The labor market as we knew it is now flipped on its head. More than 4.5 million people quit their jobs in November. With millions of open jobs, workers feel empowered to ditch gigs where they feel undervalued for new ones.
Employers are struggling to retain talent—and now are offering more money for workers as a strong incentive.
A survey by the Conference Board finds companies are setting aside an average of 3.9% for wage increases this year—the most money put aside for raises since 2008, but falling short of the galling 7% inflation we’re currently experiencing.
A December survey from the New York Times and Momentive found that only 17% of workers had received raises that kept up with inflation in the past year.
“Some employers are looking at having to make some 20% increases to keep their people,” says Cindy Hayward, director of The Coaching Clearinghouse and Career Transition Services at EFL Associates.
Could a tight labor market be the key to finally getting that raise you’ve been looking for?
How to Get a Raise During the Great Resignation
If you’re waiting for an opportunity to get a raise, experts say now is the time. Here are their tips for snagging a boost in pay during the Great Resignation.
1. Arm Yourself With Knowledge
Looking up salary information for workers with similar skills and experience will give you a better idea of the salary range you should be seeking.
You can do market research on platforms like Salary.com and Payscale. And while these platforms are helpful, there’s one additional tool you can use: Talking to people in your industry.
Discussing pay can feel taboo or rude, but times are changing. Research finds that millennials are more open to discussing their salaries—and when they do, they use the knowledge as leverage during negotiations or share salary information to help overcome racial and gender pay disparity.
It’s also imperative that you know what skills you bring to the table, your past achievements and what makes you a unique worker. You don’t have to get a fancy new certification—using skills you already have can go a long way.
“People feel like they have to start over, but if they know the value of what [skills] they already have, that helps a lot,” says Alicia Perkins, a professional development coach.
Assess what transferable skills you have (these are qualities that can be used across various jobs and industries). Think about things you’re capable of doing, like writing or building strong relationships. After identifying which skills you have, figure out where they’re needed within your current company or a new job.
You should also do homework on your total compensation at your current job—meaning, how much are your benefits worth? Some benefits can be tied to actual dollar amounts, such as health insurance coverage; others, like working remotely or flexible hours, are intangible but create an overall better working experience.
“Sometimes that workplace flexibility may be more important to someone than another $100 in salary,” says Hayward.
2. Ask Your Current Job First
If you like your job and have good relationships with your colleagues, consider negotiating a raise in your current position before joining the Great Resignation.
“Employers right now recognize that we’re in a challenging labor market, so rather than having their employees leave, I think employers are ready to have these conversations,” says Hayward. “In fact, they prefer to have them.”
It can be nerve-wracking to ask your current employer for more money. But both Hayward and Perkins agree that now is the time for workers to be paid what they deserve. “They’ve probably been underpaid for quite some time,” Hayward says.
Securing a raise right now will take more than just asking for more money. Mike Monahan, Grant Thornton LLP’s national managing principal of People and Community, says workers should approach their employers with knowledge of the value they add to the company, as well as understanding what the current market is offering, as a way to justify asking for a raise.
You could also bring an employment offer from an outside company (referred to as a counteroffer) to your current employer to see if they can match or exceed it. This strategy comes with risks, says Melanie Denny, a personal branding consultant and former executive career coach.
“You have to understand the risk of them saying they can’t match that…and then you ending up without a job,” Denny warns.
At some point, though, you’ll have to determine if a job elsewhere can get you the salary increase you desire. According to the Federal Reserve Bank of Atlanta, since 2011, wage increases for job switchers have outpaced those who stayed at their jobs but got pay increases.
Hiring new talent is more expensive for employers, and they’re usually willing to offer big dollars for top recruits. Once you’re in a position, it can be harder for an employer to significantly boost your pay due to budget restrictions.
Experts warn against going for a new role just for the money, though; you’ll want to make sure the new role is a good fit for you.
“Many of these people are achieving those increases along with an expanded role in terms of scope and responsibility from their most recent role,” says Danny Speros, VP of People Operations at Zenefits. “So, yes, it’s a big raise, but also a big opportunity and challenge.”
3. Throw Old Career Rules Out the Window
Not only do workers have more power now thanks to the Great Resignation, but the phenomenon has thrown old career rules out the window.
Take job-hopping for example. Hannah Williams, a 25-year-old data analyst in Washington, D.C., had one goal: Make six figures before turning 30.
Williams says before the pandemic, she didn’t get much support from her parents or peers in her strategy of leaving jobs after a year to climb up the salary ladder—some people went as far as saying she was ruining her career by doing so. But once the Great Resignation hit, “it was totally flipped.”
Job-hopping helped Williams reach her goal years early; in Nov. 2021, she secured her current role, making $115,000 per year.
“When the Great Resignation became a thing, I was so hyped because I felt like everyone around me had finally woken up from this broken capitalist dream we were all dozing through,” Williams says. “Workers finally had power over their employers and could demand what they were due.”
Though short tenures of a year or less were a red flag for recruiters and employers, Hayward says they’re much more lenient now due to Covid-related disruptions. Leaving a job sooner than you would have pre-pandemic shouldn’t deter you from considering the possibility.
“We’re in a tight spot from a labor pool standpoint, which means employers are being far more forgiving,” Hayward says.
How Long Will the Great Resignation Last?
These are high times for workers. But how long can such a hot labor market for workers last—and how long will it be until employers return to their old ways?
Some career experts think these new conditions are here to stay, especially now that workers have realized their true worth.
“This is the career revolution that we’ve been hoping to see,” Perkins says. “This isn’t going away—people realize that they’ve been spending a lot of time at jobs that don’t serve them. We’ve now seen that we don’t need our jobs to be happy.”
But from a business standpoint, some say shelling out big bucks to keep workers around won’t be a long-term strategy.
“I’ve been in this field for more than 30 years now, and everything is cyclical from my perspective,” says Monahan. He adds that at some point, employers will have to be more efficient with their spending on employment, which means the well of massive raises will eventually dry up.
Monahan notes that more workers are now asking for wage increases to account for inflation, and adds that increased costs of employment are part of its overall challenge. At some point, companies will have to rein in these costs to prevent them from being passed on to consumers.
When that happens depends on Covid—something Monahan says “certainly was never anticipated by most of us to last this long.”
More From Advisor
- Biden Administration Withdraws OSHA Vaccine Mandate After Supreme Court Ruling
- Best Identity Theft Protection Services Of 2022
- How To Get Your At-Home Covid Tests Reimbursed
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.