TIME Mental Health/Psychology

Your Emotional IQ Predicts How Much You’ll Make

Colleagues at work
Getty Images

Social skills at work lead to a bigger paycheck

How good are you at reading another person’s emotions? $50,000-a-year good? Or $150,000? Your level of emotional intelligence may predict how much you earn, finds a new study published in the Journal of Organizational Behavior.

The researchers looked at a trait called “emotion recognition ability,” responsible for how well you can sense (and make sense of) another person’s emotions from their face and voice. Researchers tested and measured it along with other interpersonal skills—such as how socially astute they were, their networking savvy and how seemingly trustworthy they were—in 142 German workers.

High emotional recognition was linked to a higher salary, even after controlling for salary-bumping factors like age, gender, education, work experience and work hours.

“This very basic ability has effects on the interpersonal facilitation facet of job performance and, most notably, even on annual income, an objective indicator of career success,” the study authors wrote. “The better people are at recognizing emotions, the better they handle the politics in organizations and the interpersonal aspects of work life, and thus the more they earn in their jobs.”

That could give women, who may recognize emotions better than men, an edge—in theory, at least. One study found that female managers who could more accurately assess nonverbal cues got better satisfaction ratings from their subordinates—an advantage that wasn’t detected in men.

MONEY Health Care

The Hidden Financial Benefits of Keeping Yourself Fit

running shoes hovering over a scale
Geir Pettersen—Getty Images

Investing in fitness can generate financial rewards as well as health benefits.

You know exercise is good for you. What you may not know is that working out can have financial benefits too.

Plenty of research suggests that overweight people spend more on health care, but it’s not just the thin who stand to save. Fact is, regardless of your weight, if you’re a couch potato you’re likely missing out on earning and saving opportunities.

The Payoff in Your Paycheck

Health care costs aren’t the only way physical activity is a benefit. People who work out regularly, as in at least three times per week, are more productive at work than those who don’t, according to research published in the Journal of Occupational and Environmental Medicine. Those who get sufficient exercise also miss fewer workdays, according to the same study. Those absences can translate to lost income and lost opportunities for advancement.

Another study published in the Journal of Labor Research found that men who work out regularly can expect to make 6% more than their sedentary counterparts, on average. For women, the pay boost is higher: Fitness-savvy females make 10% more, on average.

A Nudge From the Boss

If you’re not already working out, it doesn’t have to cost an arm and a leg to start.

For starters, some employers just flat-out pay their employees to work out as part of workplace wellness initiatives. For example, IBM offers cash to employees who meet certain fitness goals. Employees at Google and Zappos can use on-site fitness classes and facilities, enabling them to skip membership fees at traditional gyms. Even if your company doesn’t currently offer wellness benefits, it might soon: Under the Affordable Care Act, employers can receive grants to get one started.

Your employer may have a deal worked out with a local gym where employees can get discounted rates. Even if your company doesn’t offer such an incentive, chances are that your health insurance provider does. UnitedHealthcare offers reimbursements of $20 per month to members who use one of many participating gyms, while Blue Cross Blue Shield has worked out a $25 membership fee for their members at over 8,000 gyms nationwide. These insurance giants aren’t the only ones in on the game—most health care insurers offer some type of fitness benefit for members.

Just Do It

On the other hand, skipping the gym altogether may be your biggest money saver. If a participating fitness center isn’t available near you, or you’re just not the gym-going type, there are plenty of ways to get in shape for free. You can use the myriad online videos in the comfort and privacy of your own home, such as those offered on Bodyrock.TV or YouTube’s workout channel. If you like mobile apps, try Daily Workouts free app, or iPump. If you’re close with your co-workers you can start a lunchtime walking group. Your boss may just end up rewarding you for it.

Read more from NerdWallet Health, a website that empowers consumers to find high quality, affordable health care and lower their medical bills.

MONEY pay gap

Why Microsoft CEO Satya Nadella STILL Has It Wrong on Raises for Women

Microsoft Chief Executive Officer Satya Nadella
Manish Swarup—AP

The exec has taken back his comments that we should count on karma to boost our salary, but that doesn't mean he gets what it means to be a female at work today.

