MONEY Earnings

The 3 Best Ways to Boost Your Earnings This Year

hand holding dumbbell with coin at the end
Sarina Finkelstein (photo illustration)—Getty Images(2)

To pump up your salary, switch up your career routine.

Welcome to Day 8 of MONEY’s 10-day Financial Fitness program. By now you’ve seen what shape you’re in, bulked up your savings, and cut the fat from your budget. Today, add some muscle to your paycheck.

When you hit a fitness plateau, taking a new class or picking up a sport can be the key to breaking through to the next level. The same concept applies to your career. Landing a new job will likely result in a salary 18% to 20% higher than what you’d get via an internal promotion, according to a study by Wharton professor Matthew Bidwell.

Thanks to a rapidly rebounding job market, this is the best year since the recession to get a new gig. More than one-third of employers expect to add full-time employees in 2015, according to CareerBuilder’s annual job forecast, up from one in four last year. Here’s how to stand out.

1. Get the Inside Scoop

Employee referrals generate a full 40% of new hires, according to the JobVite 2014 Recruiting Survey. So rather than scouring the job boards, talk to people you know and ask about openings at their firms. Love a certain company but don’t know anyone there? Reach out to your personal network or tap your LinkedIn contacts to see if anyone can connect you to an employee.

2. Make Yourself Poachable

Employers are increasingly courting passive job seekers, says John Hollon, editor of TLNT.com, which covers HR trends: “These are employed workers who may be willing to switch jobs but aren’t actively searching.” Recruiters like these candidates because they’re successful and valued at their current jobs. Interested? Get on hiring managers’ radar by peppering your LinkedIn profile with keywords related to the type of job you want. You can also sign up with the website Poachable, and get the Poacht app. List your dream job and resume for recruiters to browse.

3. Be Bold

That said, maybe you love your job or just can’t move right now. That doesn’t mean settling for a middling raise. While the biggest bumps do go to top performers, simply asking goes a long way. A new study from Payscale found that 75% of employees who requested an increase got one, with 44% landing the exact figure they asked for. The odds of receiving your requested amount are even better if you’re already a high earner: Those with a salary of $150,000 or more had a success rate of 70%. Before you ask, get a sense of the budget. You have more influence when you show you see the boss’s side, says career coach Lee Miller.

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  • Day 9: Learn How Better Health Can Help Your Finances
  • Day 10: Shore Up Your Safety Net
MONEY job search

How to Catch the Eye of a Recruiter in Just 7 Minutes

LinkedIn on a mobile phone
Felix Choo—Alamy

An optimized LinkedIn profile can help you stand out from the crowd.

As part of our 10-day series on Total Financial Fitness, we’ve developed six quick workouts, inspired by the popular exercise plan that takes just seven minutes a day. Each will help kick your finances into shape in no time at all. Today: The 7-Minute LinkedIn Makeover

Nine out of ten recruiters use social media to find or check out candidates, especially LinkedIn. Your profile is 14 times as likely to be viewed if it has a picture. So find a professional-looking photo and upload it to your computer before you start the clock.

0:00 Log in to your LinkedIn account and select “Edit Profile.” Click on “Add Photo” to upload the pic you’ve selected. You’ll see a yellow square that you can drag to change the position and size of the picture. Make sure you’re centered and hit save.

1:05 By default, LinkedIn uses your job title as your profile headline. Instead, write your own bold wording. Stumped? When you highlight the field to change it, LinkedIn lets you peek at what others in your industry are using.

2:34 Check out your profile summary. Are you hitting all the keywords you’ll need to show up in recruiter searches? Take a minute to scan some job descriptions in your profession to make sure you’re using the right language.

5:00 Nothing says LinkedIn novice like an alphabetsoup URL.

Create a custom version by clicking the LinkedIn URL listed right beneath your photo on the Edit Profile page. You’ll be transported to the Public Profile page, where you can create your own. Stick with something simple, like your name.

5:35 Bulk up your recommendations politely. Write a sincere post for one of your contacts, and then email asking if she’d mind doing the same.

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  • Day 9: Learn How Better Health Can Help Your Finances
  • Day 10: Shore Up Your Safety Net

 

MONEY Career Strategies

Why Your Potential Could Be More Important Than Your Accomplishments

trophy with crack in it
Jeffrey Coolidge—Getty Images

The surprising downside to achievement

Conventional wisdom is pretty clear on how to get ahead in one’s professional life. Rack up accomplishments, collect accolades, make your résumé as impressive as possible, we’re told, and rewards will follow. That all sounds nice—but it might not be true. In fact, social science suggests, the key to success might actually be to achieve less while promising more.

