle the situation with care and professionalism when rejecting an employee’s pay raise request. Otherwise, they risk loss of morale and motivation within the team.
They should explain the reasons behind the decision transparently and respectfully. This helps the employee understand why their request was denied and reduces feelings of frustration or resentment.
Managers can emphasize the company’s commitment to employee development and growth. They can discuss potential career advancement opportunities, training programs, or other ways the employee can progress in their role.
Feedback on how the employee can improve their performance is essential. It might include suggestions for enhancing skills, taking on additional responsibilities, or achieving specific goals.
The manager should keep the details of the conversation confidential. This helps preserve trust and avoids intervention from other team members.
Employees should be encouraged to communicate their career goals and aspirations openly. They should be assured that they can revisit the topic of compensation in the future, especially if circumstances change or they achieve significant milestones.
FAQ
What is the most common reason to deny a raise?
One of the main and most obvious reasons to refuse a raise is that the company’s budget is limited and it can’t afford to hike up wages.
Should you quit your job if you don’t get a raise?
This is tempting, especially if you’re angry. You could quit if you have another job offer. If not, take time to consider why your request was denied and decide whether staying with that company is worth it.
What if you get a raise that is smaller than you expected?
Arrange a second meeting with the manager. Thank them for the raise so they don’t get annoyed right from the start and then ask if there’s a chance of receiving your expected compensation in the future.
