Great Resignation wage gains and record inflation have skewed what your work is worth.
Workers who quit for a new job tend to score bigger pay bumps than those who stay put, and the gap has ratcheted up even more in the last year. In the second quarter of 2022, job-switchers saw their pay grow by 9.5% year-over-year, while wages for job-holders went up by 7.2%, according to ADP data — marking a series high for both switchers and job-holders' wage growth.
But with inflation hitting 9.1% in June, those raises aren't going far.
If you're in the market to negotiate a new salary or a raise, how much should you target for? Here are a few frames of reference to keep in mind.
Research salary databases online
Despite concerns about a looming recession, people are still pretty confident in the job market. Some 63% of people believe the Great Resignation gives them leverage to negotiate their pay, according to one February Glassdoor Harris Poll survey.
And so far in 2022, job-seekers expect to make 34% more than their current salary in a new gig, or a pay bump of $9,253 on average.
Of course, the increase you can expect will depend on your job, experience, geography and industry, among other factors.
There are lots of salary databases online, and while "there's no one perfect site," in combination they can give you an idea of your market value, says Madelyn Machado, a reverse recruiter in Tampa, Florida.
Some big ones include Glassdoor, Salary.com and Comparably. She also likes Levels.fyi, which "gets granular on offers" made to tech workers.
You can also check open job listings. Employers in some markets, like Colorado, are required to list the salary range on all job postings.
Make sure to use three types of salary data or surveys to give you a good pulse of your role's market value, says Ginny Cheng, a San Francisco-based Career Contessa coach. And because wages have increased so fast during the Great Resignation, try to prioritize salary data from the last quarter for an accurate read.
Ask recruiters in the know
Online salary databases can give you a good regional overview, but the best way to get localized, personalized and up-to-date data is to ask people in the know: recruiters.
In some states, like California and Nevada, hiring managers are required to state their salary ranges to candidates.
Deven Lall-Perry, director of talent acquisition and retention for a New York consultancy, says it's perfectly fine to bring up pay early on in informational calls.
Always ask on the first call if the recruiter doesn't mention it first, she says. "Anytime I recruited anybody, they knew the salary on the first call. I don't want to waste anybody's time."
"It's not weird or gauche," she adds for those worried. "This is an even trade: You're paying for my skills. That's what hiring is supposed to be like, and if you feel like as candidate that's not happening, you can bow out of process respectfully."
Take your number and add $20,000
When recruiters make an offer, they always leave room for negotiation, Machado says: "We're never going to offer you the most we can in the first round."
That means it's up to candidates to negotiate upward based on their salary research. But this could result in historically underpaid workers not negotiating for as much money.
Machado says her clients, primarily professional women and women of color, often significantly undersell themselves. Here's what she tells them: "Whatever offer you think you want, add about $20,000. That's probably closer to what companies are paying now compared to the last time you were in the market."
You might not get the full amount you ask for, which is why Machado recommends aiming high. She recalls one client who asked for $20,000 more, and the company countered with $10,000.
One thing's for sure, she says: Candidates are leaving money on the table if they accept the first offer.
Why you might want to ask for a raise now
There's no one right time to ask for a raise, and you might think that market forecasts predicting a recession could mean now's a bad time to make your request.
With that said, the job market remains tight, so companies are trying to hold on to star employees, Cheng says.
Companies are continuing to respond to the Great Resignation to make annual raises and adjustments, she says: "With the pauses or slowdown in hiring, it's good for companies to consider putting investment back with existing employees and focus on retention knowing growth will resume in the long-term."
Should you use inflation as a benchmark?
Inflation is undeniably high, but Machado says it's not exactly "looked upon positively" to "ask for a raise because life has gotten more expensive."
Instead, leaders want to see the impact you've made in your role to warrant a pay raise — how have you saved the company time or made them money?
Keep track of these big accomplishments throughout the year and bring them up when you're ready to discuss pay.
Once you build your case, it could make sense to bring inflation into the conversation along the lines of: Due to record inflation and tight labor market, I feel it's a good time to revisit what my work is worth in the current market.
Even if you don't get a raise right away, Machado says, all this work can also strengthen your case for getting a bigger pay bump around annual review time.
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