That’s the conclusion of a study by professors at Harvard and Stanford, who found that people tend to favor potential over demonstrated results. The researchers discovered that references to potential, such as “this person could win an award for their work,” appear to stimulate greater interest than similar references to actual accomplishments (“this person has won an award for their work”). This tendency, the paper states, “creates a phenomenon whereby the potential to be good at something can be preferred over actually being good at that very same thing.”

The professors demonstrated as much in a series of experiments in which test subjects were asked to choose between the proven and the possible. In one case, participants were asked to rate two job candidates: one with two years of experience and demonstrated leadership achievement, and the other with no experience but high leadership potential.

Despite the more experienced candidate having objectively superior credentials, subjects preferred the candidate with potential. They also implicitly predicted this candidate would be a better leader in his fifth year on the job than the more experienced candidate would be in his seventh year.

In another experiment, participants read two letters of recommendation for an applicant to a business Ph.D. program. Both versions were nearly identical, but one stressed possible talent (“Mark K. is a student of great potential”), while the other highlighted accomplishment (“Mark K. is a student of great achievement”). Once again, the subjects preferred the applicant with potential.

Why are people so drawn to the possible, even over proven results? The researchers suggest it’s simply a matter of uncertainty being more interesting than a sure thing. “Our finding is that people find potential to be exciting uncertainty,” says Zakary Tormala, one of the study’s authors and a professor at the Stanford School of Business. That makes a candidate with potential more stimulating than a safer choice, and often leads to a more positive impression.

Workers can use this quirk of psychology to their advantage by emphasizing their future value, in addition to past achievements, when applying for a job or asking for a raise. “One of the places we’ve encouraged people to make this happen is in their reference letters,” says Michael Norton, another of the study’s co-authors and professor at Harvard Business School. References “generally talk about what someone has done,” Norton says. “That’s not a bad thing to do, but it’s very important to also talk about their potential.” It can be particularly important for high achieving employees who might be more inclined to stress their accomplishments over their continued capacity for growth.

However, the professor notes, the allure of potential isn’t unlimited. In the recommendation letter experiment, researchers found that participants stopped favoring potential over success when claims of potential lacked sufficient evidence to back them up. Instead, it’s best to highlight a combination of past accomplishments and future possibilities, so no one suspects you’re hype without substance. “A mix is critical,” Norton explains. “There has to be some demonstrated sense that you’ve achieved things.”

Use it right, and our collective preference for potential can do more than get you a better job. Norton says it could also get you a date. “The classic terrible first date is the man drones on about achievements,” the professor jokes. “But if you talk about what you want to do, even if you’re not going to get there, it can be more exciting.”

MONEY Baby Boomers

How to Work Less—Without Giving Up Your Career

Briefcase with fishing lures
Zachary Zavislak

It's called "phased retirement," and it's catching on.

The youngest baby boomers have just turned 50, bringing retirement within sight for the entire generation. But many boomers don’t expect to work at full throttle until the last day at the office. More than 40% want to shift gradually from full- to part-time work or take on less stressful jobs before retiring, a recent survey by Transamerica Center for Retirement Studies found.

It’s a concept called phased retirement, and it’s catching on. Last November the federal government okayed a plan to let certain long-tenured workers 55 and up stay on half-time while getting half their pension and full health benefits. Says Sara Rix, an adviser at AARP Public Policy Institute: “The federal government’s program may influence private companies to follow their lead.”

Formal phased-retirement plans remain rare; only 18% of companies offer the option to most or all workers. Informal programs are easier to find—roughly half of employers say they allow older workers to dial back to part-time, Transamerica found. But only 21% of employees agree that those practices are in place. “There’s a big disconnect between what employers believe they are doing and what workers perceive their employers to be doing,” says Transamerica Center president Catherine Collinson.

So you may have to forge your own path if you want to downshift in your career. Here’s how:

Resist Raiding Your Savings

Before you do anything, figure out what scaling back will mean for your eventual full retirement. As a part-timer, your income will drop. Ideally you should avoid dipping into your savings or claiming Social Security early, since both will cut your income later. If you’re eligible for a pension, the formula will heavily weight your final years of pay. So a lower salary may make phased retirement too costly.

