Asking for a Raise vs. Changing Jobs: What to Consider

Every worker wants to be compensated fairly, especially in times of persistent inflation, high grocery bills, and steep interest rates. If your current paycheck isn’t cutting it, you might be faced with a challenging decision: Should you ask for a raise or start looking for a new job with better pay? This decision isn’t simple and involves many factors, from benefits to job satisfaction and career growth potential. Here are some ways to decide between changing jobs and asking for a raise.

How Much Can I Make From a Raise vs. Moving Jobs?

Whether you have to ask for a raise or automatically receive one annually, most employers increase pay by 3% to 5% at a time. It’s possible you’ll gain a more generous raise with a promotion, or if you request one and are a top performer. However, many employers limit salary increases, so workers can often find higher pay by switching to a different company where their pay starts off higher.

In pre-pandemic 2019 and 2020, you could score around a 10% pay increase by changing jobs, according to a 2023 Bank of America report. Then, as the “Great Resignation” tightened the labor market and put workers in high demand starting in 2021, companies paid a premium; job-switching could mean around 20% higher pay. But by April 2023, this bump shrank to 13%—partly due to job seekers having less bargaining power in the loosening labor market, but also likely due to wages rising from inflation.

Do I Really Want to Stay?

A job is about more than just money, so think about other impacts of staying versus going. For example, does your current position offer great benefits, room for growth, job satisfaction, work-life balance, and purpose, or are those things missing for you? Do you want to stay in this industry or role, or are you ready for something new? Weigh all aspects of work and have a gut check on whether more money alone is worth staying (or going).

Can I Ask for Anything Besides a Raise?

If you feel undervalued but you’re unsure a raise is possible, prepare for other benefits or perks you could negotiate. Just make sure your requests would add enough value to overcome a smaller (or no) raise. Consider trying to negotiate:

• More vacation or sick days
• Additional flexibility (remote working twice a week, a four-day workweek, or more flexible hours, for example)
• A higher title
• Changes to your role or responsibilities
• A guaranteed timeline for promotion
• Employer-paid professional development, certifications, or tuition assistance or reimbursement
• More stock options or equity
• Higher retirement account match
• Commuter benefits
• Health benefits, such as a gym membership

When Should You Ask for a Raise?

There can be a myriad of compelling reasons to stay at your current company and advocate for a raise rather than leaving. Here are a few situations when that could be wise:

You Really Like Your Job

There’s a lot to be said for getting fulfillment from your job, whether you enjoy your day-to-day work, company culture, or your coworkers. It’s tempting to look for greener pastures (and higher paychecks) elsewhere, but if you’re content in areas besides your salary, it could be worth staying and asking for a raise.

You’ve Had Recent Success

If you’ve just wrapped up a major project, or your company exceeded profit goals in part due to your work, your contributions and value are undeniable. You can seize these moments as opportunities to lobby for a raise. Remember that leaving for another job could earn you money, but you’ll also be starting over without this winning reputation.

You Have Valuable Benefits

Perhaps your pay could be better, but you have access to many valuable employee benefits, like student loan repayment assistance, life insurance, retirement account matching, health savings accounts, employee assistance programs, and subsidized gym memberships. These money-saving perks may make your job worth keeping, especially if you can also negotiate higher pay.

When Should You Change Jobs?

On the other hand, there are times when it may be better to look elsewhere, including when:

You Don’t Have Solid (or Any) Benefits

Just as it’s hard to leave a job with excellent benefits, it may be easier to ditch one without them. If you don’t have the essentials, like health insurance, or valuable perks like those mentioned above, changing jobs could net you more money-saving benefits plus better pay.

You Want a Bigger Change

Negotiating for a raise may not be the answer if you’re unhappy at work beyond your paycheck—unless the raise comes with other benefits or changes that address your concerns or outweigh them. If you’re already unhappy with other aspects of your job, such as a long commute or toxic boss, or you want a career change, this could be an opportunity to find a better fit elsewhere.

Your Salary and Growth Potential Are Too Low

Maybe you really like your job and workplace, but you’re told you won’t get more than a 3% raise each year. Or that the only way to earn a higher raise is to have a higher position, but none are open or you’re not a candidate. These could point you in the direction of leaving for another job with more room for growth—either in pay and/or in career advancement opportunities.

Frequently Asked Questions

How Often Should You Switch Jobs?

Switching jobs can be a strategic move for career growth and salary increases. However, it’s essential to consider the stability and growth opportunities within your current role before making a decision.

How Often Should You Ask for a Raise?

Asking for a raise should be based on your performance and the company’s financial health. Typically, employees ask for a raise annually or after significant achievements.

What Is a Typical Salary Increase When Switching Jobs?

On average, switching jobs can result in a salary increase of around 10% to 20%, depending on the industry and job market conditions.

Leverage a Potential Job Change for a Raise

There can also be a middle option. Some employers are more open to negotiating a raise when countering an offer from another employer. If you’re considering leaving due to pay and you land a job offer elsewhere at your desired salary, would you entertain staying with a raise? If so, reveal the job offer to your workplace and ask if they’ll negotiate your pay to keep you. Even if they can’t match the offer, you might nab a higher raise than you would without this leverage.

Regardless of the statistics or norms, this is a personal decision about what’s best for you and your loved ones. If you’re struggling to pay your bills, getting higher wages may be your sole objective. But if you have more wiggle room, you might consider all the other aspects of your compensation package and work-life balance. If you’re not able to get more pay through staying or leaving for now, it’s important to focus on living within your means until you can score a raise. Depending on your situation, that could mean getting on a budget, consolidating your debt, or picking up a side hustle.

At O1ne Mortgage, we understand the importance of financial stability and growth. If you’re considering a job change or need advice on managing your finances, give us a call at 213-732-3074. Our team of experts is here to help you navigate your mortgage needs and ensure you make the best financial decisions for your future.