If you’ve ever negotiated your salary, you know how nerve-racking it is. Fortunately, there is a way to address the jitters: information. When you narrow the ballpark of what your new employer is willing to compensate you for, you can learn how to increase your salary. Of course, the next question is – how do I determine that narrow range?
In this article, I explain how to increase your salary, why changing jobs is a good way to earn more money, teach you how to access accurate salary data, and introduce my client who successfully increased his pay by 35% by educating himself before negotiating.
The Time to Move is Now
Making a job switch is usually the biggest raise you can get. That was true before the pandemic, and it’s even more true today. Mark Wilson, a Risk & Compliance recruiter, commented that of all the underpaid candidates he’s spoken to recently, “They all had one thing in common – loyalty.” The typical worker gets about a 3% annual salary increase. Those accepting new positions, however, often raise their pay by 10-20%. You do the math. Of course, you can’t switch jobs every 6 months. But making the move every few years as opposed to sticking with the same company for big chunks of your career can have a big influence on your lifelong pay.
As a career coach focused on financial services, I typically see the most job movement in the first half of the year. People get their bonuses and move on vacation times and hiring budgets are reset, and it’s a fresh start after the holidays. This is the best way to increase your salary.
Salary Calculators Are Not Your Friends
One of the top questions my clients ask is “How do I know what my next job will pay?” Another way to phrase this question is “After I demonstrate my value add to an employer, what can I anticipate for my total compensation package, including base, bonus, and all benefits?” That’s a very reasonable question, and job seekers need answers before starting a job search. If you’re anything like my clients, the compensation question is a big driver of anxiety. In what follows, I will explain how to increase your salary.
Glassdoor, LinkedIn, and other job boards do provide data, but it is typically not helpful to mid and senior-level professionals. These sites often show very wide salary ranges that can spell huge lifestyle differences in their spreads. For example, I did a quick LinkedIn search for an NYC based “Director” and got the following results:
- Investment Banker: $250-$400K
- Solutions Architect: $165-$250K
- Social Media Marketing: $150-$275K
Furthermore, because more companies are going in-house with recruiting, there are fewer 3rd party recruiters with accurate information. 29 states and one US territory restrict future employers from asking a candidate’s salary history. The flip side of that is that you can’t just find out how much a job pays with a simple phone call.
How can you make plans about where to live, where to send your kids to school, what car to drive, etc. with meaningless salary range data? It seems like an impossible nut to crack.
Uncovering pay data is the best way to position yourself for receiving compensation at the high end of what is possible in the particular role, industry, and location. They say “If you ask, you shall receive” – but you have to know what to ask for.
Leverage Networking Calls to Discover your Market Value
Accurate salary discovery is actually really easy. If you’ve been following my material for a while, I may sound like a broken record, but I’m repeating the message because it’s true and it works: Networking. By having a handful of networking calls, you can easily determine your estimated market value. You can conduct a handful of these networking calls when you want to learn information, including your next compensation package.
Some of the most valuable connections you can make on LinkedIn are people with whom you share a commonality: university, former employer, and other LinkedIn connections. Once you have connected with some of these professionals, you can contact them to ask for a coffee (or Zoom) chat.
The key to getting your head around these networking calls is that you make them with individuals you have never met but who have the information you need. When you leverage LinkedIn to speak with professionals who have the target position in your target industry, you can ask the tough questions. Even better, if you ask professionals at Morgan Stanley for the base and bonus range for your level, you will know the maximum Morgan Stanley will pay. That’s powerful!
Because these calls are a “one and done,” they carry very low risk. You benefit from being vulnerable in a way you would never be during an actual interview or informational interview. Yes, in these circumstances you can even ask about compensation without being rude.
3 Tips to Get the Most from a Successful Networking Call
- Remember to ask about the whole compensation structure. This includes base pay, cash bonuses, stock options, restricted units, 401(k) contributions, etc
- You can also ask about work/life balance, company culture, and anything that may not be in a press release
- Have more than one conversation. After at least 3 calls, you will know your true market value and can negotiate your best deal with your new employer
Client Case Study: Dan Learned Quickly What He Would Make When He Changed Jobs
My client was burned out after working 80+ hour weeks for years in investment banking and knew he wanted to work for a Fortune 500 company in an investor relations role. He was able to leverage the contacts he had created over a 20-year career to determine his desired direction, but he had no feel for his expected salary range, even though he was sure he would enter at the Director level. He was nervous and having a family to support compounded his anxiety.
I showed Dan how to identify professionals including Vice Presidents, Directors, and Managers at Fortune 500 companies who were in investor relations roles or a related job function. He searched for professionals who were alumni from his university or former employer using advanced LinkedIn techniques.
5 professionals agreed to Dan’s request, and he lined up his calls. He discovered that he could expect $240-$260K in base salary. For his 3 top companies, he could expect a maximum bonus of 15-20%. After 2 years of working for one of his top companies, they would offer him stock options. That’s a whole lot more specific than the $64K-$177K listed for the equivalent search on LinkedIn Salary.
He felt so much more secure knowing what to expect. As a result, Dan was able to negotiate a compensation package 35% above his previous job. This allowed him to put a larger down payment on his new home.
Gear Up and Make Your Career Move
If you have been at your job for a while and would like to get paid more, it may be time for you to move on to the next opportunity. The first quarter is a great time to make a job switch. Once you know where you want to go, make sure you do your homework. Speak with professionals who can give you salary information. When you go into a salary negotiation armed with information, you can leverage top compensation.