Unhappy with your current job? Think you’re worth more than you’re being paid? There’s a good chance that you’re right. If you’re looking to make a job change soon, now may be as good a time as ever to make the switch. With the most recent jobs report, which included data through the end of October, the nation’s unemployment rate is down to 4.1%, the best it’s been in 17 years. Odds are that the economy won’t get a whole lot better before it begins to get worse. Think unemployment is heading to 3%? If so, I have a bridge in Brooklyn I’d love to sell you. Take a look at the chart below from the Bureau of Labor Statistics to see how cyclical the unemployment rate in America has been over the last 40 years (vertical axis = unemployment rate).
Locking in a new position at a higher salary may be a good strategic, long-term move for your career. As the unemployment rate has fallen and America’s talent shortage has increased, employers are being forced to pay more for new-hires to attract the talent that they need. It’s economics 101 at its finest. The demand for skilled workers in America has increased as companies have grown over the past several years, but the supply of these workers has remained low, thus forcing the company’s hand to pay more in order to bring in outside job candidates.
And that talent gap seems to only be worsening. According to the Society for Human Resource Management (SHRM), employers are facing the largest talent shortage since 2007. Nearly half of all U.S. employers (46%) reported having difficulty in filling positions due to a lack of available talent. This statistic is bad news for employers but great news for job candidates. Much like the real estate market shifting between a buyer’s market and a seller’s market, the jobs market will also shift between being a hiring company’s market and a job candidate’s market. And currently it is a candidate’s job market through and through.
Forbes has recently confirmed such candidate sentiment. According to Forbes, staying at a job for longer than 2 years can be detrimental to your career earnings over time. This is due to the average raise per year that an employee can expect at their company being 3% a year. When you factor in inflation of 2% per year, on average, most employees are looking at a real, annual raise of about 1%. Not much to really improve one’s standard of living. Curious how long it’ll take you to double your earnings power at this rate? Well, stay in the workforce for 70 years with the raises mentioned above and you’ll finally double your real earnings. Truly a grim thought.
Or you could do what millions of Americans have found to be a sure-fire way to increase their wages, by switching jobs. According to the same Forbes article, people who switched jobs earned a raise of between 10% and 20%. This amount of an increase, as opposed to the average in-house raise of 3%, will surely improve the standard of living for most Americans. Although not everyone should seek employment elsewhere, it doesn’t hurt to see what’s out there every now and then.
If you do end up searching for a new job here are five tips to remember:
Don’t make compensation the only factor in determining a new job – Sure, money is important, but be sure to think about career advancement, work-life balance, and the day-to-day responsibilities of your new position. Is this position one in which you can see yourself enjoying for years to come? If not then it may be better not to pursue it
Factor in all benefits when comparing compensation – Although compensation shouldn’t be the only factor for a prospective candidate, it is definitely a major one. When comparing a different position’s compensation to your current one be sure to factor in the monetary amount of all benefits, such as PTO, health insurance, and retirement matching programs. For example, if your current job’s salary is $50,000 and you have an offer at a competitor for $60,000 it seems as though you’re receiving a 20% raise. But if you get 4 weeks PTO along with a 6% 401(k) match at your current job whereas the new job only provides 2 weeks of PTO and doesn’t offer any 401(k) match then you really aren’t gaining that much. That 20% raise falls to about 4% when just these benefits are factored in.
Know your worth – Do your research and know what other job candidates with similar education and experience are earning at other companies. Not many companies will make an offer above the range of pay in which you request during the process. It’s up to you set an appropriate range for your pay. These days there are many ways of researching this area. The easiest way is to use a website such as Glassdoor, Indeed, or Paysa to determine what others are making in similar positions. You can also reach out to a recruiting agency to speak with them about your options and hear what others are making. A third option is to simply ask friends who hold similar positions if they could offer any guidance on salary expectations.
Don’t get discouraged – Just because the unemployment rate is low and there is a talent gap in America doesn’t mean that companies will be sending out offer letters to you left and right. You’ll likely still have to apply to many jobs, go through multiple interviews, and prove that you are worthy of landing that new gig. Be sure to do your homework prior to any interview and always put your best self forward. Part of that homework should be in researching the company that you’re interviewing at and having several pre-determined questions ready to ask the interviewer. This will ensure that you appear enthusiastic for that new position and will help you stand out.
Modify your resume for the job – We’ve all heard of computer engineering, mechanical engineering, and electrical engineering, but how about resume engineering? A little resume engineering can go a long way in securing that first interview. Many job openings at large companies today will have the same, or at least similar, job title, but require very different skillsets. Adjust keywords in your resume to match those of the job description and this will help get you noticed by the Human Resources manager.
At the end of the day job hunting is still a terrible endeavor. It is a time-consuming process where you’ll speak with multiple prospective employers, have several first interviews, and probably feel stood up by human resource workers on a number of occasions (what’s up with that?). If you can withstand the process, however, the career benefits could be lucrative and very fulfilling.