Cutting back your retirement saving, though, may hurt less than you think. Say you were earning $100,000 and split that in half from 62 to 66. If you had saved $500,000 by 60, and you delay tapping that stash or claiming Social Security, your total income would be $66,700 a year in retirement, according to T. Rowe Price. That’s only slightly less than the $69,500 you would have had if you kept working full-time and saving the max until 66.

Start at the Office

If your employer has an official phased-retirement program, your job is easier. Assuming you’re eligible, you might be able to work half-time for half your pay and still keep your health insurance.

Then ask colleagues who have made that move what has worked for them and what pitfalls to avoid. Devise a plan with your boss, focusing on how you can solve problems, not create new ones with your absence. Perhaps you can mentor younger workers or share client leads. “Don’t expect to arrange this in one conversation—it will be a negotiation,” says Dallas financial planner Richard Jackson.

Without a formal program, you’ll have to have a conversation about part-time or consulting work. To make your case, spell out how you can offer value at a lower cost than a full-time employee, says Phil Dyer, a financial planner in Towson, Md.

Giving up group health insurance will be less of a financial blow if you are 65 and eligible for Medicare, or have coverage through your spouse. If not, you can shop for a policy on your state’s insurance exchange. “Even if you have to pay health care premiums for a couple of years, you may find it worthwhile to reduce the stress of working full-time,” says Dyer.

Do an Encore Elsewhere

This wind-down could also be a chance to do something completely different. Take advantage of online resources for older job seekers, including Encore.org, RetiredBrains.com, and Retirement-Jobs.com. You can find low-cost training at community colleges, which may offer programs specifically to fill jobs for local employers. Or, if you want nonprofit work, volunteer first. Says Chris Farrell, author of Unretirement, a new book about boomers working in retirement: “It’s a great way to discover what the organization really needs and how your skills might fit in.”

Sign up for a weekly email roundup of top retirement news, insights, and advice from editor-at-large Penelope Wang: money.com/retirewithmoney.

MONEY Oscars

Patricia Arquette Wants You to Get a Raise — Here’s How to Make It Happen

The Oscar winner gave a shout-out to American women—and called for fair pay regardless of sex.

An exciting moment for many Oscar viewers on Sunday was Patricia Arquette’s Best Supporting Actress acceptance speech for her role as the protagonist’s mother in the film Boyhood.

“To every woman who gave birth, to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights,” Arquette said. “It is our time to have wage equality once and for all, and equal rights for women in the United States of America!”

Those words, which drew cheers from fellow actresses Meryl Streep and Jennifer Lopez, reflect growing tensions in Hollywood over the way women in the industry are represented and compensated. Not only do actresses have fewer roles available to them than men—only 30% of speaking characters—but they are paid less across the board. Even Academy Award-winning women face a huge pay gap: They get an extra $500,000 on average tacked on to their salary after winning an Oscar, compared with a $3.9 million bump for men.

Of course, pay discrimination is not limited to La-La Land. Women still make only 78¢ for every dollar a man makes, the Census reports, and that’s true across all wage levels, for everyone from truck drivers to top executives.

If you’re frustrated by your salary (or the pay earned by a woman in your life) and Arquette’s words resonated with you, here are some ways to change things right now.

1. Talk to a man whose job you want

A recent study found that women tend to express satisfaction with low pay because they compare themselves with female peers, and therefore never get a full picture of how underpaid they are relative to men.

Finding a male mentor in a position a notch or three above you can be a huge asset for many reasons, but one of the biggest is that he can give you an unbiased idea of what salary you should be asking for when you seek a promotion or new job.

2. Don’t say “yes” without making a counteroffer

Whether because of social expectations or a hesitation to appear too aggressive (a fear that is not unfounded given proven workplace biases), women are less likely to negotiate than men. One study revealed that only 31% of women countered the salary offer for their first job after grad school, versus 50% of men.

When you are asking for a raise or naming your salary expectations for a new job, it helps to come prepared. You’ll want to be ready with a clear description of your successes and how you have added value in your current position. And you should have an exact dollar figure in mind; research shows negotiating with a specific number makes you sound more authoritative than using a ballpark one.

If you get a resounding “no,” don’t just give up: Consider asking for a one-time bonus instead.

3. Become a mentor

It’s obvious advice to seek out strong mentors to get ahead at work. But taking subordinates under your wing can be just as effective for increasing your status.

Wharton professor Adam Grant has shown that women and men alike tend to be most successful when they balance both giving and taking at work. And women in particular can get a leg up as negotiators when they are in a mentor position, Grant found.

