What is a good raise percentage?

Employee job performance

When employers recognize that their employees are excelling in their roles, and being efficient, effective, and productive, they might want to offer a raise as a sign of how much the employer values their efforts. Some employers also choose to conduct performance reviews and then base their raise percentages, if any, on those evaluations.

The location of the company

Salary increases can vary, in terms of averages across the United States. This has to do with the cost of living in the specific state, city, or region that a company is operating in. This means that employees in different parts of the country might have varying perspectives on what they would consider a good raise percentage.

The industry of the company

Employers that are in an industry that is experiencing rapid growth might consider giving higher raise percentages than those that are in a more stagnant or declining industry. To keep up with competitors in an expanding and booming industry employers should try to give larger raise percentages to retain their talent. The 10% to 20% range is ideal.

Job market

Employers that identify certain employee roles as being unique in the context of the overall job market might also consider giving considerable raise percentages to applicable employees. Shortages in talent for niche roles can result in this necessity. Employers need to make sure they don't lose an employee in a role that is going to be difficult to fill.

Company success

When a company is financially successful it is best when all or most who work for that company benefit. Giving raises for company achievements and strong revenue generation is a way to reward employees for their dedication and hard work. In these cases, the raise percentage can be determined by the financial gains of the company.

Responsibilities of employees

Employers can also base their raise percentage on the number of responsibilities an employee currently has or is taking on. Giving raises for increased workloads and responsabilities is a good way for employers to keep up employee morale. The specific raise percentage in this area depends on the role and its responsibilities.