By Jennifer Liu -
CNBC
Salary increases amid mass resignations and record inflation have distorted the value of their work.
Employees who quit tend to get bigger pay raises in their new job than those who stay with a company, and those pay gaps have widened even more in the past year.
In the second quarter of 2022,
the salary of those who changed jobs grew by 9.5% compared to the previous year
, while that of those who remained increased by 7.2%, according to data from the provider ADP.
However, with inflation running at 9.1% in June, those increases didn't amount to much.
If you're thinking of negotiating a new salary or raise and don't know how much to ask for, here are some frameworks to keep in mind.
Do research on the internet about salaries
Despite concerns about a possible recession, people remain quite confident in the job market.
Some 63% of people believe mass resignations give them an advantage in negotiating their salary, according to a February Glassdoor Harris Poll.
And so far in 2022, job seekers expect to earn 34% more than their current salary in a new job, or an average pay raise of $9,253.
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Of course, the raise you can expect will depend on your job, experience, location, and industry, among other factors.
There are many online salary databases, and while "there's no one perfect site," all of them can give you an idea of how much your job is worth in the marketplace, says Madelyn Machado, a recruiter in Tampa, Florida.
Some of the biggest ones are Glassdoor, Salary.com, and Comparably.
It also recommends Levels.fyi, which "details the offers" made to tech workers.
In addition, you can check available job listings.
In some markets, such as Colorado,
employers are required to list the salary range on all job postings.
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Be sure to use three types of salary data or surveys to get a good pulse on market value, says Ginny Cheng, an adviser at the San Francisco-based Career Contessa.
And since salaries have risen so quickly during resignations, try prioritizing salary data from the last quarter to get an accurate reading.
Ask knowledgeable recruiters
Online salary databases can give you a good overview, but the best way to get hard, personalized, up-to-date data is to ask the people who know: recruiters.
In some states, such as California and Nevada, hiring managers are required to disclose their salary ranges to candidates.
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Deven Lall-Perry, director of talent acquisition and retention for a New York-based consulting firm, says it's perfectly fine to bring up salary on your first job calls.
Always ask about salary in the first conversation if the recruiter doesn't mention it, he cautions.
"Whenever I've hired someone, I've reported the salary on the first call. I don't want to waste anyone's time."
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“It is not something strange or clumsy,” he adds for those who are worried.
“This is a fair exchange: you are paying for my skills.
This is how hiring is supposed to be, and if you feel as a candidate that's not happening, you can respectfully withdraw from the process."
Think of a number and add $20,000 to it
When recruiters make an offer, they always leave room for negotiation, Machado says:
"We're never going to offer the most we can in the first round."
That means it's up to the candidate to negotiate up based on their salary research.
But this could result in historically underpaid workers not trading for as much money.
Machado says her clients, primarily professional women and women of color, often significantly underestimate themselves.
Here's what it tells them: "To the salary you want, add about $20,000. That's probably closer to what companies are paying now compared to the last time you were in the market."
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You may not get the full amount you ask for, so Machado recommends aiming high.
He recalls a customer who asked for $20,000 more and the company responded with $10,000.
One thing is for sure, he says:
Candidates leave money on the table if they accept the first offer.
Why should I ask for a raise now?
There is no right time to ask for a raise, and you might think that market forecasts predicting a recession might mean now is a bad time to make your request.
That said, the job market is still tight, so companies are trying to retain their star employees, says Cheng.
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Companies continue to stem the wave of job resignations with annual raises and adjustments, he says: "With hiring pauses or slowdowns, it's good for corporations to consider re-investing in current employees and focus on retention knowing that the growth will resume in the long term.
Should we use inflation as a reference?
It is undeniable that inflation is high, but Machado affirms that it is not exactly "seen with good eyes" to "ask for a raise because life has become more expensive".
Instead, leaders want to see the impact you've had on your role to justify a raise: how has it saved the company time or made you money?
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Keep track of these great achievements throughout the year and bring them up when you're ready to discuss the topic.
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Once you've assembled your reasons, it may make sense to introduce the topic of inflation by saying something like, "Due to record inflation and a tight labor market, I think now is a good time to review what my job is worth in the market." current market".
Even if you don't get a raise right away, Machado says, all this work can strengthen your case for a larger raise at the time of your annual performance review.
