Want to Ask the Boss for a Raise? Do This, Not That
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I'm J.R. Whalen in New York. Think you're due for a raise? There are some very clear do's and don'ts to keep in mind before going in to talk to the boss. We'll explain in a moment. First, these money headlines. The annual publication from Vanguard titled How America Saves says the average 401k account balance in 2017 was about $104,000, while the median was about $26,000. The big difference between the median and the average is due to a smaller number of accounts that have large balances. But in a longer-term look at median balances, 2017 is actually lower than 2007. This pattern could reflect the expansion of auto-enrollment, which increases participation but also produces smaller balances. That is, more people save, but the accumulations are smaller because employees are typically enrolled at a default contribution rate of 3%.
And the Wall Street Journal Streetwise team says the overall roughly 1.7% gain among U.S. markets in the first half of 2018 is truly unusual. The S&P 500 has swung up or down by less only five times in the first half of a year since 1963.
How does the current labor market affect your chances of getting a raise?
But in a more ominous tone, the Streetwise team points out that other similarly calm periods in recent history were times when investors might have been ready to hit the sell button. June 2000, shortly before the dot-com crash. June 1990, the last month before a recession. June 1978, two months after rising inflation began to accelerate. And June 1965, which was followed by a brief boom before the 1966 bear market. The Streetwise team points to the Federal Reserve, the global economy, and President Trump's trade war as factors that could tilt markets in the second half of the year. This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. With the jobless rate at historic lows, it's not only a job seeker's market, but there's pressure on managers to retain workers and persuade them from jumping to another job.
And that could tilt the balance of power when asking for a raise toward the employee. But there are some best practices to keep in mind before going in to see the boss. Tom Gimbel is founder and CEO of staffing and recruiting company LaSalle Network, and he joins us to discuss.
Why should you research your company’s finances before asking for a raise?
So, Tom, have you seen a labor market before as tight As it is these days?
No, I've been in the business, JR, almost 25 years and I've never seen a labor market as tight as it is right now.
And the tight market can give employees leverage when asking for a raise or promotion. The first thing you suggest is to do some research on the company's finances and figure out is the company actually profitable?
Yeah, I think there's a lot that goes into it. I really try to stay away from the word leverage. I think employee-employer relationships should really be one that's mutually beneficial. And when you have one side trying to take advantage of the other, I think that's when things get a little hairy. And so to understand what the company's objectives are, how what your job does affects the company overall, and then where you fit in the marketplace in that universe is really – it's not just simply – I'm here, I do my job, I deserve more money. There's a lot more that goes into it. And remember, the goal of a company is to remain profitable. It's not to give all the money away. So you have to really have some keen understanding.
Right. And sites like salary.com are a good resource to see how your salary measures up against your peers. But a worker should measure their work performance as well.
So often when somebody has a bad day or the boss gets mad or whatever it may be, they go on salary.com or a similar website and they just check and see what that is. And it's only as accurate as the data people put in. Some people put in their total comp. Somebody put in their on-target earnings. Other people put in just their base salary. So it can be skewed as well. To really look and say, what's your work-life balance if that's important to you? How much time do you put in at the office? Where's your exposure if there's a downturn in the economy?
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