The Best Way to Get a Raise

I've seen and heard various opinions on the best way to get a raise (and grow your career for that matter.) One side says it's better to stay at one (or maybe a few) organization throughout your whole career while others suggest frequent/regular changes to increase both your responsibilities and pay. Here are my thoughts on the issue:

• Personally, I'd prefer to stay with one company for a long time. As long as the position was challenging, the people were good to work with, and the pay increases kept coming, I'd be content to stay put and watch my career grow.

• That said, it's very rare to find a great company, position, people, etc. and have it stay that way over years and years. People change. Companies change. Situations change. And yes, they may change for the better. But it's also likely that they'll change for the worse at some point. This makes finding a position like the one described above very difficult.

• If you work for the same company year after year, you're more likely to get "regular" or "cost-of-living" pay increases. If you're a "star" you may be able to get a 5% bump or so. Certainly you can get promoted and make more than this, but you can't get promoted every year, so in at least some years you're likely to get a pay bump that's at or near the rate of inflation.

• Almost all of my large salary jumps have been when I've gone from one company to another (the others were when I was promoted within a company.) It's more likely that the new company wants you more and needs you more, and they're often willing to pay for it. When I've moved, I've averaged around 15% pay bumps -- not bad at all. So throw in a few 15% gains here and there and the moves from company to company really add up.

• I was willing to move to and fro earlier in my career, but now issues like quality of work and the quality of life outside work (my wife and family are settled here) mean more to me than simply earning more. Besides, I now make more than enough money to provide for my family, save for future needs, and give to help others. And since I love my job, why would I want to move?

• With all this said, my advice to others is that if you're simply looking to grow your salary as high as possible, then the best path is to work at different companies/organizations for 3-5 years, make a move, work 3-5 years there, make a move, and so on. If you have other objectives in mind (like living in a certain area of the country), then this probably isn't the best option for you. But if you want to make the most money, I think it's better to move frequently from company to company.

What do you think? Is this good advice or off the mark?

Comments

[Kevin]

I tend to be like you and stick with one organization and try to grow with it or in the case of my current position have the company grow because of me. I've gotten decent raises every year - and I'm in line for another good one this year after taking on more responsibility. My review is due this month so we'll see how it goes.

I did get a good raise early in my career by moving from one company to another and then getting an offer from another firm and having my current employer at the time match that offer. I would guess they were at least 15-20% each time.

[Jason]

I agree that "job-hopping" is the best way to quickly increase your salary. I've never been at a company where they gave raises more than 5% annually. Over the past 6 years, I've been with 5 employers, and my salary has more than tripled in that time.
However, a key to this is networking. If you just apply for new jobs every year, you'll be labeled a job-hopper. While I think 3-5 years is a long time to stay at a job these days. (if you're in job-hopping mode) If it's early in your career, I'd say 1 to 3 years is plenty to gain some experience and do some networking. Always keep your eyes open for opportunities. This path is also not for those that are afraid of change.

[Mark]

I think it all depends on how happy the person is vs. how much money they want. Your advice is on the mark for someone looking to gain more money. Talking from personal experience, I've gained the highest bump in salary by moving to a different company.

I'm probably also the poster child of a younger generation not sticking in one spot for too long. At my former company, which I was at for 4 years, I had 3 different positions. They all came with salary increases. I finally left when I felt like the work was affecting my personal life, and still managed to gain a 15% increase when switching jobs.

I think I've made alot of significant jumps over the years, but probably will have hit a plateau in terms of salary jumps. I'll find out within the next 12 months, my company is relocating to a different state and I don't plan to move. Hopefully by then the economy and the job market will have improved to make it easier.

[MInTheGap]

It does seem odd, doesn't it? Both on this topic and the places that give deals for new customers rather than older ones, the incentives are in the wrong place.

Companies that spend all this money training a person give them as little as they can once they're productive. Companies that give great deals to new customers, jack up the prices without end.

The only exceptions is when you're about to leave one-- then all the stops get pulled out. Then you see what you are worth to the company.

Your advice seems to be right on.

[Dorian Wales @ The Personal Financier]

I agree with the point made wholeheartedly. I myself am practicing it though it does get a bit harder as you grow older.

[karla (threadbndr)]

Maybe it's because I'm in a different stage in my career (I certainly had a time in my career where I moved jobs or companies every 3 years or so, and always with a big salary bump), but I don't see a benefit in jumping to another company.

Since my current company has great benefits and I'm within 10-15 years of retirement with a vested pension, I think that I'd have a net loss if I switched companies now. On the other hand, a move to another division within the same company sometime soon is very real possibility.

[Mark Nelson]

More and more people jump from company to company looking for better pay. With less retirement programs being offered it is probably the best way to make the most money.

[JP]

I tend to stay at companies I like for a longer amount of time (3-5 years), which I think is out of the ordinary for someone my age- late 20s. But that doesn't mean that I don't interview often. I go out on interviews with companies that I wouldn't mind working at and see what they're willing to offer, then I go back to my company and say, "Generic Inc. is offering X salary and Y promotion. I really like working here, but that's hard to pass up. Are you willing to match?" I've found most places are, and it keeps my raises/promotions above just a cost of living raise. And if they're not willing to match, I move to the other company.

[John]

My personal philosophy towards this is two fold:

First, if you work to develop the tools to generate more income for the company, then you will rise quicker and make more money than just developing any other skill.

Second, if you build your network so that your skills are always in higher demand than you can supply, you can force the price you demand to use your skills higher and higher to keep the two sides in balance.

This at least gives you goals you can focus on when evaluating what decisions would be best for you to make.

[Darrall]

Agreed. I've been at the same place 15 years now and the raises are consistent but near the inflation rate, and I've been considered a "star" performer most of the time. People and situations have changed, so it's not as fun here anymore, so now I'm casting my resume out. If my friends are any indication, if I do a well structured search and find a good working environment, I'm likely to bump my salary much more than I would staying at the same place any longer. Come to think of it, I should've done this about 8 years ago, when the company culture really started to slide downward.