Everyone Is Being Paid More, How About You?

If Inexperienced Fresh Grads are Starting at $100k+, Where Does That Put You?

As reported last week, incoming analysts at JP Morgan will make a base of $110k and almost $150k all-in.?This is the second recently announced increase.?Think about it: a 22-year-old with no real-world experience is starting their career comfortably topping 6 figures. However, you have 10, 15, or 20 years of experience, you’ve built your skillset, and you’ve worked your tail off to get where you are.?Are you being paid fairly??Are you being respected?

In this newsletter, we discuss the concept of compensation as a form of respect, evidence of severe wage inflation, how to increase your compensation to your market value, and provide a client case study.

Money is the Language Your Employer Uses to Respect You

I have always believed that your professional alliances are with individuals you work with, not the corporation your work for.?A corporation’s main goal is to generate returns for shareholders which means increasing revenue and minimizing expenses.?If you minimize compensation, you maximize the bottom line.

Adam Smith, the Father of Modern Economics said:

• Man is an animal that makes bargains, no other animal does this
• Labor was the first price, the original price – money that was paid for all things
• A merchant . . . is not necessarily the citizen of any particular country

The way a company compensates you in your base, bonus, upside, etc. is their way of showing you your value to them.?It’s a sign of respect.?

If you are being paid below your market value, you are not being respected.

We all want to be rewarded for our efforts in our family, friendships, and professional life.?Is respect too much to ask for??Would you put up with your 5-year-old child throwing food at you??If your kid’s teacher singles them out for punishment, or their baseball coach gives them no playing time, would you just sit there?

How about the restaurant that charged you for two entrees when you ordered one, or the hotel that charged you for drinks from the minibar when you never even went near it?

Were You Respected in 2021?

In my 55 years on this planet, I have never seen such a hot job market.?Look at the world:

• The best M&A year ever
• Companies with weak business models raised hundreds of millions
• FinTech’s great talent grab

You have heard what I have heard: “up 20-35% depending upon your sector.” If you were well respected and are happy with your compensation, stop reading.

The Evidence is Clear

“Goldman Sachs, which missed analysts’ expectations for its fourth-quarter earnings, reported spending a whopping 33% more on pay last year” (1).?“JP Morgan is increasing base pay for 1st-year investment banking analysts by 10%, to $110,000 up from $100,000” (2).?I have observed that my clients who transition to FinTech saw bases climb from $200k at the beginning of 2021 to $275k by the end.?

That's almost a 40% inrease in base salary!

How many of your colleagues left their job last year for greener pastures??Do you think they left for less money??Most likely you are just as smart, hardworking, and good at your job – so why should they get all the upside?

The Only Way to Get Paid Fairly and Regain Your Respect is to Leave Your Job

There is an adage in financial services that until you mark yourself to market, you will never be paid fair value.?In other words, the only way to get paid fairly is to leave your job or at least present your boss with a competing offer from another employer.?While you certainly don’t want to leave every year, after 3-5 years, by definition you are underpaid. After 10 years you are probably 50% below your market value.

In 2000, I doubled my compensation by switching from Merrill Lynch to Credit Suisse.?Yes, doubled.?That move also reduced my commute, gave me more senior management exposure, and presented collaboration opportunities with many more colleagues across the firm.

So, what do you do if you have decided to leave?

As a career coach, the single biggest mistake I see professionals making is taking a passive approach to job search.?You update your resume and LinkedIn profile, cruise the job boards, call some friends.?Recruiters can be helpful, but it’s important to remember whom they work for – and who pays them.?Recruiters work for companies, not individual job seekers.?If a recruiter helps you get hired, they get paid 20-25% of your base.?Are you really maximizing your financial rewards with this approach? If you found the company directly, ask for this extra 20-25% in your base.

Create a Strategic Job Search Plan

The most leverage you can put into your job search is putting together a strategic plan, even if you do it without a coach.?What does that look like?

• Stop the search - Stop the endless job search applying with your resume online, a process that gets you nowhere and keeps you frustrated and directionless
• It’s not your resume - A powerful resume is just 20% of this process.?Sure, it has to be eye-grabbing, but it’s an appetizer to the meal called an interview, not the meal itself
• Access hidden jobs - 70% of all jobs posted online are old or promised to an internal candidate.?Get your own informational interviews with your target companies and bypass the competition
• Ace Interviews - Create a connection with your interviewers through storytelling and demonstrate exactly how you can add value to the company
• Create a strategic customized plan - Feeling secure about your job search to achieve the maximum compensation is all about having a concrete and actionable plan

Since networking is the heart of a powerful job search, let me provide some helpful tips.

First, you must understand that communicating a clear sense of your target industry sector and your target exact job title will empower your network to help you.?If you have not spent time to truly understand your value add, i.e., how you can contribute to the workplace by doing what you do better than anyone else, your job search will be painful.

Second, bypass HR and network directly with business professionals in your target companies.?If you don’t have a list of target companies you want to work for yet, put together a list of 20 - 40.?Control the process or it will control you.

Follow the image below to ease the penetration of your target companies.

Get informational interviews with your 1st connections since many might know someone in your targets. If you don’t have a large network, create one.?Leverage people with whom you share a commonality, namely the same university, same former employer, and common 2nd connections. It does not matter that your timing didn’t overlap at the shared school or company; if you approach these professionals the right way, many will help you.

I have built a LinkedIn network of 18,500 professionals with mostly alumni from Penn/Wharton, Columbia University/Columbia Business School, Merrill Lynch, and Credit Suisse.?There is no company I can’t penetrate for my clients.

Client Case Study

Sandy worked for a financial services firm that supports the large Wall Street commercial banks.?However, as we all know, “support” firms don’t pay very well.?She was a rockstar but was frustrated with the whole job search process.?We worked together on the basics of optimizing her resume and LinkedIn profile.?Then, when she followed the networking techniques I taught her, her world opened.

She accessed many of her target employers by contacting alumni from her university.?The majority of the alumni were people she never met since they graduated years before her, but many were glad to help. She leveraged the techniques I taught her to send LinkedIn invitations, ask for informational interview calls, conduct the calls, and follow up after the calls through email and social media.?After some leg work, she got her resume to a hiring manager. ?

Going from service provider to Citibank netted her a 40% raise in base alone!

Don’t Get Left Behind

Getting paid market value for the work you do is not just about the amount of money you have in the bank; it is a direct reflection of how your employer values your contribution.?If you are unsure of whether your pay is keeping pace with wage inflation, I strongly encourage you to do the research to find out.?In this job market, you can and should keep your compensation at top dollar, even if that means looking for a new job that will pay you what your current employer won’t.?Just keep a mental image of those fresh-faced 22-year-olds with $150k in their pockets soon outbidding you on a house.

If you have increased your salary by more than 30% in the past 2 years, tell us about it in the comment section below.

Source References

(1)??Fortune, January 19, 2022 “The biggest banks on Wall Street are worried that your big pay raise could be bad for the economy”.

(2)??Banking and Finance, January 19, 2022“JPMorgan raises salaries for junior bankers for second time”.