Raises?

[Notarealsignguy]

Does anyone have any insight into what they would consider a fair amount vs an insulting amount for an hourly shop employee raise? I don't feel like the old 25-50/cents an hour bump is enough anymore but I also need room for the future without pricing myself out.

 

[ChaseO]

I agree, I have been going 1-2 dollars an hour/per year. I obviously can't keep this up forever, but for now it is working.

 

[Boudica]

Each year on my anniversary I get a percentage. I think it's 6% ... I don't recall exactly off the top of my head it, but works out to about a buck fifty-ish/per hour

 

[ikarasu]

If you don't match what the current inflation rate is... Your employee is getting a demotion. Inflation is 3.5% in USA I believe?

So at least a 3.5% raise unless its a shitty employee.... That's just to break them even. Then you throw another few percent for their actual raise.


For employees we think needs improvement, we'll give bare minimum inflation rate... For other employees were in the $1-2 range, and if it's been a good year a 1-2k bonus.

It kicks the shitty employees in the ass and tells them to do better, and rewards the good ones. Usually we budget in how much for raises for the year, have a list of employees and their managers come on and divvy the pool up between the employees based on how their performance was. So no one gets the same raise

 

[Notarealsignguy]

It kicks the shitty employees in the ass and tells them to do better, and rewards the good ones.

True but unfortunately I think the shitty employees rarely come to this realization on their own or have the ability to process subtle messages.
So general consensus is $1-2/hr is the current expectation for a good employee? $20/hr would be 5-10% which puts them a smidgen above the rate of inflation, seems fair.

 

[JBurton]

I've been pushing our wages up to liveable over the past 3 years, 10% a year. It's starting to snowball, so next year may be the last at that rate. 6% sounds great for a long term employee that's successful, 10% for a new hire you hired on lower as you didn't know their skillset, and now you want to bring them up a little faster.
When I started, at $6/hr, all of my raises were $.50. For the longest time, our top installers and fabricators were only making 15. At this point, I don't start anyone under 15.

 

[netsol]

you know, it's scary when you realize home depot is starting you at $19.
NYC wants to have $21 minimum wage

often the problem is, the employee with the $3/hr skill set is the one who expects $20

 

[ikarasu]

I always hated when employers didn't give cost of living, even to a shitty employee.... If they're so bad they deserve a downrank in pay, they should be fired. We typically will do cost of living and use that as their "warning", if they don't improve... Then we know not even money as a motivation will make them a better employee and they're gone.


You need to also be careful and look at indeed, LinkedIn, etc and see what others in your area are hiring for.... We just lost 2 graphics artists out of 3 because everyone in our area is hiring at $28-30 an hour... For a sign company graphic artist. So we lost 1 good employee, the second we were happy left... But now we have an add out for $28-30, we're getting shitty resumes... We increased our third artist to above $30 to keep him happy, and were backlogged.

So sometimes a buck or two isn't good enough, if the sign shop down the street is paying $5 an hour more, there is no loyalty and they'll hop on over.


Rates are going crazy right now in our area, I don't know how it is in USA... But over here it's a job hunters market not an employer's market. Just for shots and giggles I looked up production manager salaries on indeed.... There's about 6 people hiring for 100k a year for a signage production manager.... Which is kind blowing. It's a huge, huge pay bump.... But I'm happy where I am, and if wages stay the same it gives me ammo for next year's raise.


So just throwing that in there as well, you need to look at salaries to comparative companies and jobs in your area.

The last company I was at did an annual review of the going rate for wages, it was nice and prevented people from leaving for a few bucks elsewhere. They understood that hiring and training a new employee was more costly than giving an employee a few bucks raise.... So staying competitive with local shops was in their bet interest as well.

 

[Notarealsignguy]

you know, it's scary when you realize home depot is starting you at $19.
NYC wants to have $21 minimum wage

often the problem is, the employee with the $3/hr skill set is the one who expects $20

Retail and fast food could pay $30/hr and still have a hard time finding employees. Schedule is never the same week to week, sporadic hours, few full time positions and O/T is pretty much out of the question. Plus the job sucks.
$15/hr is pretty much the current markets minimum wage.
The skill set thing, yes. Same can be said for when you hire a contractor. I don't care what the price is, I only care that the quality of work matches the price paid. That's tricky

 

[Notarealsignguy]

I always hated when employers didn't give cost of living, even to a shitty employee.... If they're so bad they deserve a downrank in pay, they should be fired. We typically will do cost of living and use that as their "warning", if they don't improve... Then we know not even money as a motivation will make them a better employee and they're gone.


You need to also be careful and look at indeed, LinkedIn, etc and see what others in your area are hiring for.... We just lost 2 graphics artists out of 3 because everyone in our area is hiring at $28-30 an hour... For a sign company graphic artist. So we lost 1 good employee, the second we were happy left... But now we have an add out for $28-30, we're getting shitty resumes... We increased our third artist to above $30 to keep him happy, and were backlogged.