Easy for a dude to say that women should have “faith that the system will actually give you the right raises as you go along.” Especially a dude who makes $7.6 million and sits at the top of one of America’s largest companies.

But Microsoft CEO Satya Nadella, who made that comment in answer to a question about how women should ask for a salary increase—in front of a room full of women at the Grace Hopper Celebration of Women in Computing on Thursday—at least seems to have realized the error of his statement.

On his blog last night, he acknowledged:

I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s [Maria Klawe, computer scientist and moderator] advice was the right advice. If you think you deserve a raise, you should just ask.

Great that he owned the mistake. But what’s worse, the fact that he didn’t realize that women are paid 22 cents less on the dollar than our male peers—or the fact that he still doesn’t realize it’s not as simple as “just asking” for us?

Yes, We Pay a Penalty for Not Asking

Assuming you care remotely about women’s issues, you’ve seen the research showing that few women negotiate salaries. (By the by, it goes all the way up the ladder. Nadella’s fellow C-suiter GM’s Mary Barra noted at Fortune’s Most Powerful Women Summit that she had never in her career asked for a raise. The emcee then polled the audience on how many of them also had never asked, and “the majority of the conference’s high-powered female attendees raised their hands,” according to Fortune‘s Broadsheet.)

Our reticence has a compounding effect over our careers. By not asking right off the bat, Carnegie Mellon economics professor Linda Babcock has said, we leave lost earnings “anywhere between $1 million and $1.5 million” on the table.

But We Pay a Penalty for Asking, Too

Yet Babcock’s research found that we may be on to something with our sense of caution. Simply stating the case for why we deserve a raise doesn’t tend to get women to the same result as it does men. In fact, it can actually hamper our career progress.

For a study published in 2005, Babcock and Hannah Riley Bowles, a senior lecturer in public policy at Harvard’s Kennedy School, asked participants to watch videos of men and women asking for a raise. The guys and gals in the video used the exact same scripts.

The result? Participants liked the men and agreed to give them the bump in pay, but found the women too aggressive. While they gave her the raise, they did not like her. In particular, male study participants were less willing to want to work with the female negotiator.

We know that being well liked—a quality we women struggle with starting from the first grade-school birthday party we’re not invited to—is also key to getting ahead. So we’re caught between a high heel and a hard place.

Or, as Joan Williams, founding director of the Center for WorkLife Law, put it in The Huffington Post,

If women act too feminine and don’t ask, they end up with lower salaries. If they act too masculine and ask, then people don’t want to work with them. Women walk a tightrope between being too feminine and too masculine. Men don’t, which is one reason why office politics are trickier for women than for men.

So We Have to Give an Oscar-Winning Performance to Get What We Want

The research Babcock and Riley Bowles have done has found that women have to be more, well, “womanly” in their approach in order to get the raises and promotions that they deserve and come out the other side smelling like a rose.

You know—positive, solicitous, and putting others first. Less shark, more 1950s housewife.

Acknowledging herself that these findings are “depressing,” Babcock (along with Riley Bowles) concluded that being collaborative—trying to take the perspective of the company and hiring manager and using “we” statements instead of “I”—tends to be more effective than other approaches. They’ve also emphasized trying to be “authentic” by using language that feels comfortable.

That doesn’t feel the same as “just ask”—it requires us to act a part when what we simply want is for our managers to respect us as workers and people in a gender-neutral way.

We want to be able to walk in and say, “I brought in $2 million in business this year and am underpaid relative to my position,” and be better paid and just as well liked at the end of it.

You know, like a dude.

Related:
5 Ways Women Can Close the Pay Gap for Themselves
When She Makes More: How to Level the Financial Playing Field

MONEY

Hey Millennials, Watch What You Say About that New Job, Promotion or Raise

Trophy shelf
DGP&C—Getty Images

Your friends may not be as happy for your good news as you'd think.

You earn a raise or a promotion, and the first person you want to share the good news with is your significant other or a close friend. It’s instinctive.

