Workers that move to another job are receiving a larger pay increase than those who stay in their current job. At least for now. Why? Because the labor market is tilted to the demand side to fill open positions, while the supply side of workers are still in the Great Resignation Revolution. 4 million workers resigned in the past month or so, joining the millions who have already resigned in the past year.
However, if you have a job, you’re probably getting a bigger raise next year. Why? Because employers have seen their workers leave and want to keep the talent that remains. Projections are that pay increases will average close to 4% in 2022, the highest since 2008. That means if you are a high performer, your salary increase should be well above 4%. If it isn’t, you’ll have some serious thinking to do..
Companies are in a difficult situation:
- Talented employees have their pick of many new jobs at a higher salary
- Companies are forced to pay current employees a higher salary to keep their talent
- Employees want to work from a remote location, while most employers want more employees to either come back to an office environment or work a hybrid schedule
- Employers continue to pay for empty office space, while having to decide on space requirements when the lease is up in a year or two. A big expense.
- Recruiters are having a terrific year sourcing talent, especially when they can dangle significantly higher pay (and a hiring bonus) to talented individuals
- Almost 50% of employers said they must offer higher pay to attract the talent that they need, given the labor shortage
- Inflation is beginning to accelerate which affects employees that are staying in their current position. If inflation is up 6% or so, and salary increases are averaging 4%, then everyone is moving backward
So, what’s the answer? A few thoughts:
- Check the marketplace for similar jobs in your industry. If a move will get you a 15% to 20% increase in total compensation, consider it.
- Check out the marketplace if you were to secure a promotion. A 20% to 30% increase would not be unreasonable. Consider it.
- At the same time, talk to your manager and human resources about the results of your research in the marketplace. Spell out the differences between your current pay and the disparities in the marketplace. See what they say and what plans they have to make it attractive for you to stay.
- Look at all your options, and with your family make a career decision.
You’re the only person responsible for defining your career goal and strategy to get there. Now is a perfect time to assess where you are, where you want to be, and the leverage you have in the marketplace. Most bosses will understand your position, research and request to be heard. Good luck.
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