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.”

MONEY Careers

What I Wish I’d Known About My First Paycheck When I Was 22

Tug of War
When you get your first job offer, you can dig in and ask for more (nicely). Paul Kelly—Getty Images/Flickr Select

Earning every penny you're worth when you join the workforce can pay off for the rest of your life. So don't hesitate to negotiate.

For many people, negotiating pay is not a welcome task. In fact, almost half of U.S. workers simply accept the first offer. And when you’ve just graduated from college and are interviewing for your first real job, your focus is probably on landing the job, not demanding top dollar.

I’m here to say that more often than not it’s worth asking for a little bit more. I’ve been there, and if I could sit down with my 22-year-old self, there are a few things I’d tell her about that first salary negotiation.

Employers Expect You to Negotiate

The greatest fear I’ve heard people express is that a job offer might be rescinded if they try to negotiate the pay. As long as you’re respectful and reasonable, that’s very unlikely.

The prospective employer has already expressed interest in hiring you. As in any negotiation, they expect you to do just that—negotiate. It’s okay to simply ask if the salary is negotiable or to suggest a number that is slightly higher than what’s proposed. Most employers will have a salary range in mind when they make you an offer, not a hard-and-fast number. If they are first to float a figure, they usually won’t start at the top of that range.

The best thing you can do for yourself is come to that discussion prepared so that you know what an appropriate counter-offer would be. Do your salary research ahead of time. You want to know the potential pay range based on the job title, city, company size, and industry, as well as what you bring to the table—your education and any relevant experience. Negotiating blindly is not a great plan. Proposing a salary number that’s too high or too low for the position just indicates that you haven’t done your homework.

Your Salary Will Level Out Around 40

Typically, your biggest opportunity for pay increases is in the first 20 years or so of your career, so keep negotiating well. When PayScale delved into the data, we found that pay essentially goes nowhere after age 40, once you account for inflation. Your early career is when you have the most opportunity to rise up in the ranks.

Once you’ve reached a certain level in your chosen career, meteoric growth just isn’t as possible as it was when you were starting out. Additionally, even if you continue to see pay increases in your later career, if your raises are not keeping pace with inflation, you may not be able to stretch your paycheck any further year after year. In fact, it could be shrinking.

Not Speaking Up Now Means Working Longer

I know retirement seems a long way off, but the earlier you start considering it, the happier you’ll be later in life. According to the 2013 Wells Fargo Retirement Study, 34% of the middle class expect to work until they are at least 80 years old because they will not have saved enough for retirement.

You don’t want to be one of those people, do you? You want to be in the group that planned early so you can retire in your sixties and travel the world.

Even a small difference in starting salary could mean some serious money over the course of a career, according to a recent study by researchers at George Mason University and Temple University. The study concluded that “a 25-year-old who negotiated a starting salary of $55,000 will earn $634,000 more than a non-negotiator who accepted an initial offer of $50,000” (assuming a 5% average annual pay increase over a 40-year career.)

Just remember to invest that extra $5,000 in a 401(k) plan or other retirement fund, especially if your employer offers a 401(k) match. Your 80-year-old self will thank you.

Lydia Frank is editorial director at PayScale.com, a site that provides on-demand compensation data and software to employees and employers.

MONEY

How the Economics of Playing Football and Basketball Compare

That loud roar you heard this week was NFL training camp getting under way. With less than six weeks until the Green Bay Packers head to Seattle for a game against the Super Bowl Champion Seahawks, fans across the country are following every move of their favorite players and planning for their fantasy football draft.

We decided to take a look at some of the important markers in the life-cycle of a professional athlete. From sporting gear to concussion rates, the gallery below provides a snapshot of what parents have to pay to get their kids on the field—and how long players stay in the big leagues once they actually get there.

To put the numbers in a little bit of context we compared football’s costs to basketball’s.

TIME Retail

Walmart Managers Average Salary Higher Than Starbucks

Wal-Mart Associate Jeff Parker stocks produce at store #100 in Bentonville, Arkansas on July 2, 2003.
Wal-Mart Associate Jeff Parker stocks produce at store #100 in Bentonville, Arkansas on July 2, 2003. Reuters

Their cashiers, however, make less than the national average of $11.22/hour

Walmart may often get criticized for not paying its workers a living wage, but according to a new working paper, climbing the corporate ladder within the chain can lead to substantial income. In fact, the National Bureau of Economic Research found, Walmart store managers make an average salary of $92,462 per year.