But these days, it’s best to proceed with caution—especially if you’re a Millennial. If your bestie isn’t doing so well at work, news of your big promotion or bonus could strain the relationship.

“Work trajectories are incredibly unpredictable for all generations working today, but particularly for Millennials in the early years of their careers,” says Lindsey Pollak, author of the new book Becoming the Boss: New Rules for the Next Generation of Leaders. “With young professionals leaving jobs more quickly and the barrier to entrepreneurship quite low thanks to the Internet, it is likely that Millennial friends or significant others will have widely disparate levels of career or financial success.”

Friendships can be tested when there are income differences at play. When one friend has a lot of money to spend on fancy dinners, shopping trips and lavish vacations while other friends are struggling to pay the rent, says Pollak, it can lead to disagreements over how to spend time together or, at the least, a bit of discomfort.

So how should you break the news of a promotion, salary increase, or job change to a close friend who’s struggling financially or career-wise?

First, take a moment to empathize, Pollak says: “Ask yourself what you would want your friend to say if the roles were reversed,” she says.

Then, try to give the news a more sensitive spin. Concentrate on sharing it in a humble way, says Pollak. And as a general rule, leave out specific numbers, like the size of your salary increase. In other words:

“I’m really excited—I just found out I got a promotion to the associate role I’ve been wanting!”

or

“It looks like I’ll be getting a nice bonus at the end of the year. Can I take you out for drinks to celebrate?”

rather than

“I am getting a huge raise—like $35,000 more than I make now! Can you believe it?!”

Depending on the friend and how close you are, you may decide that it’s best to stay mum. “It’s really a personal choice depending on your relationship and how public the news is,” says Pollak.

But keep in mind that not sharing can be just as hurtful, in some cases. “No friend wants to feel that you excluded him or her from your career news because he or she isn’t as successful,” says Pollak.

Finally, what if your significant other is the one who’s struggling?

“Characterize your success in terms of ‘we’ — especially if you are in a long-term committed relationship,” says Pollak. “And use your promotion as an opportunity to thank your partner for being supportive and helping to make your success possible.”

If that doesn’t do the trick, she says, “then you might want to look at bigger issues in your relationship.”

Farnoosh Torabi is a contributing editor at Money and author of When She Makes More: 10 Rules for Breadwinning Women. She blogs at Farnoosh.TV.

MONEY College

5 Quick College Diplomas That Can Lead to Good-Paying Jobs

140929_FF_HighPayingDegrees
Blend Images—Getty Images

You don't have to spend four years on a bachelor's degree to get a job that pays at least $40,000 a year. New research from one state identifies several shorter college programs that can lead to lucrative jobs.

Over the long run, people with four-year college degrees and graduate educations earn more on average than workers who spend just a few years in school. But you don’t necessarily have to invest a lot of time and money in a four-year degree to get ahead. In some cases, new research confirms, a quicker education can lead to a good-paying job.

“There are many paths to the middle class, including two-year technical degrees from community colleges,” says Mark Schneider, president of College Measures, who authored a study of recent graduates of Tennessee colleges that was released today.

The findings are based on College Measures’ analysis of earnings data for millions of workers collected from state unemployment insurance offices. So far six states, Arkansas, Colorado, Florida, Tennessee, Texas and Virginia, have allowed researchers to track government-reported earnings after students leave school.

For the latest state report, College Measures tracked five years worth of earnings for all Tennessee workers who earned any kind of college certificate, diploma, or degree in 2006, drilling down to which majors, and which schools, produce the highest earners. The results, says Schneider, “confirms other findings from other states.”

Only a few types of two-year degrees consistently lead to high-paying jobs, however, and there is a wide variation in earnings by college, some of which may have to do with the local labor market. “You do have to be really careful about which degree you get,” Schneider says.

Those with associate’s degrees in electrical engineering earned annual salaries of about $42,000 within a year of leaving school. They typically progressed to more than $61,000 after five years. Those who earned certificates in heavy equipment maintenance made about $35,000 within a year on average and about $42,000 after five years.

