Category Archives: Compensation

Is Your Staff ‘Willing to Walk Away’ in 2015?

Employers: It’s time to pay attention to your underpaid staff! Employees are ‘willing to walk’ as the path to more money may finally be here!

JobGiraffe, Karen Rae Horwitz, employment, job seeking, hiring, recruitment, staffing
Karen Rae Horwitz

Yes, I believe both employers and employees are aware that the economy is improving, with GDP growth increasing and the unemployment rate falling. And, while things for the average American could still be better, it seems that there are some signs that these improvements will soon begin to translate to positive changes in the salaries of the middle class.

One significant piece of evidence that salaries are poised to improve is the number of people willing to say goodbye to their current employer. A recent survey from Glassdoor.com showed that 35% of workers said they’d look for a new job in 2015 if they don’t receive a pay increase from their current employer. And while those under 35 and those making less than $50,000 are more inclined to leave their jobs, they aren’t the only ones open to changing the way they think about their salary in 2015. The survey also found that 31% of those making over $100,000 per year would look elsewhere for work if they don’t get a raise, along with 36% of those between the ages of 35 and 44. Those are substantial numbers that would have been unthinkable during the Great Recession!

What exactly does all this mean? Well for one, many of those people who will move on if they don’t get a raise will not actually have to quit, as nearly half of those in the survey also said they expect a 3-5% pay increase this year. But if they do choose to leave, they are more confident in doing so in 2015 as nearly half of those surveyed feel they could find equal or better employment within six months, which is the highest level of employee confidence since 2009. Add in the fact that in 2015 nearly 60% of employers expect to increase hiring and it seems clear that not only will more people be hired this year, but also those who are already employed will have more salary leverage than they have had in a long time!

How should employees handle this positive information? I suggest that if you have had a stagnant pay rate for many years, 2015 may be the time to have the ‘raise conversation’ with your boss. Pick the right moment though, and broach the subject in a thoughtful and non-confrontational way. Don’t just say, “I need a raise or I am out of here!” If your company had a strong quarter, or there is new hiring happening, this probably means your company is in a position to invest more in their employees. Do not be afraid to ask your boss what plans are being made for reviews and/or raises in 2015. Be sure to express your interest in “moving forward” with the company, and give them some time to respond before seriously engaging in a search to find a new position.

And employers, if you do not respond to this approach, or you refuse to have a meaningful conversation with your employees about a raise within a reasonable period of time, then you can be certain your most valuable people will begin to look at what their options are at other companies!

Each situation between employers and employees and their salaries, now and future, is unique; there are no blanket rules or strategies I can cite, but it’s clear that if you – the employee – have been thinking about asking for a raise or changing jobs, the positive improvements as of late have given you the most leverage and opportunity that has existed in years!

Not all employers are going to offer raises on their own; often the employee will still need to ask, but this is not a conversation to be afraid of anymore. And if current employers won’t ‘play ball’, good employees should join the trend and consider ‘walking away’ in 2015, because they will not be alone!

Karen Rae Horwitz
President
JobGiraffe

Karen Rae is President of JobGiraffe, formerly Paige Personnel Services, where she has guided her company through up and down economies for more than 20 years, advising both employers and job seekers on employment trends and challenges, and the strategies to meet them. She can be reached at KRH@JobGiraffe.com. 

Dear Lilly: Good news to report about the Gender Wage Gap!

Does the name Lilly Ledbetter ring a bell? Probably not; I would bet that less than half the people in the U.S. know who the courageous Ms. Ledbetter is. But if you ask anyone on the street “who makes more money – men or women?” the answer would resoundingly be “men” – and that answer is right.

Karen Rae Horwitz, JobGiraffe, jobs, job hunting, resumes, applying for a job,
Karen Rae Horwitz

In 1979, Lilly Ledbetter was hired by Goodyear; she retired in 1998 and then sued the company for paying her significantly less than her male counterparts. The lawsuit eventually reached the Supreme Court, which denied her claim because she did not file suit 180 days from her first paycheck even though she said she didn’t know about the disparity at the time. In dissent, U.S. Supreme Court Justice Ruth Bader Ginsburg wrote:

Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber’s plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236.

Subsequently, Congress passed the Lilly Ledbetter Fair Pay Act in 2009 to loosen the timeliness requirements for the filing of a discrimination suit so long as any act of discrimination, including receipt of a paycheck that reflects a past act of discrimination, occurs within the 180 day period of limitations.

Thanks to Lilly, there has been progress. And I have some good news to share here and now. Let’s take a look at the millennial generation’s gender wage gap.

A very interesting report came out last year. Two companies, PayScale and Millennial Branding, released an interesting study of the state of the millennial worker. Here are some of the findings related to the gender wage gap and what they may mean.

After taking into account job factors (title, experience, industry, etc.) the millennial wage gap between men and women is 2.2%. That’s compared to 3.6% for Generation X and 2.7% for baby boomers. Overall it is a positive sign that we are inching closer to pay equality among the sexes.

While part of this change may be attributable to a positive adjustment towards viewing men and women equally in the workplace, it also is a reflection of the advancement women have made in attaining education in recent years. Of those currently working aged 25-32, 38% of women have a Bachelor’s degree, compared to 31% of men. Among younger millennials (aged 18-24) women also make up a higher percentage of those that are currently enrolled in college (45% compared to 38% in 2012).

As the economy finally begins to approach it’s pre Great Recession employment levels and companies begin to hire more millennials for the 9 million jobs that were lost, it would make perfect sense that the wage gap would close if women are, on balance, the more educated group. But keep this in mind; analysis of past generations shows that gender pay inequality increases over time the higher up the “corporate ladder” one climbs (currently, at the executive level the wage gap is 4.9% among millennials, 6.2% for baby boomers and 7.4% for Generation Xers).

The end of the Great Recession is undoubtedly good for all, including millennials, as job seekers now have increased leverage, which means they have the ability to ask for a higher starting salary. A higher starting salary affects one’s earning pace for an entire career! Yet, for those millennials who entered the work force during the Great Recession, the bitter truth is they entered the work force when they had much less bargaining power. Many have addressed this issue by being much more open to changing companies and careers, with 45% of millennials saying that the ideal length to stay with an employer before leaving for a new job is around two to three years, while 41% of baby boomers believe it should be 5 or more years before one considers leaving.

What’s the takeaway for millennials, in terms of gender and salaries? While we won’t debate here whether it’s better that millennials are open to leaving a company quicker than previous generations, it is clear that if you are a millennial who is looking to switch companies – or are entering the workforce for the first time – you should not be afraid to attempt to negotiate a higher starting salary as your leverage has increased. For women millennials this is even more true; you should not be afraid to ask for the highest appropriate starting salary possible – and know that you should continue this attitude as you progress throughout your career – as education as well as hiring trends are clearly on your side!

While it is encouraging to see that the gender wage gap is decreasing within the millennial generation, it isn’t yet equal, so it is clear that women within the generation will need to keep fighting for it. They will need to fight for it when first hired, as well as when it comes to raises and promotions throughout their career.

Ms. Ledbetter, we are on our way, but we are not there yet.

Karen Rae Horwitz
President, JobGiraffe

Karen Rae is President of JobGiraffe, formerly Paige Personnel Services, where she has guided her company through up and down economies for more than 20 years, advising both employers and job seekers on employment trends and challenges, and the strategies to meet them. She can be reached at KRH@JobGiraffe.com.