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Salary increase 2023 – What is the usual percentage?

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Salary increases are an important part of the employment process, as they make employees feel appreciated for their hard work and commitment. In Germany, salary increases are usually negotiated between employer and employee, either through individual or collective negotiations.

Why should I ask for a raise?

Salary increases recognize employees and can motivate them to build on or improve their performance. Over time, employees' knowledge and skills expand, making them more important to the company and should be compensated accordingly. While these increases may seem small, they can have a significant impact on workers' financial well-being. raises not only help workers keep up with the cost of living, but they can also serve as a motivator and help attract and retain top talent for the long term. If you see a starting point in your development or factors such as length of employment, qualifications and responsibilities play a role, you should ask for a salary that matches your current level.

How do I address a salary increase?

To be able to give an answer to this question, you must first be aware of your salary situation, as there are different ways to increase your salary:

  • Collective agreement (salary is increased for all employees on a percentage basis, or arrangements are made in collective bargaining between the union and the company) 
  • Annual salary review (your employment contract states that you will conduct an annual salary negotiation with your employer)
  • Individual collective negotiation (you conduct the negotiation directly with your supervisor or a responsible person)

In our article, we give you tips for your one-on-one negotiations with your employer.

Addressing a raise often comes down to good timing. To make your negotiations easier, seize a moment that works for you. Positive project completions, responsibility changes, or when you've expanded your skills and are using them to move the company forward are best.

However, we don't recommend waiting too long for the perfect moment, as it is your right to be compensated according to your work. Talk to your supervisor and ask for a one-on-one meeting.

Tips for salary negotiation:

  • Collect arguments for your salary increase (responsibility, new skills/areas of responsibility, successful projects, etc.) 
  • Enter the negotiation with confidence
  • Make yourself aware of your value and inform yourself about an appropriate salary
  • Job changes and promotions are also a good time for a higher salary.

There are several ways in which your employer can respond to your demands. It is important to enter the discussion with concrete demands. It is possible that the employer will meet some of the demands or offer alternatives. Often, salary increases are also tied to conditions, such as an expanded scope of responsibility. It is also possible that benefits, such as a company car or more vacation days, are offered as an alternative to a salary increase. If the salary offer is too low and negotiations are threatening to fail, we advise you not to reject it right away, but to listen to the employer's arguments. It may not have been the right moment for such a negotiation and there may be an opportunity for another salary negotiation at a later point. 

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Good to Know

We always recommend that you request a salary adjustment contract, as verbal promises are not as provable as a firm contract between you and your employer.

Appropriate salary increase 2023

One of the most important factors that will influence salary increases in Germany in 2023 is the country's economic development. The pandemic has hit the German economy hard, and many companies are struggling to stay afloat. However, as the country begins to recover and companies see an increase in profits, it is likely that wages and salaries will also start to rise again.

Inflation also plays a big role in this year's negotiations, as a rapid increase will also raise the cost of living for every citizen. This allows you to address inflation compensation in negotiations. According to recent wage negotiations, German workers can expect an average wage increase of about 2.5% in 2023. This is slightly more than the average wage increase of 2.3% in 2022.

Tip: What is the usual salary in my profession? Check the salary customary in the industry in the remuneration atlas of the employment agency to request a specific salary increase. 

Another factor that could impact salary increases in Germany in 2023 is the availability of skilled workers. As unemployment rates remain relatively low, employers may need to offer higher wages to attract and retain top talent. This could lead to a competitive labor market and potentially higher wages for workers.

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