Similarly, a 2011 report by Georgetown University’s Center for Education and the Workforce found that 28% of people with associate’s degrees earned more than the average salary reported by those with bachelor’s degrees.

This new data from states is helpful because it identifies exactly which community college and which majors produce students most likely to earn bigger paychecks, says Jeff Strohl, research director for the Georgetown center. “If you are going to roll the dice on a particular school or major,” says Strohl, “the new data will give you an idea of how people end up, earnings-wise.”

According to College Measures’s new report on Tennessee workers, these five programs that don’t take four years can lead to good-paying jobs.

Degree type Subject Avg. earnings in 1st year Avg. earnings in 5th year
1-2 year certificate Precision metal working $33,100 $41,900
1-2 year certificate Heavy equipment maintenance $34,800 $42,600
Associate’s Industrial production $41,400 $46,200
Associate’s Nursing $47,300 $54,300
Associate’s Electrical Engineering $42,000 $61,500

The earnings reports, however, are sobering for those who get associate’s degree in other fields. The average starting salary for Tennesseans with an associate’s in liberal arts was about $28,000. Five years out those folks were earning about $35,000, roughly equal to the pay of those who earned an associate’s in business but less than most workers with technical degrees.

What’s more, students shouldn’t assume they will earn the average earnings published in these kinds of reports, warns Thomas Bailey, director of the Community College Research Center at Columbia University. “A lot of this depends on other factors, such as the local labor market and the student.” In other words, your coursework and workplace performance matters too.

To find four-year colleges that are likely to help you find a good-paying job, you can search Money’s rankings of the best value colleges – colleges across the country with the best combination of net price and high-earning alumni. (College Measures advised Money on the development of the rankings, which used earnings estimates from a 2010 to 2013 national survey of 1.4 million Americans by Payscale.com.)

MONEY salary

5 Ways Women Can Close the Pay Gap for Themselves

woman standing at bottom of steps with man standing above her
iStock

New Census data found that women earn 78¢ to every $1 men do. These moves can help you get closer to even on your own paycheck.

If you have two X chromosomes and a job, the latest numbers on the wage gap will likely leave you feeling frustrated: Women make only 78¢ for every dollar a man makes, the Census just reported, marking all of a 1¢ improvement over 2012.

Meanwhile, Republican senators blocked the Paycheck Fairness Act this week, which called for greater salary transparency and would have required employers to be able to prove that wage differences were based on factors other than gender.

Overcoming the barriers to equal pay isn’t proving to be easy. And there are some factors we can’t move the needle on as individuals. For example, childbearing counts against us, in what economists have dubbed the “motherhood penalty.” We pay both a per-child wage penalty and also may be dunned for working fewer hours because of our caregiving responsibility. And then there’s straight-up discrimination, which is very hard to prove despite being so palpable to many of us at certain moments in our careers. (Perhaps this explains why one study found that 41% of the pay gap is unexplained!)

Closing the gap a penny at a time is still progress. But for those of you who don’t want to—or can’t—wait around until 2058 to see equal pay, here are five strategies to at least get you closer to even with your XY counterparts.

1. Negotiate smarter…

Working women have heard it all before: We’re not aggressive enough in asking for higher pay; we are bad at negotiating. But if do negotiate aggressively, well, that gets held against us.

But we’ve got to find a way to make it work for us if we want to get paid a fair wage.

So what can we do? Hannah Riley Bowles, a senior lecturer in public policy at Harvard’s Kennedy School who has done research on what makes women successful in negotiations, has found that being collaborative—using “we” and trying to take the perspective of the company and hiring manager—tends to be more effective than other approaches.

She also emphasizes authenticity, so try to come up with language that feels comfortable and natural for you to use.

2. …and from the outset.

A 2011 study by Catalyst tracked 3,300 high-performing students in M.B.A. programs as they began their careers, and found that while 47% of women and 52% of men had countered the initial offer made for their current job, only 31% of women vs. 50% of men had countered the offer for the first job they had out of grad school.

While it’s good that women are catching on to the importance of negotiating, we need to encourage them to do it sooner.

