Stagnant income? How to know when to take risks and get a higher salary

Allison Venditti knows how difficult the question “should I stay or should I go” can be.

The Toronto-based career coach and founder of Moms at Work, an online networking community of working women, has seen many clients wracked by indecision about whether to leave their current, stable job for a new, higher-paying opportunity.

For most, fear of the unknown is a limiting factor, but Venditti says those who take the leap in search of a higher paycheck generally have no regrets.

“When people go out, most of the time the number one response I hear is, ‘I wish I had done this sooner,'” Venditti said, adding that a significant pay increase can be life-changing.

“Earning $30,000 more a year is a lot of money in five years. That can mean a down payment on a house, or fancy camps for your kids. It makes a difference”.

It can be difficult to know when it’s time to leave a job you enjoy or a company you feel loyal to for a higher salary elsewhere. Job satisfaction, your relationship with your boss, and work culture all have value and, in some cases, outweigh a potential salary increase.

But experts say that, given the current cost of living, it may be time to consider looking elsewhere if you think your earning potential has plateaued.

A recent survey of 4,000 Canadian management professionals and 2,000 employers by global recruitment consultancy Robert Walters found that in 2024, the average employer plans to offer salary increases of between 3.5 and 4 per cent.

Given persistently high inflation in recent years, that means the raises many Canadian workers can expect to receive this year will do little more than keep them from going backwards financially.

“If we look historically, pay increases have been used as a metric to reward hard work, loyalty and progression,” said Robert Walters Canada CEO Martin Fox.

“But what we’re seeing now is a really unique and difficult situation. “A lot of companies right now are offering this inflationary increase just to keep people healthy, and they probably don’t have the budget or haven’t planned to pay more than that.”

On the other hand, companies often dig deep into their budgets to attract an attractive new hire, Fox said.

“Our research and internal data show that professionals who change organizations often experience a substantial salary increase,” he said.

“It’s in the range of 10 to 15 percent, even up to 20 percent for some really high-demand roles.”

“We know that job seekers earn more money. It’s proven,” Venditti said, adding that workers can benefit financially by changing jobs, but also by changing industries entirely.

“That idea that changing jobs too much is somehow bad doesn’t exist anymore. “What we see in people with high earning potential is that the time they spend in a job is approximately two and a half years.”

While a 15 percent salary increase is about what an employer should expect to offer if trying to attract an experienced professional to leave their current position, Venditti said it’s important to remember that salary is only part of the equation.

“If you’re going to get paid $50,000 to work 42 hours a week, or you’re going to get paid $50,000 to work 35 hours a week, that’s a significant difference,” he said, adding that employees should also do the math and compare things like stock options, pensions and RRSP top-ups.

Fox said the lowest-paying job can also come out on top when considering factors such as training and professional development, benefits and wellness programs, and the ability to work remotely or hybridly.

The Robert Walters survey found that 93 percent of employees surveyed are willing to leave their current organization for a salary increase of 10 percent or more.

It also found that the leading factor behind employees staying in their current position is competitive compensation: Only nine percent of employees surveyed cited appreciation for their company as a key reason for staying.

But Venditti said women, in particular, often refrain from applying for higher-paying positions because of the false belief that higher-paying jobs automatically mean a loss of flexibility and work-life balance.

“That’s the number one problem I see,” he said.

“Don’t make that assumption: ‘Oh, I can’t leave because they’re so nice to me.’ Many places are nice to work.”

If you really enjoy your job but feel like you’re underpaid, you might consider asking for a raise or promotion before looking for outside opportunities, Vendetti said.

Even if your employer can’t offer money, they may be willing to come to the table with an offer of more vacation time, flexible hours, a condensed work week, or some other form of non-monetary compensation.

Still, Venditti said employees determined to improve their financial situation need to “read the environment” and decide if that’s possible at their current company.

“If your employer has put out a memo saying everyone has already had a cost-of-living increase and now they’re laying people off, don’t come in and ask for a raise; the answer will be no,” he said. saying.

“Sometimes there just isn’t a chance. “Sometimes you really have to leave your company if you want to get promoted.”

This report by The Canadian Press was first published March 7, 2024.

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