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You Don't Need a New Job to Get a Big Raise

Alex Chan,RHU,CHS,CFP,CPCA,EPC,CFSB,CLU profile photo

Alex Chan,RHU,CHS,CFP,CPCA,EPC,CFSB,CLU

Certified Financial Planner & Chartered Life Underwriter
Belvedere Financial Solutions Limited
Cell : 604.649.3829
Langley Office : 604.513.1177
Vancouver Office : 604.689.8289

Workers, finally, are in the catbird seat. Getting a new job in this tight labor market can mean a big pay bump and bonus. But what if you like the job you have? Workers who are staying put may be wondering how much their loyalty is costing them.


Don’t wait to ask for that raise.Photographer- Kimimasa Mayama:AFP .jpeg

Don’t wait to ask for that raise.Photographer- Kimimasa Mayama:AFP .jpeg


Annual wage growth was 7.1% as of March for those who switched jobs, compared with 5.3% for workers who remained at the same employer, according to data compiled by the Federal Reserve Bank of Atlanta. Job switchers often realize bigger gains, but since last year, the gap between the two has widened considerably.

But don't assume you'll miss out if you don't move. It's more possible than ever for even settled employees to improve their circumstances. The data shows wages for job stayers are starting to accelerate as employers feel the pressure to hang on to talented people. Maybe you won't get as big of an increase as you would at a new job, but now is a good time to negotiate the heftiest raise you’ve seen in a while.

Here's why: Not only are companies having trouble filling vacancies, the pandemic accelerated acceptance of remote work, so employees have more job options now beyond where they’re physically located. Your boss knows it’s only becoming harder and more expensive to replace you as the competition for workers heats up.

It’s no surprise then that companies have the highest budgets dedicated to pay increases since the 2008 financial crisis, according to Mercer's U.S. Compensation Planning Survey. The survey shows that employers are even handing out midyear raises to retain certain workers.

So what can you do to ensure you get a piece of that? Many people find conversations about compensation to be difficult and awkward. Here are a few tips to get you started.

First, know how you stack up. Just answering the question about whether you’re over or underpaid can be difficult. There is more transparency around pay than there used to be, but it's still tough, especially for more experienced employees or those with more unique positions. Sites like Payscale and Glassdoor can be a helpful starting point, but have their limitations.

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Some states, including California, Colorado and Maryland, now require most companies to include salary information with job postings, or if requested by candidates, so existing employees can look to that for guidance. New York City was going to require many of its businesses to start  including salary ranges with job postings on May 15, but it has postponed enforcement of salary disclosure until November.

If you feel uncomfortable asking coworkers what they make, try reaching out to a recently departed colleague. Some industries may have specific resources — such as industry newsletters, publications or networks — that can be helpful.

If nothing else, inflation is running more than 8% this year, and that can be a starting point for your ask. (But don't lead with inflation as the reason, since employers may just respond by saying they’re feeling it, too.)

Another option is to contact an employment recruiter specializing in your field. Even if you have no intention of changing jobs, you shouldn't close any door, and a recruiter can give you a sense of what someone with your credentials would make in the current job market.

Seeking a job offer from another employer to use as a bargaining tool is a trickier proposition. Workers are clearly feeling emboldened, with 54% of employed job seekers saying in March they thought their employer would counter when they announced their resignation — up from 43% in January, according to a survey by ZipRecruiter.

But before you ask your boss to beat another offer, think about your company's culture and how that will be perceived, says Linda Babcock, an economics professor and author of “The No Club: Putting a Stop to Women's Dead-End Work.” Some might view it as a perfectly acceptable negotiating tactic, while others could write you off as already having one foot out the door.

For longtime employees, it can be hard to secure a big salary increase without an offer from a competitor, according to Alexandra Carter, director of the Mediation Clinic at Columbia Law School and author of “Ask for More." There are ways to be diplomatic about it, though, such as emphasizing that the new company approached you first.

Veterans should also consider how they can improve their situation beyond just higher wages: Another day or two of working remotely? More paid time off? Graduate school tuition reimbursement?

Or maybe you negotiate new responsibilities that put you in a better position for promotions and higher pay in the future.

During the conversation with your manager, avoid asking questions that can be answered with a simple "No." Instead, ask questions that require an explanation of the decision process and requirements for getting a certain kind of increase.

Perhaps the best advice of all: Don't talk too much. You may wind up bargaining against yourself without your manager having to say a word.

Don't assume that the standard procedures around compensation and bonuses still apply. More job switchers are getting sign-on bonuses. (Job sites Indeed and ZipRecruiter both said the number of postings mentioning sign-on bonuses have risen recently.) So job stayers should ask about meaningful retention bonuses or anniversary awards, even if those have never been available before.

Finally, don't wait until it’s time for your formal review to talk to your boss — the decision about your compensation has probably already been locked in by then. Every recruiter and compensation expert I spoke with highlighted the importance of being proactive: The more lead time you give your employer, the more time they will have to maneuver.

So you would be wise to act sooner rather than later. It’s anyone’s guess, but eventually the labor market will cool and employees — especially those staying put — won't have the upper hand they have now.

© 2022 Bloomberg L.P.

Alex Chan,RHU,CHS,CFP,CPCA,EPC,CFSB,CLU profile photo

Alex Chan,RHU,CHS,CFP,CPCA,EPC,CFSB,CLU

Certified Financial Planner & Chartered Life Underwriter
Belvedere Financial Solutions Limited
Cell : 604.649.3829
Langley Office : 604.513.1177
Vancouver Office : 604.689.8289