“Failing to negotiate your salary from the start is not only an initial mistake; it is one that will continue to follow you and will be compounded over the years, disadvantaging you throughout the remainder of your career. Every raise you get, every bonus you receive and even the number of stock options you are awarded, will be smaller because these amounts are normally determined as a percentage of your artificially low base salary,” wrote Lee Miller, author of A Woman’s Guide to Successful Negotiating on six-figure job-search site TheLadders.

Say you started out $5,000 behind your male peer, making $40,000 vs. his $45,000. If you each got 3% raises for each of the next five years, you’d be making $46,371 vs. his $52,167, expanding the difference to $5,798 and you’d have given up $26,546 in income differential in those years.

The longer this goes on, the harder it is to catch up.

3. Push for promotions early on.

According to Payscale, “women’s pay growth stops outpacing men’s at around age 30, which is when college-educated women typically start having children.” Furthermore, women’s pay peaks at age 39 at $60,000, vs. $95,000 at age 48 for men.

That suggests that a smart move would be to try to move up the ladder before you decide to raise a family.

“How women negotiate their career paths is arguably a more important determinant of lifetime earnings than negotiating a little extra money,” Hannah Riley Bowles told The New York Times recently.

4. Work in a fairer field.

Part of the problem, according to Sarah Jane Glynn, associate director for women’s economic policy at the Center for American Progress, is that a large proportion of women are clustered in a relatively few fields: 44% are in 20 occupations. And typically within those professions, the majority of workers are women. As Glynn has written,

“Female-dominated industries pay lower wages than male-dominated industries requiring similar skill levels, and the effect is stronger in jobs that require higher levels of education.”

So just try for a higher-paying male-dominated field, right? That can help. Harvard labor economist Claudia Goldin found that, for college grads, moving into such a profession would eliminate an average 30% to 35% of the wage gap.

But that’s not always a home run. Goldin found that female aircraft pilots and financial advisors earn less on the dollar compared to male peers than the average worker, at 71% and 73% respectively.

Goldin did find that the pay gap is much smaller than the average in certain fields—including ad sales, dental hygiene, HR, chemistry, pharmacy, and computer programming. But she pegs the slim difference to the fact that these fields allow a specific kind of flexibility that allows one worker to easily sub out for another, if, say, someone has to stay home with a sick kid.

5. Toot your own horn.

That Catalyst study of M.B.A. grads found that, of those women who said they made their achievements known to others in the organization, 30% had greater compensation growth than peers who did not promote themselves.

Some of the qualities found in these folks: “ensuring their manager was aware of their accomplishments, seeking feedback and credit as
appropriate, and asking for a promotion when they felt it was deserved.”

Sounds easy enough on paper, but in real life, this kind of self-promotion isn’t always easy for women.

To make it more palatable, Laura Donovan of Levo League suggests being selective about the moments you do this (e.g. yes to scoring the $1 million client, no to pushing through the report that’s expected of you), choosing the right audience for your message (don’t blast the full staff), and focusing on facts rather than self-congratulation (“I just wanted you to know that we’ve signed the contract with Client Y, for $1 million over two years….”).

Also, focus on the upside: The Catalyst study suggested that self-promotion can help you gain sponsorship from important allies who can help you further advance in your career, and hopefully get you closer to closing the pay gap.

TIME Congress

Eric Cantor’s Huge Pay Day

Eric Cantor delivers a speech in Richmond, Va. on June 10, 2014.
Eric Cantor delivers a speech in Richmond, Va. on June 10, 2014. Steve Helber—AP

The former House Majority Leader will get $3.4 million in his first 16 months at new employer Moelis

Nearly three months after a historic primary defeat, former House Majority Leader Eric Cantor announced he’ll join investment bank Moelis, and follow in the long tradition of lawmakers profiting on their knowledge of the regulatory and political landscape post-Congress.

And boy did Cantor cash out.

Cantor’s $3.4 million compensation package for the next year and four months puts his congressional salary into stark relief. Since he was elected Majority Leader in 2011, Cantor earned $193,400 a year, around $20,000 more annually than a rank-and-file member.

