With Job Creation Strong, Should You Start Looking?

The Labor Department reported that the economy added 157,000 jobs in July, a bit lower than the expected 190,000. But with the upward revision of 59,000 to the two previous months, this year’s average monthly job creation is 215,000 -- that’s ahead of last year’s 184,000 per month and better than the 2016 - 2017 pace of about 185,000.

The unemployment rate edged lower to 3.9 percent from 4 percent a month earlier, hourly wages were up 2.7 percent in July from a year earlier and weekly wages rose 3 percent. Though annual wage increases have remained stubbornly stuck in a range, a CareerBuilder report found that 58 percent of employers plan to give out raises by the end of 2018. And about a quarter of those companies are planning increases of 5 percent or more.

Still, there’s evidence that job-switchers can pocket 10 to 30 percent larger annual pay increases than those who stay put. So should you jump ship and look for a new gig? Before you start spending time and energy on LinkedIn, Indeed, Glassdoor and the myriad of other web sites that you will need, it’s helpful to think through some questions. Here are ten to get you started:

1. What do I like/dislike about my current job/occupation?
2. Do I like my industry, but not my company?
3. What skills do I have?
4. What are my strengths and weaknesses?
5. How can I use my skills in another field/career?
6. Do I need more education or training before making the leap?
7. Will I need to work longer hours/days?
8. Will I lose precious vacation time?
9. Am I willing to physically move or endure a longer commute?
10. Will my career change require me to accept a lower salary or a loss of benefits?

These questions require you to be honest with yourself. With regard to number 10, if your shift requires you to take a step back financially, then be sure to have adequate savings to cover your expenses. In addition to your regular fixed costs, be sure to include any one-off bills that your new career might require.

After thinking this through, you might come to the conclusion that you are better off staying where you are and asking your boss for a raise. Even though the labor market is tightening up, you still want to demonstrate your value, how you make a difference to the company and what your position is worth in the market. Once you have the evidence and desired number in hand, think about your negotiation in a slightly different way.

Researchers at Columbia Business School found that using a range, rather than a single number may help you increase your compensation. Here’s how it works: If you wanted a $100,000 salary, you’d suggest a $100,000 to $120,000 range to your boss. Ranges frequently lead to higher salaries for a simple reason: most employers are unlikely to go below or even to the bottom end of your range. The key is to anchor the range with an ambitious, but reasonable number at the bottom, equivalent to the one you would have used as a single dollar offer. And don’t try to shoot the moon--most successful range offers were five to 20 percent of one another.

Have a money question? Email me here.