Salary Reviews in Today’s Job Market – Who Sets the Rules?

As the new year approaches, salary discussions often take center stage in organizations. While salary negotiations are a standard part of annual reviews anticipated by employers and employees, experts note a growing trend: not all employees dare to ask for a raise during these meetings, even if they feel they deserve it. How can employees approach their managers about a salary increase without discomfort, how should they prepare, and when is the best time to bring up the topic?

From an employer’s perspective, organizations typically review employee salaries once the previous year’s financial results are precise, observes Denis Tarasenkov, Client Partner at the Lithuanian division of the global solutions company ManpowerGroup.

“Annual reviews are an excellent opportunity to assess an employee’s growth, review last year’s performance, and discuss salary increases if both parties are satisfied with the results. In practice, most annual discussions with employees occur in January or February. However, there’s no universal rule—these conversations can also be pushed to spring, depending on when companies finalize their fiscal year. For this reason, some employees might see a pay raise in January, while others may need to wait until March or April if the company calculates results only after the new year,” explains Tarasenkov. 

He adds that during annual reviews, Lithuanian companies typically offer employees a 5–10% salary increase depending on their performance. 

What Do Statistics Say About Salary Growth? 

Statistical data indicate that salary growth will remain positive in the coming years, albeit slower. The Bank of Lithuania predicts an 8.5% wage increase next year, slightly below this year’s rate. According to Swedbank economists, while inflation is expected to rise, wages are set to grow by 8.2%, approximately three times faster than the rate of price increases. Meanwhile, insights from Figure Baltic Advisory suggest an average base salary increase of 6.4% in 2025, based on company forecasts and plans. 

When Else Should Salary Discussions Happen?

Annual reviews shouldn’t be the only time to discuss salaries, according to Tarasenkov. However, such discussions should not come out of the blue—there must be a reason, often a triggering event. 

“Employees typically feel compelled to initiate such discussions in certain scenarios. One common reason is receiving a better financial offer from another organization while preferring to stay with their current employer. Another is when their salary hasn’t changed for several years. External factors, such as increases in the minimum monthly wage (MMW) or narrowing gaps between different positions—for instance, when a senior specialist earns only €50 less than their manager—can also prompt discussions. Changes in personal circumstances, like expecting a child, planning to purchase property, or taking on additional responsibilities in their current role, are also common triggers,” says Tarasenkov. 

Another opportunity to request a salary increase is after a probation period, though this practice varies by organization: 

“We notice that corporations less frequently review salaries after probation. Interestingly, many new employees expect a salary increase after their probation period, agreeing to a slightly lower salary upon hiring. They often surprise their employers by requesting a raise, as this expectation was not expressed during initial discussions,” Tarasenkov explains. 

How to Approach the Topic with Confidence 

For many employees, asking for a salary increase—during annual reviews or at another time—still feels daunting. Many would be noticed and rewarded without asking, relying instead on employer initiative. 

“Knocking a manager’s door to request recognition and appropriate compensation is intimidating. Employees often only raise the issue in exceptional circumstances, after much deliberation and hesitation,” says the expert. 

To build confidence, Tarasenkov advises employees to prepare thoroughly: 

“Start by conducting market research—review job postings to determine what salary would be appropriate for your role given the current market conditions. Check the current MMW, average wages, and the country’s economic situation (e.g., inflation rates). After understanding external factors, assess your performance. Evaluate your responsibilities, their evolution, achievements, and contribution to overall business success. When requesting a raise, you need to offer something in return. Be prepared to discuss how to take on more responsibilities, express your desire to grow, and provide examples. With solid arguments and data, initiating a salary discussion becomes much easier.” 

The HR expert also emphasizes understanding the employer’s perspective: 

“Employers must balance employee welfare and motivation with business goals—achieving optimal results with minimal costs. Therefore, managers may not initiate salary increases unless employees request them. It’s important to note that it’s sometimes inappropriate to ask for a raise—for example, if you’ve recently received one, lack solid arguments to support your request, or are asking for an unrealistically high increase.”