But as Vice Chairman and Managing Director at Moelis, he will receive a $1.4 million signing bonus, $1.6 million in incentive compensation next year and a $400,000 base salary — plus reimbursement for the reasonable cost of a New York City apartment for his first 12 months, and a hotel equivalent rate thereafter.

Cantor wasn’t doing too badly before he left Congress, of course, with the Center for Responsive Politics estimating his net worth in 2012 at around $9.3 million. But the move will certainly bump him into a higher category of wealth.

That said, Cantor won’t be making as much as he might have as a lobbyist, as the seven figure salaries of some former congressmen can attest. Billy Tauzin, a Louisiana Republican congressman who retired in 2005, made $11.6 million in a single year in 2010 while helping to craft President Obama’s Affordable Care Act as leader of the Pharmaceutical Research and Manufacturers of America, according to Bloomberg. Former Connecticut Senator Chris Dodd makes nearly $3.3 million a year as the head of the Motion Picture Association of America. In 2011, former Oklahoma Rep. Steve Largent’s total compensation as CTIA-The Wireless Association’s top lobbyist was reportedly $2.7 million. But it’s hard to quibble with a signing bonus worth more than seven times your annual salary.

The move to Wall Street wasn’t unexpected as Cantor, one of the Republican party’s most prolific fundraisers, had close ties to the financial services industry. Three of Cantor’s top campaign contributors during the most recent election cycle were investment firms Blackstone Group, Scoggin Capital Management and Goldman Sachs, according to the Center for Responsive Politics. Chris Jones, a managing partner of CapitalWorks, predicted to TIME in June that Cantor would take a “prominent role” at a major bank.

MONEY pay raise

5 Ways to Get a Big Raise Now

Envelope With a Money. Image shot 03/2013. Exact date unknown.
Alamy

The best salary bumps go to the most valued workers. Here’s how to make sure you’re one of them.

All signs point to a rapidly improving job market, giving workers the upper hand over employers when it comes to getting a decent pay increase.

“The economy is heating up, and employment is improving. Employees should have more leverage and more confidence to ask for more,” says Bill Driscoll of staffing firm Accountemps.

It’s about time. While pay increases have steadily been rising since the end of the recession, the gains have been modest. Mercer is projecting an average pay raise of 3% for workers in 2015. That’s up from 2.9% this year, 2.8% in 2013 and 2.7% in 2012.

But for top performing and highly skilled workers, the pay bumps are much plumper.

Mercer’s survey shows the highest-performing employees received average base pay increases of 4.8% in 2014 compared with 2.6% for average performers and 0.1% for the lowest performers.

“Differentiating salary increases based on performance has become the norm,” according to Rebecca Adractas, a principal in Mercer’s Rewards consulting business. “It’s an effective way for employers to recognize top performers without increasing budgets dramatically.”

Here are five ways you can snag a better-than-average raise.

1. Gather your accolades. You know you’re good at what you do, but when clients, customers and respected colleagues say so, that carries weight with higher-ups. Collect emails of praise from your boss, ask customers or clients to write testimonials for your work, and get feedback from your manager after completing projects.

2. Prove you’re a top performer. There’s nothing like a number to show you are delivering on the job. Quantify your accomplishments. Sure, that’s easier if you’re in sales and you can show you’ve more than hit your targets or landed a big account. Did you implement more efficient ways to get things done, cut costs to meet budgets, take on additional responsibilities above and beyond your normal job duties? Those count too.

3. Know what to ask for. Are other people at your firm getting raises? How is your company doing? Is it hiring people or laying them off? Even companies cutting back don’t want to lose experienced employees. That doesn’t mean you’ll get a raise, but it will help if your request is grounded in reality.

It’s also important to know how you stack up against others in your position. If you’ve been at your company a long time, you may not be making as much as recent hires. Use tools such as PayScale.com’s salary calculator to research compensation by experience level, company size, and the city where you work. You can also talk to colleagues or even co-workers who have recently left your company about how much people make in your position. It’s still taboo to talk about salary, but if you ask for ranges, it’ll be an easier discussion to have.