When the higher ups see you as a person who gives a lot and supports the people around you, it’s easier for you to take a little back—in the form of higher pay.

 

MONEY Workplace

Wage Equality Takes Center Stage at the Oscars

Patricia Arquette's acceptance speech at the Academy Awards put the gender wage gap at the forefront of discussion.

MONEY salary

The Real Reason Wal-Mart is Giving Workers a Raise

Walmart exterior
Joe Raedle—Getty Images

Wal-Mart is no altruist on pay.

Wal-Mart WAL-MART STORES INC. WMT 0.04% made big headlines when it announced pay boosts for its lowest-paid employees. Some investors may be appalled by this “altruistic” news, but don’t worry: it makes perfect business sense, and Wal-Mart’s smart to do it.

The Bentonville, Ark.-based megaretailer has made waves by announcing that it’s raising its minimum salary; soon, its lowest paid employees will make $9 per hour and by next year, the level will go up to $10, well above the federally mandated minimum wage of $7.25 per hour.

Some people aren’t jazzed about Wal-Mart’s decision. The stock dropped on the news Thursday, and some analysts have issued downgrades. Those are short-sighted responses, though. Wal-Mart’s doing the smart thing by working on the most controversial element of its business, and the one that makes many consumers believe its low-priced merchandise just isn’t worth the cost to many Americans’ personal bottom lines.

The move is going to cost Wal-Mart about a billion dollars, and Wal-Mart’s CEO Doug McMillon talked up the morale-boosting element of the strategy, as well as the idea of giving employees “opportunity” and a career path. People may feel cynical about his statements, but the spirit there is right on. Employees who are treated well are more engaged, and are more likely to provide a positive customer experience.

Wal-Mart gets a lot more attention for worker strikes than for its customer service, and that’s a problem that’s long overdue for a fix.

Take this job and shove it

As it stands now, Wal-Mart’s rating on job reviews site Glassdoor.com is a dismal 2.8, with only 44% of reviewers willing to recommend working there to a friend. Compare that to Costco (3.9, 80% would recommend to a friend), Whole Foods (3.6, 73% would recommend to a friend), and Starbucks (3.7, 76% would recommend to a friend). We can throw McDonald’s in for good measure, since it often shares the hot seat with Wal-Mart — its rating is 3.0, with just 50% willing to recommend a job there to a pal.

There’s been increasing attention to severe income equality and the fact that many people working for companies like Wal-Mart and McDonald’s MCDONALD'S CORP. MCD -0.58% are making poverty wages (and are reliant on public subsidization, which of course means we all lose). Those in the ivory towers may say the recession’s over, but there are still a lot of people out there who haven’t seen their wages rise much if at all as the economy supposedly “recovered.”

On the other hand, companies like Costco COSTCO WHOLESALE CORPORATION COST 0.17% , Whole Foods Market WHOLE FOODS MARKET INC. WFM 0.26% , and Starbucks STARBUCKS CORPORATION SBUX -0.6% , all treat their employees well — making them anomalies in the modern retail industry. (Starbucks, in fact, began rolling out a round of pay raises to baristas earlier this year.) They haven’t been subject to nearly the same amount of scathing scrutiny on the worker front as Wal-Mart has been.

Even more pointedly, they have managed to do so while being highly profitable, successful companies, and they have done what well-run capitalistic companies should do: they built employee care into their business missions without waiting for a law forcing them to.

Dollars and cents, not heart and soul

There are plenty of pins we can poke into the happy bubble of Wal-Mart’s announcement, not least of which is the fact that we’re still not talking about a heck of a lot of money even with the new wage floors. Wal-Mart’s wages would still leave some subsisting along the poverty line. Many activists have been rallying for what they peg as a more reasonable $15 per hour “living wage.”

Wal-Mart’s also not turning into a big softie. MarketWatch pointed out that the company’s press release not only included the news about the pay increase, but also a one-time $0.05 per share charge related to a “wage and litigation matter.” We all know that Wal-Mart’s been in the hot seat for years, but that is a good reminder that it’s facing dollars and cents risks on many fronts, including in court.

And of course, the specter of the possibility of a federal minimum wage hike hangs over it all as well. The truth is, should the minimum wage increase, companies like Wal-Mart that have already started dealing with it will be in a far better competitive and even financial position than those who haven’t. They — and you, if you’re a shareholder — will have a whole lot of peace of mind as the laggards struggle to adjust their businesses.

