It pays to look around.
The number of job switchers reporting wage gains has expanded while the number of job stayers reporting wage gains actually contracted as inflation exacts its toll, according to Thursday findings from the Pew Research Center.
Some 60% of workers saw real wage increases from April 2021 to March 2022 after switching jobs, according to Thursday findings from the Pew Research Center. That’s up from 51% of new workers who saw gains from April 2020 to March 2021.
At the same time, only 47% of people staying at their job experienced real wage gains in the same April 2021-March 2022 period, down from 54% the previous 12 months.
“Most workers who switched employers continued to experience an increase in real earnings, and amid a surge in demand for new hires, their advantage over other workers in this respect appears to be widening,” researchers Rakesh Kochhar, Kim Parker and Ruth Igielnik wrote.
“Roughly 60% of workers at new jobs new jobs saw real wage increases from April 2021 to March 2022 compared to just 47% of people who remained at their current place of employment.”
But when it comes to the so-called Great Reshuffle, it’s not just about the likelihood of wage gains at a new job, it’s also the sheer size of the pay increase.
Approximately half of job switchers were making roughly 10% more than they were a year ago after wages were adjusted for inflation — that matters given that inflation rose 9.1% on the year in June.
Black and Hispanic workers, along with younger and less educated workers were more likely to switch jobs, the researchers noted.
Workers paid a price for staying put. The median worker saw a nearly 2% loss in pay when adjusting for the inflation, researchers said in analysis that included a survey of almost 3,800 employed Americans.
“The median worker who stayed put saw a nearly 2% loss in pay when adjusting for the inflation, while job switchers experienced a 10% wage gain, according to the Pew Research Center data.”
Contrary to the long-lasting gripes about work ethic that are buzzing around again, it may just be that many people see the fatter paychecks elsewhere. Low pay was the top reason why people left their jobs in 2021, a February Pew survey noted.
Other data shows the money gains for people who bounce to a new job at a time when employers are eager to find and keep staff.
As of June, job switchers enjoyed 6.4% average wage growth during the past 12 months, according to Federal Reserve Bank of Atlanta data. That’s compared to the 4.7% average wage growth for people who stayed. But those figures were not adjusted for inflation.
But this week’s findings come as storm clouds keep gathering over worries of a possible recession. The U.S. economy shrank by an annualized 0.9% in the second quarter, according to newly-released data on the country’s gross domestic product.
That’s the second consecutive quarterly decline, heating up the debate about whether the country is in a recession or, at least, heading for one.
Looking ahead, one-fifth of the Pew poll participants (22%) said they are at least somewhat likely to be looking for a new job in the next six months. But people sound roughly split on how easy it would be a get a new job now, with 39% saying it will be easy and 37% saying it will be hard.
The job hunt
“The Great Resignation of 2021 has continued into 2022, with quit rates reaching levels last seen in the 1970s,” the Pew researchers added.
So who’s polishing up their resume and looking around amid layoffs and hiring slow downs, particularly in the tech sector? A recession could affect white collar workers more, with blue-collar service and manufacturing jobs in increasing demand, according to one economist.
Serious and casual job searchers hoping for better paychecks elsewhere should remember a couple things about their job hunt, experts say. For one thing, don’t underestimate the power of a good-looking resume and enthusiastic, well-written cover letter, says Martha Coven, author of Writing on the Job.
In the next steps, the job interview in all likelihood will boil down to some common themes that applicants need to explicitly and implicitly address, according to the job search site Glassdoor.com.
For starters, follow-up emails help, especially if it’s a close-run race between the final candidates. It shows you’re engaged and really want the job.
What’s more, the job interviewer will want to get a sense about whether they will enjoy working with an applicant, if the applicant is truly excited about the job opening, and if they have the skills and experience to do the job.
Negotiating salary comes with an array of considerations, according to Indeed.com. That includes research on going rates and geography to account for cost of living.
But experts at the site advise applicants to aim for the top of the range and be confident in the ask. Feel free to rehearse it ahead of time with a friend, they note. It shows you put a high value on your own services, and takes into account the tight labor market. (Unemployment is currently hovering at 3.6%.)
“A worker may prefer their current job because they like their boss and co-workers, have good and/or better promotional prospects and also believe they have better job security. ”
Of course, there’s plenty of reasons why a person would want to stay where they are — like having a good boss, room for growth, good co-workers and, in some cases, job security.
But you can still undertake that pay raise negotiation, said Andres Lares, managing partner at the Shapiro Negotiations Institute, a consulting firm that trains on sales and negotiation skill.
Come prepared with the thought-over, practiced pitch, Lares said. That means highlighting the accomplishments already carried out, but it’s also about communicating the ways you can continue to bring added value to the company.
While Lares noted that salary is always up for negotiation, he said people should be open to other options to improve the total package.
Maybe the money ask might be harder than hoped, but other parts of a job can be negotiated too, including title, benefits, time off and various fringe benefits like expensed commuting and mobile-phone costs.
Kochhar, Parker and Igielnik suggested people are keen to improve their circumstances, as the cost of living continues to rise. “Perhaps not coincidentally, Americans cited low pay as one of the top reasons why they quit their job last year in a Pew Research Center survey conducted in February 2022,” they added.