I want to comment on a widespread phenomenon I’ve seen among my friends. Some folks are perfectly content in their jobs, but they feel underpaid. Others stay at their employer because they’re afraid of looking elsewhere. Inertia is a powerful thing. I’m here to tell you that it’s time to apply for a new job, even if you’re happy.
Raises Don’t Come Because Your Boss Thinks You’re Swell
When I worked in corporate America, I was on track for 10% raises every few years thanks to promotion, and then 1%-3% every year after. No matter how well I performed, my pay raises were defined and capped. Even if my boss felt like I was his best performer, there was a limited toolbox he could use to get me paid.
However, when I saw people get higher paying offers elsewhere, that’s when people got paid. Either you take the offer and get a higher salary and job title, or you use that position as leverage with your HR department.
I’ve seen this at the university level as well. Without a competing job offer from another university, you will be getting the minimum pay raise for the duration of your career, with the possible one time boosts of promotion to Associate Professor and Full Professor.
All the Evidence Suggests Job Mobility Equals Higher Pay
The magazine Fast Company recently found that workers who move jobs every couple years make about 50% more than their stable counterparts. Why is this? Why shouldn’t employers treat you the same and give everyone merit based pay increases?
Here’s how an employer thinks. They want to get as much talent as possible for as little money as possible. If you have an employee that stays the first couple years with minor pay raises, they give you a one time pay boost when you get promoted and hope that lulls you to sleep. Hopefully, you’ll stay without requesting more money because you’re too lazy to apply elsewhere and have competing offers.
Traditional employers have a time clock on how long you’ll have to wait for promotions. They don’t happen overnight. However, what if you have a stellar track record and want to be promoted sooner? I’ve seen numerous bond traders at my former employer get promoted to portfolio manager years earlier than they would have otherwise by leaving for another position. Not only did they get more money, they got a higher ranking job way sooner.
All of the Highest Paid Employees at Your Firm Came From Somewhere Else
Here’s the sad truth about employee pay. The top salaries at your office probably go to the people your employer hired from elsewhere. That’s just how it works. If they hired you internally straight out of college, they can give you small raises and promotions. They won’t give you massive pay bumps.
We had portfolio managers at our office that made around $200,000 and then others that made $400,000-$500,000 a year. The ones that made that $500,000 mark were all external hires. The internal people were viewed as too risk averse to leave, which is why the company paid them so much less.
How to Apply for a Higher Paying Job if You Want to Leave
When you look around for a new position, apply to places a step above where you feel qualified. Men are very good at being overconfident like this and women need more encouragement to apply to jobs in this way. By applying to a level above where you feel confident, you are basically setting yourself up for a fast track promotion if you get the job you’re looking at.
Sell your experience and that you’re ready for a new challenge. Make sure you keep the interview process under wraps. Take a sick day or PTO to make sure other people in the office don’t know what you’re up to. Trust me you only want to speak up if you have an offer in hand because it can make you look like a lame duck or a malcontent.
Don’t burn bridges. You might want to return to the company one day in a higher position. Thank everyone profusely for the opportunities you had with the company. They most likely will not immediately promote you, so give everyone your contact info and move on to the new role.
How to Apply for a Higher Paying Job If You’re Happy and Want to Stay
Here’s where you can make a lot of money without really trying too hard. Find a similar job in a geographically similar location and apply. That employer will doubtless offer a higher salary than you currently have. Once you have the offer letter, speak with your boss and your HR department. Show them the offer letter and say that you are considering moving jobs but that you’re happy with the current company where you work.
Even so, ask for the company to match your new salary. Most likely, they will offer an adjustment to your compensation to at least bring you in line with this job offer. I watched professors at the University of Florida use this strategy excellently to increase their pay. They’d let themselves be solicited by University of Wisconsin for a higher paying job, then they’d take that salary offer to the department head. There was an administrator responsible for keeping talented faculty who that professor would then be referred to. That administrator had a budget every year he or she could use to increase or match offers to keep people. The happy professors who looked around for new jobs received some of this money, and the happy professors who didn’t look around received none of it.
If you apply to a new job to see if your employer will match your salary, you should be prepared to leave. If you really aren’t ready to move on, then you’re bluffing and any new jobs you apply to might not be taken seriously by your employer. At some point, the employer might decide to have a policy where they don’t match competing offers. You will either need to decide whether to stay for lower pay or jump ship for better career opportunities.
The Squeaky Wheel Gets the Oil
Ok, I was just trying to come up with an excuse to use that phrase in a story haha. The point is that the most noticeable cases for a pay raise will be the most likely to happen. If you’re bringing higher paying offers into your boss’s office, the company will be forced to realize other organizations highly value your skills. Their choice is to give you what you’re worth or you might leave. Often, you’ll leave for higher pay or position, and then return to the same company in a few years with a much higher comp package than if you had stayed.
My granddad’s engineering professor in college said that if he had not gotten a raise after the first year of working, that he should look for another job. He took another position that came with a promotion. His original employer told him he’d need to wait years for the same job. Once he gained this new role, companies hired him at a level still higher than the company before. If he had become complacent and happy in his old position, he would have stayed a junior employee for half a decade longer than he did.
So it’s time to apply for a new job, even if you’re happy. The worst thing that could happen is you gain new options to which to say no. The best thing is that you’ll get a massive pay increase that you never would have otherwise.
Questions for You
- What are some job hopping stories you’ve seen with friends or colleagues?
- Have you ever successfully used a competing offer for higher salary?