Average Raise After 1 Year of Work: Answer (2022)

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In the United States the current average raise after 1 year of work is 3.73%. However, the best way to determine what your average raise after 1 year of work should be is to use average raise percent increases reported by the U.S. Bureau of Labor based on sector.

Average raise after 1 year of work by sector (from June 2021 – June 2022):

• 5.3% average raise for civilian workers
• 5.7% average raise for private industry workers
• 3.2% average raise for state and local government workers

As the data shows, private industry workers garnered the largest annual raise. The type of company you work at impacts your pay and average pay raises. For example, remote engineers at Series C and Series D startups earn more than engineers performing the same job duties at Seed Stage, Series A, and publicly traded companies.

Despite national average raise statistics an annual pay raise can be even higher when an intentional process is run to get your boss invested in your success and ask for and negotiate your annual pay raise. Additionally, you don’t have to wait until you’ve worked for one year to be granted a raise or ask for one. There are 21 reasons to ask for a raise. Waiting for an annual raise can result in leaving money on the table.

When a company has a practice of issuing a raise after 6 months of employment it signals one of two things:

1. The company issues starting pay that is below market rate and implements a mental game with employees to make them believe they are being rewarded with an salary increase after 6 months when in fact the starting pay was below market and the raise after 6 months just gets them closer to or gets them to market rate
2. The company authentically values its employees and has processes to review, analyze, and reward performance, to create opportunities for career growth, and to retain top performers

To figure out what type of company you work for when you’re up for a 6 month raise ask your employer:

• What city does the company use to benchmark pay?
• What is the formula used to calculate my pay raise?
• Where does my pay fall on the compa ratio for this position?

The answers you receive to these questions will provide you with the information you need to determine if the company you are working for is strategically playing compensation games or values its employees and wants to keep you growing with the company.

At minimum a typical raise after 6 months should reflect:

• If you are performing additional expected job duties and responsibilities that were not included in the job description but were in fact part of the job
• If you have been assigned additional job duties and responsibilities that were not in your initial job description
• What the market is paying someone with your education, training, skills, experience, and track record of success to perform the job’s duties and responsibilities
• What the company is paying co-workers in the same position with the same level of performance and outcomes, training, skills, and experience
• Your mastery of your job description
• Your contributions to the company

Using the variables above you can determine what your raise after 6 months should be.

The average salary increase over 5 years depends on the following variables:

• If you stay at one company for five years
• How often you find new opportunities at different companies to perform the same job and job duties (i.e. job hop) for more money

A person that changes jobs every one to two years will exponentially increase their earnings over a period of 5 years. This is because when an employee job hops to a similar position at a new company on average their salary will increase 9.7%. When implementing best practices to negotiate a higher salary this salary increase can be over 30%.

Let’s look at how the math works over time.

Average salary increase over 5 years (Staying at the same job variables):

• Average U.S. salary: $56,310.00
• Average raise percent per year: 3.73%
• Average raise in dollars: $2,100.36
• Impact on earnings due to inflation: -1.7%
• Annual salary increase after inflation: 2.03%
• Annual salary increase in dollars after inflation: $1,143.00

Average Salary Increase: Staying at the Same Job for 5 Years

Average salary increase over 5 years (Job hopping two times in 5 years variables):

• Average U.S. salary: $56,310.00
• Average raise percent per year: 3.73%
• Average raise in dollars: $2,100.36
• Impact on earnings due to inflation: -1.7%
• Annual salary increase after inflation: 2.03%
• Annual salary increase in dollars after inflation: $1,143.00
• Average salary increase job hopping: 9.7%
• Average salary increase job hopping after inflation: 8.0%

Average Salary Increase: Job Hopping Two Times within a 5 Year Period

Average salary increase over 5 years (Job hopping every year over a 5 year period variables):

• Average U.S. salary: $56,310.00
• Average raise percent per year: 3.73%
• Average raise in dollars: $2,100.36
• Impact on earnings due to inflation: -1.7%
• Annual salary increase after inflation: 2.03%
• Annual salary increase in dollars after inflation: $1,143.00
• Average salary increase job hopping: 9.7%
• Average salary increase job hopping after inflation: 8.0%

Average Salary Increase: Job Hopping Every Year within a 5 Year Period

Average Salary Increase Over 5 Years Comparison

The data above details the average salary increase for someone in the same position over time. What the data above doesn’t account for is job promotions. In reality for a motivated individual the average salary increase will be more than outlined above when promotions are factored in. However, given that promotions and their value are hyper dependent on career path, motivation, skill development, contributions to a company, etc. they were left out of the average salary increase over 5 years models above.

While job hopping every year may look appealing, changing jobs every year can also hurt your career long-term. A resume where a person has changed jobs every 12-months is alarming and is full of red flags. Hiring managers will see a person that job hops every year as:

• A potentially problematic employee
• An employee that only cares about money
• Someone that will cost the company money in operational loss and turnover in 12-months thus someone not worth hiring (regardless of their abilities)

Having a resume with these red flags can end up hurting your long-term earning potential rather than help.

If we use the same variables above, begin with the average national salary of $56,310.00, and expand our average salary increase over 5 year data to ten years we get the following:

• Average salary increase over 10 years staying at the same job performing the same job: $11,164.00
• Average salary increase over 10 years changing jobs every two years performing the same job: $28,974.00

Average Salary Increase Over 10 Years Comparison

The career earning difference between performing the same job duties at the same company for 10 years versus performing the same job duties at different companies every two years is a difference of $17,810.00.

The pandemic and The Great Resignation brought to light how much companies are losing in employee turnover costs by issuing the standard average raise percent increase of 3.73%. This operational deficit has employers evolving their pay raise practices to be competitive with what talented job hopping employees earn when changing employers.

To maximize career earnings at a company where you’re happy, get negotiation leverage and run an annual process to ask for a raise. If you don’t get the salary increase you’re looking for then you can switch employers and accept opportunities that give you a better salary increase.

Average Raise After 1 Year of Work (FAQs):