Why You Should Ask for a Raise Before Looking for a New Job
Ready to be scared? In your lifetime you will spend 1/3 of your life at work. In other words, you will spend will spend 90,000 hours working. That’s a lot of 40-hour work weeks. It is also the reason that you should maximize your career path and income. While 90,000 hours sounds like a lot of time, if you stay at your current company for five years (10,400 hours) and only see 2-3 percent increases in your salary, you may be leaving a lot of money on the table by not making a job change. If you make a job change, often you will recognize at least a 10 percent increase in your base compensation. If you make $40,000 and the new company offers you $44,000, that is $20,000 more over the next five years.
Since the recession, employees have been scared to leave their jobs for the unknown stability at other companies. Nationally, while unemployment is at the lowest level in 25 years, wage increases have been unnoticeable (2.6%) over the last few years.
“As an employee, you have more leverage in your career today than you have had in the last ten years!”
Even more interesting is the fact that more than 3.4 million people quit their jobs in April 2018 (BLS statistic) which is the most substantial amount since 2001. Quitting jobs is good for the economy since it means there is a confidence level allowing workers to leave a good position to get an even better one without worrying about being the “low man on the totem pole” or last in, first out if the economy suddenly shifts. This is also important because it means a tight labor market and wages have to increase. Employers can no longer ignore wage growth unless they want to lose great employees.
As an employee, you have more leverage in your career today than you have had in the last 10 years! It is how you use this new power that can mean thousands of dollars to you in pay and benefits in the future. Even though people are quitting jobs in record numbers to take perceived better jobs (the greener grass), I would like to suggest before you go out and quit, try this strategy.
If you have a good job but feel underpaid, you have options. You can go work at your competitor tomorrow for at least a ten percent increase in your salary or ask your current employer for a raise first. Ask for this raise before even filling out an application or going on an interview. Why? Because if you like your job, you have the power and this will allow you to understand how your company is addressing this tight labor market and more importantly your value to the company.
Consider these points:
- If you ask for a raise and they don’t give you one (for any reason), it may be time to change jobs to a company that will.
- If you accept a job at another company, when you put in your two-week notice, they will not be able to counter offer you. You should never take a counter offer in the first place, but by asking for a raise before you start looking will always put you in the driver’s seat. Accepting a counteroffer (a post raise) and blindsiding an employer will always have them questioning your loyalty. Ask for a raise first before interviewing.
- Other companies that offer massive increases in salaries may have some skeletons in the closets. Bad bosses, long hours, inadequate technology, reduced benefits and the list goes on. If you like your current job, ask for a raise first.
- If you ask for a raise, you may not only get money, but many people find out what kind of plans your current company has in mind for you.
90,000 hours. One-third of your lifetime. You have some leverage to make sure you can maximize all this time for the first time in years. Your current employer will let you know if you are in their plans.