Positive reinforcement for positive business

All in all, though, maybe even the most critical among us should probably give Wal-Mart some credit for being on the right track. Business can be a force for positive change, and Wal-Mart’s high-profile move might help catalyze a little more of a voluntary “race to the top” regarding many Americans’ wages instead of the race to the bottom behavior that has been all too common in too many pockets of our economy.

And even the investors who are appalled at Wal-Mart’s doling out raises should think twice. Anyone who cares about capitalism and free markets should have always considered the idea that companies like Wal-Mart and McDonald’s actually weren’t doing any of us any favors by squeezing profits out of people and hardly budging over what the government demanded by law — resulting in a state in which so many citizens’ pay was so pathetically low that they have had to rely on public assistance.

Wal-Mart’s no altruist — it’s doing what it has to do, and it certainly seems like it could do more. Given Wal-Mart’s massive scale, though, this move will hopefully nudge more corporate managements to see the risk of not moving on this front. Not to mention highlighting to corporate American the importance of investing in its own employees. That would be a win for all of us.

MONEY salary

500,000 Walmart Workers Are Getting a Raise. Here’s How You Can Get One, Too

Walmart raise minimum wage $1.75
Gunnar Rathbun—Invision for Walmart

These 5 moves can help you make sure you get what you deserve.

Two corporate giants have made headlines recently for perking up their workers’ paychecks.

Last month, health insurance provider Aetna announced it would be raising the lowest wage it pays to $16 an hour, effectively giving raises to 5,700 of the company’s workers. On Thursday, Walmart followed Aetna’s lead, revealing it would be giving 500,000 associates a salary bump of at least $1.75 above the federal minimum wage.

While across-the-board wage increases such as these are unusual, other corporations are also expected to be more generous with pay this year. Among mid- and large-sized employers, the average increase in base pay is expected to be 3.0% in 2015, up from 2.9% in 2014 and 2.8% in 2013, according to HR consulting firm Mercer.

You can help your chances of boosting your pay with these five tips:

1. Ask at the Right Time

Choosing the optimal time to approach your boss about a raise will significantly increase your chances of success. Stay on top of your own industry’s salary trends and consider whether your company and division are doing well enough to afford what you’re asking for. It’s also a good idea to ask for a raise a few months before performance reviews so that salaries aren’t already set.

Read more: How to Tell if Now Is a Good Time to Ask for a Raise

2. Know What Others are Getting

Before you ask for a raise, you’re going to need to know what kind of raise is reasonable. Check sites like PayScale.com and GlassDoor.com to get an idea of the industry standard for your position, then consult your colleagues to see what the story is internally. For women, that means making sure to check with your male mentors as well. As MONEY’s Margaret Magnarelli writes, female employees tend to be underpaid relative to their male counterparts, and often remain unfairly compensated because they compare salaries with female colleagues who are also underpaid. Gathering a broad cross section of salary data can help break through the ceiling.

Read more: The Foolproof Way to Make Sure You Land a Big Raise This Year

3. Be Able to Prove You’re Better than Average

The 3% average bump that Mercer projects isn’t bad, but being better than the norm can be very lucrative. In 2014, Mercer said the highest-performing employees received a 4.8% raise—more than 2 percentage points higher than the average for that year. How do you show you’re the best of the best? Gather a portfolio of past endorsements and ask satisfied clients to write testimonials. Then do your best to quantify your accomplishments so that your boss has the hard numbers as well.

Read more: 5 Ways to Get a Big Raise Now

4. Identify Your Added Value

Think about what you do that no one else at the office can do—either where you’ve particularly excelled or what highly marketable skill you bring to the table—and then frame your ask around this added value. Jim Hopkinson of SalaryTutor.com suggests framing your requests as follows: “Not only do I have [all the standard requirements that everyone else has] + but I also possess [the following unique traits that make me worth more money].”

Read more: The Secret Formula that Will Set You Apart in a Salary Negotiation

5. Just Ask!

As Wayne Gretzky said, you miss you 100% of the shots you don’t take. According to CareerBuilder, 56% of workers have never asked for a raise, which is a shame because 44% of those who did ask got the amount they asked for, and 31% still got some kind of salary boost. It might seem daunting to ask for more money with the economy still in recovery mode, but job openings are the highest they’ve been in a decade, almost three-quarters of employers say they’re worried about losing talented workers, and raises are gradually getting larger. Being assertive can be scary, but don’t let fear stand in the way of a bigger salary.

Read more: New Study Reveals the Odds You’ll Actually Get the Raise You Ask For

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