I get a lot of questions from potential job seekers about what type of job offer to expect when they make a move. “What is a good job offer?”, “What is the current market rate for my skills and experience?”, “What will company X pay me?”
The short answer is, your offer will reflect what you are worth. And right now, for professional positions that require college degrees or greater, relevant experience, etc., that is just about a 5-10% increase in base compensation.
Do some people get more? Sure! Is it rare? YES! The reason for this “standard” level of increase is twofold:
First, supply and demand sets the price. Think back to Economics 101 in college. If demand is high and supply is low, price goes up. If supply suddenly increases relative to demand, price decreases. A given skill set and experience level comes with a pretty narrowly definable price point. Employers don’t wildly overpay for a skill set because they don’t need to. Conversely, they don’t underpay, otherwise people would leave for better pay elsewhere. Thus, the market has essentially set the rate for your skills and experience.
Second, that the average annual increase when you stay at the same employer is close to 2-3% annually, outside employers don’t need to create more of a financial incentive to attract talent. A 5-10% increase is actually quite generous when compared to what you can expect if you stay with your current employer!
Many people are surprised to hear this information. There is a common belief that a good job offer wildly increases your pay. It’s important to keep money in perspective. It really should not be a primary motivating factor when changing jobs! Making a career move should be motivated by better long term prospects, exposure to new skills and experiences, expanding your responsibility, etc. Money will always come to those who work hard and smart! Don’t let short term dollars cloud long term thinking!