Want a Raise? The Time Is Now!
By: SoFi General · January 12, 2023 · Reading Time: 3 minutes
Current Job Market
The US job market is currently robust, with the unemployment rate sitting at a record low of 3.5% and unprecedented job growth over the past two years. But fears of a recession, which could come in 2023 or 2024, still loom over the US.
With all this in mind, the next few months may be the ideal time to negotiate a raise with your employer – or if they won’t bite, to find one who will.
Job Switching as a Strategy
New data shows that the best way to get a raise is to get back into the job market and negotiate a higher starting salary.
According to data from the Atlanta Federal Reserve, job hoppers experienced 7.7% wage growth year-over-year as of last November, compared to just 5.5% for employees who stayed put. Assuming a salary of $60,000, this means you could make an extra $1,320 by switching employers as opposed to asking your current employer.
Additionally, with annual inflation rates currently over 7%, it’s important to remember that a yearly raise of any amount less than 7% would actually amount to a pay decrease.
Another reason to consider getting back on the job hunt is that new pay transparency laws require employers in certain areas to disclose their pay range for advertised positions. If potential employers operate in these markets – which currently include California, Colorado, Washington, and New York City – it will be easier for you to know exactly how much more money you stand to make by making a change.
But remember, switching employers is always a calculated risk. While it’s easier now to be sure about salary, it’s harder to predict how you’ll respond to new responsibilities or work environments. A different strategy would be to conduct interviews, get an offer, then use it as a benchmark for negotiations with your existing employer.
At the end of the day, like so many financial decisions, it all comes down to your skillset, risk tolerance, and (above all) personal preference.
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