Mellody Hobson provides some tips for job seekers and employees.
This morning, I want to talk the tightening labor market, and how to take advantage of that. We found out on Friday that the economy has created enough jobs to drive the unemployment rate under 5% for the first time since February of 2008! The past six months have also seen wage growth, with average hourly earnings ticking up one half of a percent in January alone, a great sign that the labor market has tightened to a point that employers are having to pay people more to keep current workers and attract new ones as they compete for candidates. All of that is good news for workers, and I have a few tips to help seize the moment.
First: job seekers. What advice do you have for them in this labor market?
Let me start out with some numbers here: in a January survey, 30% of employers reported experiencing a shortage in skilled labor. That number should tell all job seekers that one of the biggest ways to take advantage of a tightening job market is to hone your relevant skill sets. This can mean signing up for a massive open online course – in anything from economics to zoology – or brushing up on your computer skills so you can build better spreadsheets. The point is, having a command of the relevant skills is certain to give you a boost in your job hunt.
Second, walk in to your interviews armed with knowledge of the current state of the company. Check out stock performance and earnings information if possible. Search the news to see if there are any stories about how they company is doing. While the labor market is improving, we have seen some companies struggle while others are booming, which means it is important to know as much about the company as possible. If the company just had a down quarter, you need to know that, as it might affect your negotiations.
How can people take advantage if they want to stay in their current job?
For current employees, the skill component features prominently as well. By honing and building your skills to benefit your company, you will be well positioned to take advantage of the tight job market, as companies are likely to work harder to keep their best talent in this environment. It is also important to demonstrate your value and commitment by identifying and carving out some areas where you can demonstrate your investment in the company.
These will vary for everyone, as investment does not always mean management or heading up a project. What I do mean is selecting specific tasks or projects that you are involved in, and committing to being the person who will ensure that they are completed to the highest standards possible. By taking the initiative to improve all of the things that you work on in the company, you are helping everyone else out, and reinforce your value.
Once we make clear we bring something to the table, how do we benefit in this labor market?
At the end of the day rising wages, clear qualifications and great commitment mean nothing if you are not prepared to ask for that slightly higher salary or a raise. Survey after survey show that talking about compensation is the most difficult thing for any candidate or employee to do. One in five Americans don’t negotiate at all when they are offered a new job, and just under half of employees do not ask for a raise during their performance review! This is a huge missed opportunity. In order to get what you are worth, you have to be willing to ask for it!
For a job hunter, this starts with going into the interview with a salary range that fits your skill set. Look up salary information for the position you are applying for and salary variation company and geography. Sites like Salary.com or Glassdoor.com may actually have salary numbers specific to the firm. You can also ask friends, family or colleagues who are already working in that field. The second key to taking advantage of the current labor market is that you have to be willing to negotiate.
If you are currently employed, you have to be prepared for this conversation as well. In this case, being prepared means being thinking through the process ahead of time, demonstrating your skills and building a list of your contributions and qualifications within the office.
Any thing else?
Even though wages are ticking up and the job market is tight, when you are trying to take advantage of it it is helpful to remember that it isn’t always about more money. There are a lot of other ways you can be compensated. Take your benefits package: Maybe a company cannot boost your salary, but they can increase the match for your 401K, or they will pay for your transportation costs? You have to remember it is not just about the numbers on your paycheck.
Finally, in terms of negotiating, there are two ruled: be patient, but have a limit. If at first you get a ‘no,’ provide alternative suggestions, like those items I just mentioned.
However, if you are offered a job, but the compensation is too low and they won’t budge, you have to know when to walk away. There are certainly other jobs out there that will pay you for your skills. The same is true for a current job. If you have worked there for years without a raise, and there isn’t one in sight, it is probably time to start looking for a new job. You have to know when to walk away.