4. Ask. Seems like the obvious place to start, but 56% of workers have never asked for a raise, according to a recent CareerBuilder survey. Sure, it can be an uncomfortable conversation, but this stat from the survey should give you courage: Two-thirds of workers who asked for a raise received one.

And now is a good time to have the conversation. Companies draw up their budgets for the next year in the fall, beginning in September. Wait till December to talk with your boss and it may be too late.

5. Don’t take no for an answer. If your manager isn’t willing to give you the pay bump you’re looking for, ask what you can do to get it down the road. Take notes and set a time to follow up. After the meeting, send an email thanking your boss for talking with you and summarize what you discussed so you have in writing what was laid out.

If a bigger than average pay increase isn’t in the cards because budgets are tight, consider other perks that you’d value. “Smart companies are retaining their talent in a myriad of ways besides salary increases,” says Driscoll. That includes one-time bonuses, working a flexible schedule, additional vacation days, telecommuting, covering more of the cost of health benefits, a richer 401(k) contribution, even cell phone reimbursement. “There are other ways to increase your salary without getting a pay raise,” he says.

Related:
7 Reasons It’s a Great Time to Ask for a Raise

MONEY Raises

7 Reasons It’s a Great Time to Ask for a Raise

John Gillmoure—Corbis

The sluggish job market is finally kicking into high gear, and that's good news if you are itching for a decent raise this year.

Stocks have been on a bull run since 2009, corporate earnings are soaring, and the housing market is surging. Now the latest economic reports show that the sluggish job market is finally catching up to the rest of the economy.

If you’ve been thinking about making your pitch for a raise, here are seven reasons why now might be the right time.

1. Job openings are highest in more than a decade. After rising for five straight months, the number of available jobs hit 4.7 million, the highest since February 2001, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, out Tuesday.

2. Competition for jobs is less stiff. There are two unemployed workers per job opening, down from three in the fall and seven during the height of the financial crisis.

3. The number of people quitting jobs—a sign that workers are more confident in landing a new one—is at 2.5 million, the highest since June 2008.

4. The number of jobs being created rose by more than 200,000 for the sixth straight month in July, the longest string of gains since 1997. Meanwhile, unemployment is the lowest since 2008, at 6.2%.

5. Raises are bigger. According to Mercer’s 2014/2015 US Compensation Planning Survey, the average raise in base pay is expected to be 3.0% in 2015, up slightly from 2.9% in 2014, 2.8% in 2013, and 2.7% in 2012. Workers rated above average, a group that accounts for 36% of the workforce, will get salary increases between 3.7% and 4.8% this year, according to Mercer.

6. Temp jobs are turning into full-time gigs. Conversions (giving full-time jobs to temporary workers) are at a three-year high, according to staffing agency Manpower.

7. Employers are really worried about losing talented workers. Turnover is up dramatically: 51% of employers are seeing workers leave, vs. 30% in 2012, according to OI Partners. Nearly three-quarters of employers say they are worried about losing highly skilled workers.

Of course, some of the optimism depends on what industry you’re in. For example, the average raise in the energy sector is projected to be 3.5%, vs. 2.8% for people who work in consumer goods, according to Mercer.

And while the picture is brightening for the long-term unemployed—the number of people without a job for six months or longer fell to 3.16 million in July, vs. 4.25 million a year earlier—it remains twice the number it was before the recession in 2007.

Still, economists are optimistic that salary increases, absent from the rebound in the job market, will finally kick in.

Wage growth is likely be “one of the big stories over the next 12 months,” says Capita Economics chief U.S. economist Paul Ashworth in his latest research note. Among positive signs: a sharp increase in the proportion of small businesses saying that they are planning to raise compensation. And a rising proportion of households in the Conference Board’s consumer confidence survey saying that they expect their incomes to rise, while fewer are saying they expect their incomes to fall.

Tomorrow: We’ll tell you the right moves to make to land a raise as the job market improves.

