6 Simple Ways to Significantly Increase Your Pay
Not only can you increase your pay, you may even be able to double it. To secure a pay increase, follow these six tips to get on the fast track to a super-sized paycheck.
1. Say Bye-Bye. In a healthy economy, you will keep pace with inflation with 4 percent annual raises, but you certainly won't get ahead. Changing companies is one of the fastest ways to get a pay increase. Often new hires start at a salary that it took their peers years to obtain. With a fresh start you can negotiate a higher salary with a new company that has not pigeonholed you into a particular salary range. Having an offer in hand can also give you leverage at your current company to get a significant raise or promotion.
2. Start a business. Take charge of your earning potential by starting a business. This way you determine your compensation and pay increases over time. But patience, determination – and a good business plan – are key. Young businesses typically require time and energy to reap big rewards. Investment banker, Chris Norman agrees. Several years ago, he and a partner left their jobs and opened a boutique investment banking firm in Atlanta. "One of the most difficult challenges is creating brand presence and making the transition to doing everything yourself," he says. But, there are significant pros. "You have tax advantages that you never were able to take advantage of as an employee. We have some highs and lows, but we've definitely been able to generate more than twice our previous income," he says.
3. Start packing. Some cities pay higher – much higher – for the same profession based on supply and demand and cost of living. PayScale.com shows a software developer with five years experience in Miami can boost his salary 69 percent by moving to San Francisco, and an experienced dental hygienist in Memphis, Tenn., earns 77 percent more in Chicago. Be sure to run a cost of living comparison to ensure higher housing, taxes, and other cost adjustments won't eat up a pay increase in your targeted city.
4. Boost your knowledge. Achieving a substantial pay increase sometimes means changing careers or earning an advanced degree in your current field. If you've hit the glass ceiling in your profession, going back to school for a degree with higher earning potential or getting additional training may be the answer. For instance Payscale.com shows a copywriter who majored in English averaging $41,065 could command an average salary of $79,718 in business after earning an MBA. Kailei Richardson says earning her MBA helped her double her salary after working as a consultant for a major firm. "If you look at pure salary, I made a 47 percent increase in salary. However, if you look at my first year salary factoring in signing bonus, I had an 86 percent increase, but including relocation it was a 106 percent increase," says Richardson who now works as a marketing manager in Dallas.
5. Consult a career coach. Many high achievers have that je ne c'est quoi. One way to increase your pay is to learn the secrets of their success. A career coach can assess career pitfalls and help propel professionals to executive ranks. Books such as Leadership on the Line by Ronald Heifetz or Moral Mazes by Robert Jackall also offer smart insights to the nuances of corporate success. Often people don't realize that while performance is important to success, personality and knowing how to navigate the system are probably equally important, if not more so.
6. Go solo. If you are experienced in your field and have good contacts, going the independent contractor route can be highly lucrative. Industries such as IT, law, business, and medicine are just a few that pay big to contractors. "Contracting afforded me the opportunity to see a return based on expertise and hours worked. As a salaried employee [at my old company], my yearly assessment didn't factor in current market rates," says Wayne Nelson, a web applications developer in Atlanta, who switched companies and his status from full time to contractor this year. He says he doubled his salary in one move. He notes that being proficient in the most in-demand coding languages and the major database systems increase marketability in web development.
There is a downside: Independent contractors often foot their own bill for health insurance, must manage their own employment taxes, and have unpaid vacations. They also lose out on the perks of 401K matching. However, Nelson says he found retirement strategies and a health insurance plan that greatly offset the compensation loss from a full-time benefits package.