So sometimes a buck or two isn't good enough, if the sign shop down the street is paying $5 an hour more, there is no loyalty and they'll hop on over.


Rates are going crazy right now in our area, I don't know how it is in USA... But over here it's a job hunters market not an employer's market. Just for shots and giggles I looked up production manager salaries on indeed.... There's about 6 people hiring for 100k a year for a signage production manager.... Which is kind blowing. It's a huge, huge pay bump.... But I'm happy where I am, and if wages stay the same it gives me ammo for next year's raise.


So just throwing that in there as well, you need to look at salaries to comparative companies and jobs in your area.

The last company I was at did an annual review of the going rate for wages, it was nice and prevented people from leaving for a few bucks elsewhere. They understood that hiring and training a new employee was more costly than giving an employee a few bucks raise.... So staying competitive with local shops was in their bet interest as well.

It's similar here but it seems like this year will be soft compared to last.
I always talk to our employees, make sure they're doing ok outside of work, see if they need anything and make sure the group is all getting along. The good ones will quietly leave if things are out of wack so you have to know without counting on them to come to you. Many would rather leave then to go to the boss with an issue that could potentially turn into an awkward situation for them. I always moved on in transactional jobs because it wasn't my place to tell someone else how to run their business or point out problems that they should be aware of. I can only assume that others do the same?

 

[Vassago]

Easiest way to think of it is..

How much would it cost YOU if you lost them? Think of lost contracts, training, customer relations, etc.

What experience would walk out that door?

The staff are your company - they equally represent you.

If you can't pay a decent salary then that's poor business management - you should include ALL overheads when calculating prices - why work for peanuts?

If you can't afford to pay your staff a decent wage, then perhaps you should revaluate the business.

If you can afford to pay, but don't - well.. Your business reflects you.

Businesses are all about investment - you do it to make money.. Do you want to thrive or just survive?

 

[rcali]

USA inflation rate was 8% for 2023, a $2 an hour raise for an employee in the $20- $26 per an hour range is just barely a cost of living adjustment and not a raise.

 

[Notarealsignguy]

USA inflation rate was 8% for 2023, a $2 an hour raise for an employee in the $20- $26 per an hour range is just barely a cost of living adjustment and not a raise.

Not it wasn't, it was 3.4% for 2023.

U.S. Inflation Rate by Year: 1929 to 2024

By looking at the inflation rate each year, you can gain insight into how prices changed and how events around the globe impacted the average U.S. consumer.

www.investopedia.com

 

[rcali]

Not it wasn't, it was 3.4% for 2023.

U.S. Inflation Rate by Year: 1929 to 2024

By looking at the inflation rate each year, you can gain insight into how prices changed and how events around the globe impacted the average U.S. consumer.

www.investopedia.com

My bad, 8.3% for 2022.

 

[Texas_Signmaker]

I didn't like 2022 with all the material costs going up. last year I was able to keep prices stable. Much easier doing business that way.

 

[White Haus]

Some good info here. How are you guys evaluating your employees to make sure the pay increase isn't just to cover inflation and is more based on performance? That's something I need to work on soon.

 

[Notarealsignguy]

Everything went up so fast over the last couple of years that I feel as if the performance based metrics we're almost thrown out the window and raises became a matter of upping everyone to keep pace with the market so they wouldn't quit. It makes it a bit more tricky now that things have sort of leveled out.

 

[Boudica]

Some good info here. How are you guys evaluating your employees to make sure the pay increase isn't just to cover inflation and is more based on performance? That's something I need to work on soon.

I get a monthly performance bonus - a percentage based on what we billed out the prior month. It's an incentive for me to get as much out the door as possible. The more I can crank out - the higher my bonus is.

 

[Signarama Jockey]

In January of 2004, the average cost of a pound of ground beef was $2.59 (according to the U.S. Bureau of Labor Statistics). Today, that same pound of ground beef will cost you $5.09 per pound. This is how money printing steals from everyone - over the last 20 years (at least if you measure it pounds of ground beef), your wealth has decreased by half. That means any money you might have had in the bank will buy about half the ground beef that it did in 2004.

Of course, it varies by commodity. If you measure in pounds of chicken, it comes out to be almost the same (187%). Bread is 213%.

This works out to track with projected inflation of 3.5%, which means if you aren't making at least 3.5% of what you did last year, you are losing money. If you want to keep an employee living in the same standard of living that they enjoyed last year, they should be making 103.5% of what they did right now.

But, these are your people. These are people who help you succeed. They're all trying to make their own lives better, and they will be tempted to go elsewhere if working with you is a dead end.

 

[Notarealsignguy]

Signarama Jockey,
Guy running the business also needs to be careful to not get themselves overextended. The past few years we're an anomaly and from my seat things look to be slowing down. If your labor gets to be too much for a lowered volume then you have to cut hours and heads which isn't good for the employees you care about either. It's a bit heartbreaking to have to lay off good people when things are slow knowing full well that the job market is tight and they have a family to feed. You have to take this into consideration as an employee since everything is about the long game if you value stability.