The authors of the new working paper used data from career site Glassdoor and the Census Bureau’s Current Population Survey to analyze and compare average salaries of employees at some of the U.S.’s largest retail chains including Walmart, Costco, Whole Foods, and Starbucks. According to the analysis, Walmart store managers are among the highest paid in the nation, with Costco leading the pack with average manager salaries of $109,000. At Starbucks and Whole Foods, store managers bring home on average $44,632 and $75,775, respectively.

However, while store manager pay ranks high, according to NBER, Walmart cashiers earn about $8.48/hour and are paid less than their counterparts at the other chains. At Starbucks, “baristas” make $8.80 an hour, on average, while those at Whole Foods and Costco make $10.31 and $11.59. Cashiers at three out of four of the retailers make less than the average national hourly cashier rate of $11.22/hour.

The paper also shows a significant gender gap, even among cashiers. While high school educated women in retail make 25% less than their male counterparts, women cashiers make 17% less. Among those with some college education, women make 20% and 21% less than men when they have a high school education and some college, respectively.

TIME compensation

25 CEOs Who Are Perfectly Happy Making a $1 Salary

HP CEO Meg Whitman Visits China
ChinaFotoPress—ChinaFotoPress via Getty Images

In the business world, there’s a sneaky version of success that goes beyond the seven figure salary: It’s the one figure salary.

Members of the $1 salary club earned just enough money in salary in 2013 to afford one McCafé from the McDonald’s dollar menu.

This phenomenon started in WWI and WWII, when executives sacrificed their salaries to help fund the wars, but were required to accept some form of compensation because U.S. law forbids the government from accepting work from unpaid volunteers.

But why would anyone today trade in a seven-figure-plus salary for one measly dollar?

Most dollar-a-year execs have received (or continue to receive) option awards which increase in value over time, as well as other forms of compensation—like bonuses and non-equity incentive plans. Such forms of compensation are based strictly on company performance, and not on a guaranteed yearly paycheck. This means executives can align their personal financial interests with company interests.

So who are the executives who can afford to collect a $1 a year salary?

Research engine FindTheBest scoured the web to find out, compiling compensation information from the SEC on thousands of executives from publicly traded companies across dozens of industries.

Following is the resulting list of 25 CEOs, Chairmen, and other top execs who banked $1 salaries in 2013.

Among the richest members of the $1 Salary Club are Oracle’s Larry Ellison (net worth $50 billion), Google’s Larry Page (net worth $31.2 billion), and Facebook’s Mark Zuckerberg (net worth 27.9 billion). Their wealth is so closely tied to their companies’ stock, that receiving a few hundred thousand dollars extra wouldn’t make a dent.

Of the 25 execs above, Larry Ellison made the most last year ($79.6 million), mostly due to the $76.8 million he received in option awards. Mark Zuckerberg also concluded the year with more than $1 in his pocket, making $653,165 through “other compensation,” compensation that does not fit into the SEC’s other defined categories of compensation.

Unlike Ellison and Zuckerberg, whose total compensation surpassed $1 in 2013 despite their salaries, Larry Page’s total compensation stayed put at $1. But that’s not to say he didn’t make money—Google’s stock price rose by 56 percent last year.

Two women also made the list, Meg Whitman (CEO of Hewlett-Packard) and Susan K. Barnes (CFO and Executive VP of Pacific Biosciences). Whitman, previously CEO of eBay, earned $17.6 million in 2013 despite her miniscule salary. Like Ellison, Barnes earned most of her money last year ($436,509) through option awards.

Among the executives who, like Larry Page, received only $1 in total annual compensation in 2013, are fellow billionaires Carl Icahn—Chairman of the Board of Icahn Enterprises whose net worth is $23.9 billion, and Richard Kinder—CEO and Chairman of the Board of Kinder Morgan Management whose net worth is $9.9 billion.

