Sometimes loyalty doesn’t pay, and can even compromise your financial security and mental health.
Think of what a game-changer it would be for your savings or debt-reduction goals if you were to earn more.
Consider the possibilities if you could achieve better work-life balance, not to mention the great feeling of accomplishment you’ll have when your career path is more clear.
Here are the financial signs you should find a better job.
If you haven’t had a raise in more than 24 months
The pandemic was hard on employers and employees alike, but this principle still holds true as we emerge from the pandemic.
Raises and promotions are a sign that you are thriving and so is your company. If raises (both merit-based and cost-of-living adjustments) aren’t happening for you regularly, it could mean you’re not in the right role, your organization isn’t performing or that you’re not being recognized for your efforts. There could be other factors, too.
Whatever the rationale, your compensation needs to grow regularly as your career and lifestyle grows, and you get one step closer to retirement.
If you’re an entrepreneur, you may need to amend this rule slightly to give yourself a 12- to 18-month window to adjust your business model to be profit-first. Your financial future can’t afford a negative-cashflow business for long.
If your pay is 20 per cent below market rate for your role
Don’t guess if you’re above, below or right at par with your pay. Get real data every six months.
Step one: Scan the market for comparable positions, and the respective posted salaries.
This effort will reveal how in-demand your profession is (more postings typically means a higher demand, which can translate into a higher salary); what the going rate is for each position (generally shared as a dollar range per hour or an annual rate); and the required skills, which is helpful to know especially if they’ve changed, which could mean you need to invest in training.
Step two: Check compensation databases.
Some of my favourites that are low-to-no cost are:
- Randstad (2021 salary guide available for download).
- Mercer Benchmark Database (MBD) — a paid source of data, but there are small hints and nuggets/presentations available on the website.
- Professional associations (such as APEGA), which often publish salary info.
You’ll quickly establish if you’re underpaid for what you do. If you are severely underpaid — by 20 per cent or more — you need to change jobs. That extra 20 per cent could literally make or break your retirement.
If there isn’t a clear career path for you
If you’re not growing, you won’t earn more. Setting career goals and working with your organization to accomplish them is critical to your professional and financial success. Certainly it can be OK to coast at certain times in life, but if you’re serious about having more money, you’ll need to map out a plan to progress.
These plans typically consist of two to three professional goals and one personal development goal that you set for the year, but update quarterly.
If you’re struggling with making a plan for your career, you may want to invest in career coaching, or pair up with a mentor.
If you’re working longer but making less (especially for entrepreneurs)
Did this happen to you over the past 16 months? You’re not alone. So many organizations had to trim back both on salaries and staff to make ends meet, sometimes at the expense of employee well-being. If there is no end in sight for your exceptionally high workload on a reduced salary, you need to look around for a different position.
Hiring is happening all over the place as organizations rebound and recover from the impact of COVID-19. Maybe you’ll want to give your employer a few more months to make things right, but not much longer. You need to put your finances and mental health first.
If changing jobs has the potential to drastically improve your financial, personal and professional life, go for it. It might take a bit longer than normal to secure a new position, but that’s OK. With good planning and a great new opportunity, there’s nothing to fear.