4 Ways to Overcome Wage Inertia
by Aimee Chou, for EarnMyDegree.com
The adage "finders keepers, losers weepers" doesn't apply to your career during a recession. Not all job finders are keepers, and not all job losers are weepers.
Today's market of cancelled contracts, smaller budgets and devaluated portfolios makes it trickier for employers to pay seekers their worth, and to give keepers a raise or immunity from pay cuts. Whatever side you're on, you can win the compensation game during a recession.
For Job Seekers
The good news is you can still nail a job offer -- by networking, targeting recession-proof industries or blogging and volunteering. The bad news: A possible lower starting offer.
The question has gone from "What am I worth?" to "What am I worth during a recession?" and "What is my industry worth during a recession?"
Business majors, who previously enjoyed strong year-by-year starting salary increases, will see a plateau this year. According to BusinessWeek, the average accounting starting salary of $47,429 is not budging -- with rising inflation, that could be interpreted as a decline.
So how can you cope with the current wage inertia?
1. Think long term.
Some economists argue that cyclic recessions are necessary for economic growth. Keep this irony in mind as you use this time to sow your marketability by earning an online degree and finish industry-relevant personal or freelance projects.
Leery of a lower salary? Lower compensation is a small price to pay for long-term promotions, bonuses and stock-based retention awards. Starting salaries in nursing and teaching are in the strong mid-$40,000s, but may plateau soon. In sales or marketing, you may start with a smaller base salary. But after accruing commissions, promotions and loyal clients, top performers can double or triple their starting income.
2. Be a lifelong learner.
During the downturn, many graduates are seeking MBAs or graduate degrees instead of instant-payoff jobs in business and health, according to a University of Washington study. Programs like Kaplan are seeing recent double-digit increases in enrollment. On average the payoff, though it takes longer, can be up to a $37,265 difference between a bachelor's and a doctorate (U.S. Census Bureau).
For Job Keepers
The good news is, you've dodged the dreaded pink slip. The bad news is that lagging share prices, clients late on bill payments and industry-wide downturns (all symptoms of a recession) can add up to a pay cut. So how do you keep the both the salary and the job you deserve?
1. Sweeten the sour news.
Research your worth, by documenting ROI from a project you implemented, or salary comparison from the U.S. Bureau of Labor and Statistics. (Note: Union wage concessions may require a different process).
Negotiation can help you compensate for a lowered compensation: Telecommuting, reduced hours or stock-based retention options. Sometimes a pay cut can actually lead to lower taxes, same take-home pay and larger pensions.
2. Be pink-slip, interview-ready.
In dire situations, you may not be able to avoid massive layoffs. Your paycheck's buying power is already down 1 percent, according to the Economic Policy Institute. It's time to pack lunches, sock away long-term savings funds and avoid loans and credit cards -- while keeping your resume and interview suit fresh for the rebound.
The bottom line for keepers and seekers: You can save your own bottom line if you adapt wisely as the economy appears to bottom out.
For more information on career development and education opportunities, visit EarnMyDegree.com.
by Aimee Chou, for EarnMyDegree.com
The adage "finders keepers, losers weepers" doesn't apply to your career during a recession. Not all job finders are keepers, and not all job losers are weepers.
Today's market of cancelled contracts, smaller budgets and devaluated portfolios makes it trickier for employers to pay seekers their worth, and to give keepers a raise or immunity from pay cuts. Whatever side you're on, you can win the compensation game during a recession.
For Job Seekers
The good news is you can still nail a job offer -- by networking, targeting recession-proof industries or blogging and volunteering. The bad news: A possible lower starting offer.
The question has gone from "What am I worth?" to "What am I worth during a recession?" and "What is my industry worth during a recession?"
Business majors, who previously enjoyed strong year-by-year starting salary increases, will see a plateau this year. According to BusinessWeek, the average accounting starting salary of $47,429 is not budging -- with rising inflation, that could be interpreted as a decline.
So how can you cope with the current wage inertia?
1. Think long term.
Some economists argue that cyclic recessions are necessary for economic growth. Keep this irony in mind as you use this time to sow your marketability by earning an online degree and finish industry-relevant personal or freelance projects.
Leery of a lower salary? Lower compensation is a small price to pay for long-term promotions, bonuses and stock-based retention awards. Starting salaries in nursing and teaching are in the strong mid-$40,000s, but may plateau soon. In sales or marketing, you may start with a smaller base salary. But after accruing commissions, promotions and loyal clients, top performers can double or triple their starting income.
2. Be a lifelong learner.
During the downturn, many graduates are seeking MBAs or graduate degrees instead of instant-payoff jobs in business and health, according to a University of Washington study. Programs like Kaplan are seeing recent double-digit increases in enrollment. On average the payoff, though it takes longer, can be up to a $37,265 difference between a bachelor's and a doctorate (U.S. Census Bureau).
For Job Keepers
The good news is, you've dodged the dreaded pink slip. The bad news is that lagging share prices, clients late on bill payments and industry-wide downturns (all symptoms of a recession) can add up to a pay cut. So how do you keep the both the salary and the job you deserve?
1. Sweeten the sour news.
Research your worth, by documenting ROI from a project you implemented, or salary comparison from the U.S. Bureau of Labor and Statistics. (Note: Union wage concessions may require a different process).
Negotiation can help you compensate for a lowered compensation: Telecommuting, reduced hours or stock-based retention options. Sometimes a pay cut can actually lead to lower taxes, same take-home pay and larger pensions.
2. Be pink-slip, interview-ready.
In dire situations, you may not be able to avoid massive layoffs. Your paycheck's buying power is already down 1 percent, according to the Economic Policy Institute. It's time to pack lunches, sock away long-term savings funds and avoid loans and credit cards -- while keeping your resume and interview suit fresh for the rebound.
The bottom line for keepers and seekers: You can save your own bottom line if you adapt wisely as the economy appears to bottom out.
For more information on career development and education opportunities, visit EarnMyDegree.com.
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