MONEY Careers

Why Your Boss is Working Harder to Keep You Happy

Revolving Door
Your boss doesn't want you to head out the door. Exploit that. ONOKY - Photononstop—Alamy

With hiring and job turnover up, a new survey finds that companies are having trouble attracting and hanging on to talented workers. Use that to your advantage.

Boss brought in cupcakes for no particular reason? Sweet. Even sweeter? You might be seeing more morale boosters at work these days, whether in the form of baked goods or bonuses. A new survey finds that employers are having a tough time attracting and retaining top talent—and with a little smart negotiating, that could mean good things for your career.

According to the new Towers Watson Global Talent Management and Rewards Survey, hiring and turnover are on the rise in offices around the world, including in the U.S. And mobility has its downsides.

Of 1,637 companies surveyed worldwide, nearly two-thirds report difficulty attracting top performers (65%) and high-potential employees (64%), an increase from two years ago. More than half of employers surveyed say it is hard to hold on to high-potential employees (56%) and top performers (54%).

Pay to Stay

Of course, one approach to getting workers to stick around is to offer them more money. And employers know that. “The survey data would indicate that they understand compensation is an important retention driver,” says Laura Sejen, managing director at Towers Watson.

Just last week, a survey by a major business group found that employers are starting to expand payrolls and raise wages. After years of decline, sign-on bonus programs are at an all-time high, and retention bonuses are surging, according to an analysis of bonus programs and practices by WorldatWork released in June. Of the businesses WorldatWork surveyed, 74% used sign-on bonus programs this year and 51% used retention bonus programs this year.

What Money Can’t Buy

So how come bosses still can’t figure out how to hold on to their best workers? Another new Towers Watson survey suggests they’re a little out of touch when it comes to judging the importance of other factors, such as perceived job security and confidence in senior management. In a separate survey, the Towers Watson Global Workforce Study of 32,000 employees worldwide, the group found that employees rank job security and confidence in senior leadership among the most important reasons they stay with a company. But employers didn’t rank either factor as a key attraction or retention driver.

“Those are really important to employees,” says Sejen. “Employers don’t necessarily rank those as highly as they should.”

To get a better sense of what it takes to keep employees enthusiastic, some bosses are trying to listen more closely, says Rose Stanley, a Total Rewards practice leader for WorldatWork. “A lot of organizations will do satisfaction or engagement surveys,” says Stanley.

They’ll even conduct “stay interviews” (as opposed to exit interviews) to pick employees’ brains about how their rewards packages, schedule flexibility, and work environment could be improved to inspire them to stay.

“It’s a way to connect with employees and figure out what’s going on,” says Stanley.

How You Can Leverage the News

Even if your employer hasn’t reached out to you yet, come up with your own requests. If you’ve been craving a more flexible schedule or higher pay, now could be the right time to ask, says career consultant Maggie Mistal.

Mistal has noticed that many employees have lingering anxiety from the financial crisis and fail to realize their own worth to their employers. “Some folks I work with are in a mindset of ‘I’m just lucky to have a job,’ when in reality they’re the people bosses want to hold on to,” she says.

To improve your own situation, Mistal advises, first figure out what would improve your job and make you likelier to stick with your company. Once you have a good idea of your goals, let your boss know you’d like to talk.

“The magic term is: ‘I’d like to get your feedback on some ideas,’” says Mistal. “Managers are willing—and a lot of them are even excited—to have that conversation.”

Open your discussion with gratitude, emphasizing how much you enjoy working at your company or with your boss, advises career coach Roy L. Cohen. Then make your request clearly, with a positive angle. If you’d like to telecommute two days a week, for instance, highlight that a more flexible schedule could make you more productive.

“Focus on how you’re helping the company achieve even greater success,” says Cohen.

Instead of making an ultimatum, stay open to feedback from your boss, Mistal advises. If your boss isn’t sold on the idea of telecommuting, offer to check in periodically throughout the day, or to give your flexible schedule a two-week test run.

But don’t demand too much all at once. Even in an environment where your boss is working harder to hold on to great employees like you, you don’t want to come off as smug.

“Never be greedy,” says Cohen. “Greediness is always remembered. Even if you feel you’re worth it, make sure you can back up your request.”

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