MONEY

Career Lessons from LeBron James and Carmelo Anthony

Miami Heat LeBron James and New York Knicks Carmelo Anthony
Miami Heat forward LeBron James is returning home to the Cleveland Cavaliers and New York Knick Carmelo Anthony is staying in New York. Brad Penner—USA Today Sports via Reuters

There is a lot more to relocating for a job than a bigger paycheck

Fair enough: There’s a limit to what mere mortals can learn from the career decisions of people who can routinely hit three-pointers under pressure or jump over other world-class athletes to dunk basketballs.

But a closer look at the high-profile decision-making process of NBA superstars LeBron James and Carmelo Anthony over what teams they’ll be playing for next season reveals that they grappled with questions that many of us face when deciding whether or not to take a new job.

Should you always take the higher salary?

If salary were the only factor when Anthony was weighing whether to stay with the New York Knicks or move to a new team, his decision would have been clear days or weeks ago. After all, the Knicks offered Anthony more than $120 million over five years to stay in New York vs. “just” $96 million from the Los Angeles Lakers and $75 million from the Chicago Bulls for four-year contracts. That comes out to $25.8 million a year to stay with the Knicks, $24.3 million to join the Lakers and $17.5 million to be a Bull.

But other factors apparently gave him pause. The Bulls are considered the team with the best shot at a championship next year, so a move to Chicago could have boosted Anthony’s chance at post-season glory. And Los Angeles might have provided better job opportunities for his budding actress wife, La La Anthony. In the end, it appears that money ultimately swayed Anthony to stay with the mediocre Knicks.

And while we don’t yet know all the details behind LeBron James’ decision to go to the Cavaliers, staying in Miami could have meant a pay cut if the team needed to make room for more high potential players.

In any case, it’s worth considering the possibility that joining a company that’s on a faster track or at top in its industry can pay off in the long run, even if it means less money upfront. Rosemary Haefner, VP of human resources for jobs site CareerBuilder, says you should make sure you see a clear opportunity to add skills that will advance your career or otherwise help you move you up the ladder faster — or that you’ll be able to accomplish something that will make you more attractive to future employers. That could mean a chance to add management experience to your resume, work closely with the top brass, or be part of cutting-edge projects.

Should I consider cost of living?

If you consider moving for a new job, take care that a higher cost of living in the new city won’t eat up any additional pay, warns Erol Yildirim of the Center for Regional Economic Competitiveness, which publishes a quarterly cost of living index for the U.S. “There’s a lot more than income that affects your standard of living,” he says. That may not be such a big deal for someone like Carmelo Anthony, even though New York City is regularly at the top of the CREC list, with the after-tax cost of living in Manhattan at twice the national average.

Housing is the biggest expense (for most people about 30% of income goes to home-related expenses). The index also takes utilities, groceries, transportation and health care into account. You can use salary data provider Payscale’s cost-of-living calculator, which will not only show you the cost-of-living difference, but how much you need to make in the new location to maintain your current standard of living.

Do taxes matter?

Taxes can take a big bite out of your income. You can’t escape taxes altogether, of course, but some places are friendlier than others. LeBron James, for example, is leaving one of just seven states that has no income tax. In New York, Anthony will be in one of the highest taxing states in the U.S. New York City is one of the few cities in the U.S. that has its own income tax and New York state has the eighth highest state income tax rate. Beyond income taxes, you should factor in property taxes and sales taxes too. You can find details for taxes on income, property and retail sales for every state at the Tax Foundation.

Is job security more important than a bigger paycheck?

A Knicks deal allows Anthony, now 30, to lock in a high paycheck for five years, one more than he’d been offered in either L.A. and Chicago. He might not command nearly as much as a 34-year-old free agent as he does now, so staying with the Knicks offers financial security. The lesson for the rest of us? If you’re at the peak of your career – for most people that’s in their 40s and 50s – this is the time when you have the highest earning power. If you’re valued at your firm, trading stability for a new job where you need to establish yourself is a risk. “When you’re the new guy, you may be more vulnerable if rocky times hit,” says Haefner.

What does a new job mean for your family?

Family was definitely a factor for LeBron. He told Sports Illustrated that returning to his hometown was always his intention: “I have two boys and my wife, Savannah, is pregnant with a girl. I started thinking about what it would be like to raise my family in my hometown. I looked at other teams, but I wasn’t going to leave Miami for anywhere except Cleveland. The more time passed, the more it felt right.”

Anthony publicly said his decision also hinged on how it would affect his family. Beyond his wife’s opportunities in Hollywood, the Anthonys have many ties to New York. La La Anthony grew up in New York and Anthony spent his early years there before moving to Baltimore. Moving their seven-year-old son Kiyan to a new city would have been another challenge. In an interview with VICE Sports, Anthony said

“My son goes to school and loves it here (in New York). To take him out and take him somewhere else, he would have to learn that system all over again. I know how hard that was for me when I moved from New York to Baltimore at a young age, having to work your way to try to make new friends and fit in and figure out the culture in that area.”

Talk about what relocating would mean for your family. Will your spouse be able to get a comparable job? If you have children, what are the schools like? How will the kids feel leaving friends behind? Is the lifestyle a good fit for everyone? How far will you be from your extended family?

Relocating will have a major impact on your professional and personal life. The more factors you weigh, the better the decision you can make, whether or not you make a multi-million dollar salary.

 

MONEY Careers

The 3 Things You Must Know About How Your Employer Sets Salaries

Row of people with labels announcing their salary.
Knowing exactly what your peers make isn't as important as knowing how your employer sets the range for your position. Tetra Images—Getty Images

Whether or not you think everyone should know how much everyone else makes, there’s one area where discussions around salary should be absolutely transparent.

Recently, the idea of salary transparency has been bubbling to the forefront—from President Obama signing an executive order in April prohibiting federal contractors from retaliating against workers who discuss their pay to companies like Buffer posting their employees’ salaries publicly for all to see. The same arguments come up every time this topic makes headlines: On one side are those who argue that employers are the only ones benefitting from secrecy; on the other are those who fear that complete openness around compensation could lead to jealousy and infighting among employees.

Whether you think it’s a fantastic or horrible idea for everyone to know the size of everyone else’s paycheck, there’s one area where I think discussions around salary should absolutely be transparent: discussing your own pay with your own employer.

If every individual employee had a better understanding of how their employers made decisions about compensation, there would be far less discontent around the subject of salary—assuming, of course, that the employers have a good and fair compensation strategy. (To be clear, fair doesn’t necessarily mean equal pay for everyone working in a particular role. A number of factors can, and should, impact an individual’s compensation: years of experience, education/training, skills, and performance, among them.)

There are three things everyone should understand about their own pay and that I hope employers are willing to discuss:

1) How your employer sets pay
Most employers use compensation data of some kind to set salary ranges for the various roles within the organization. However, most employees don’t know where that data comes from. It’s a good question, and one that more people should probably be asking. Next time you’re discussing your pay (or chatting up your HR person at the water cooler), just ask. If they can’t give you an answer, that may be reason for concern. You want to know your employer is using valid data to set appropriate pay ranges and not pulling a number out of a hat.

2) Where you fall within the salary range for your specific position
Not knowing if you’re being paid fairly can breed discontent. According to a recent study “pay secrecy might also hurt your work performance and prompt top talent to look for new jobs.” If everyone understands the full salary range for the given role, it’s easier to have open, honest conversations about why you fall where you do within the range. Even if your employer isn’t willing to share the range they’re using, do your own homework and make sure you have a sense of the salary range for your position. You can even share your findings with your employer so that they can let you know if it’s similar to the range they’re using. If it’s different, it’s another opportunity to ask about what data they’re using so that everyone is working off the same numbers.

3) What you can do to move up in the range
If you’re at the 50th percentile or above within the range for your position, you’re doing pretty well comparatively. But, if you’re below the 50th percentile, it might be time to ask for a raise. If you’re already a top performer, pull together a list of recent accomplishments that show how you’ve contributed to the company, and ask to set a time to discuss your pay with your manager. If the feedback is that you aren’t quite working at the level they’d consider for a raise, ask your direct manager what goals you should be working toward to make it to that next level. Keep the conversation focused on your career path and your desire to contribute more to your organization. A good manager will be more than willing to talk about how you can get there.

__________

Lydia Frank is editorial director at PayScale.com, a site that provides on-demand compensation data and software to employees and employers.

TIME

This Chart Tells You if You’re Being Underpaid

Shoulda been a doctor

If you ever wondered why your parents really wanted you to be a doctor, this chart serves as a good explanation.

Redditor Dan Lin took data from the Bureau of Labor to create a color coded, (very) long chart that breaks down how much different industries pay. Health care-related professions (displayed in a subtle fuchsia) dominate the top of the list.

The chart also provides interesting information on whether you’re being underpaid in your field–you know, just in case you needed some fodder for leaning in to your boss this week. Click to enlarge for a closer look:

(Vox)

MONEY Careers

How to Tell Your Spouse You Want to Take a Pay Cut

140619_FF_FaceToFace_1
Corbis

You've had it with your job. You're ready for a more fulfilling career. Now the hard part: Telling your spouse that you'll have to live on less. Here's what to say.

You’re ready to quit your miserable job and do something that you know will make you happier. But there’s a catch. You’ll need to take a major pay cut, and you haven’t talked to your spouse about it yet.

“Assume that it’ll be a very anxiety inducing conversation,” says financial psychologist Brad Klontz. “Money conversations are critically important for the health of a relationship, but they’re minefields.”

To avoid a bruising argument over your lower-paid gig, approach the topic this way:

YOU SAY: “I’m stressed out and unfulfilled at work, and I’m worried I’ve been taking it out on the family. I’m seriously considering switching careers, and I want your input.”

First things first: If you’ve been coming home from work cranky every evening, your spouse may have realized long ago that you hate your job. “This may be a more welcome conversation than you think,” says financial therapist Amanda Clayman. “If you’re not happy in a job, this may not come out of the blue.”

Make sure your spouse understands you’re opening a negotiation, not simply making a declaration that you’re going to quit. This is a decision that affects your whole family, so emphasize that you want to hear your spouse’s thoughts. “You need a collaborative attitude,” says Maggie Baker, a financial therapist and author of Crazy About Money. “Make your partner feel like they’re part of the solution.”

YOU SAY: “I’ve looked at our budget, and I’ve noticed some costs I think we could cut to make up for the shortfall.”

Come prepared. Before talking to your spouse, take an honest look at your budget and assess where you (or the family) can afford to cut back. “The best thing to do is to think through the solution beforehand,” says Klontz. Could you spend less on meals out, for instance? Could your next car be a two-year-old certified preowned vehicle, not a new model?

Spell out the sacrifices you’re willing to make, like taking on part-time work or slashing your personal spending. “If there are ways this can have more of an impact on you, you’ll probably get less resistance,” adds Klontz.

Related: Six simple steps for building a better budget.

YOU SAY: “Before I leave my job, let’s test out these cutbacks for a few months.”

Before you quit, create this stricter budget. Then give your thriftier lifestyle a test drive and see if you can stick to it. “If you have this discussion well before you change jobs, you can practice a less affluent lifestyle,” says Baker. “By play acting it in that way, you can see if it’s doable.”

YOU SAY: “This might be a tough adjustment now, but once I switch careers I’ll have a good chance at earning more down the road.”

Taking a short-term pay cut for a new job can be a smart long-term financial decision, especially if you’ve topped out in what you’re doing. “Sometimes it’s good professionally to make less money,” says Neal Frankle, a certified financial planner and author of Why Smart People Lose a Fortune. That’s especially true if you have many more earning years ahead of you (and fewer big-ticket financial obligations, like kids in college). “Strategically, the younger you are, the more it could make sense to make less money.”

In your new career, you might find it easier to move up the leadership ladder, or perhaps you have the chance to join a startup with high growth potential. Alternatively, look into whether the lower-paying job might have better benefits. If you can argue that your drop in pay will be temporary—or evened out by other factors—make that part of your case for quitting.

YOU SAY: “I’m sure no one in the family will mind if I’m less grouchy around the house.”

Play up the positive. Leaving a job that makes you miserable will probably rub off on the rest of your family. You might have more free time to spend with them, or at least you could be more relaxed and happy after you get home from work. Figure out what’s in it for them, and mention that too.

Keep in mind that seeing you happier in your career will probably make your spouse happy too. “In a healthy relationship, one partner’s happiness and well-being has value in the family,” says Clayman. “It’s not all about the money.”

Read more on money and relationships:

7 Ways to Stop Fighting About Money and Grow Richer, Together

Common Problems, Uncommon Solutions: How Seven Couples Have Tackled Their Money Challenges

When She Makes More: How to Level the Playing Field

 

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