Switching jobs is often an effective way to boost income. When to put yourself on the market
Want a pay raise?
Forget negotiating with your current employer. Sometimes the easiest way to get a bump is to find a new job.
Wage gains for people who have switched jobs have outpaced those who've stayed at one employer since 2011, according to the Atlanta Federal Reserve Bank's wage growth tracker, which uses data from the U.S. Bureau of Labor Statistics.
More from Invest in You:
These companies have a 4-day workweek. Here's what they've learned
Here are the 5 most valuable — and 5 least valuable — college majors
Make these financial and career moves before you quit your job
The gap between job switchers and stayers has widened in recent months. In June, the 12-month moving average of wage gains for those who switched jobs was 3.8%, while those who stayed saw 3.1% growth. In September, the 12-month moving average for job switchers jumped to 4.3%, while gains for job stayers increased slightly to 3.2%.
"This is usually the case outside of the current environment," said Brett Ryan, senior U.S. economist at Deutsche Bank. "Job switchers do well — you're not going to move unless you're getting paid more."
People want higher paying jobs
Workers are taking note of rising wages and using this moment to go for jobs that would mean a bigger paycheck.
Since February 2020, job-seeker interest has skyrocketed for higher paying jobs such as civil engineering, IT and help desk, media and communications and software development, according to a recent study by jobs site Indeed.
At the same time, job-seeker interest has plummeted for in-person, lower wage positions such as child care, food preparation and service, personal and health care, and loading and stocking.
"They're feeling a crunch to be able to get the workers they need," said AnnElizabeth Konkel, an economist at Indeed Hiring Lab and author of the report, adding that many of these lower-paying positions can't be done remotely.
This could work out in favor of workers looking for a raise, or to switch careers into a sector that's struggling to find employees, according to Konkel.
"On the employer side, it leaves them with the one main lever of raising the wage," she said.
What else to consider
Of course, the recent wage data encompasses many sectors and positions, and actual differences in pay can look much different.
Right now, increased pay doesn't necessarily apply to every sector, and the most wage growth and negotiating power is generally for those in sectors that have been hit hardest by the pandemic. This includes food services, child care and other essential jobs, ones that traditionally pay less.
This also means that workers have extra leverage to stay – and, if they like their current job, should use it to negotiate in their favor.
"It is not wrong for you to go in and negotiate another raise — especially if you're valued," said Julie Bauke, a career coach and president of the Bauke Group in Cincinnati.
When it makes sense to move
Still, other workers may be in a good position to make a jump. After the last year and a half, it may have become apparent that a current job isn't a good fit.
"If you're not being paid what you're valued or you don't see career potential for yourself at your job, then you'd best be looking for your next option," said Mandi Woodruff-Santos, a personal finance expert and executive producer and co-host of the podcast Brown Ambition.
Each time she herself quit her job for a new opportunity, her pay increased by about 38%, she said.
People looking to move positions right now should keep a few things in mind, she said. One is that because of the "Great Resignation," many people are considering career moves and thus some industries have become extra-competitive.
"It's a hot, bubbling pot," said Woodruff-Santos. "It doesn't mean that there aren't juicy opportunities right now, but it just may be that much harder to get to that offer stage."
She said that people should be casually looking for job opportunities even if they're content with their current position. That's a great way to seamlessly move from one position to the other, without a period of unemployment.
At the same time, if you're burned out or mistreated at a job and it's impacting your mental health, it may be time to quit — especially if you have emergency savings to fall back on, she said.
"It's not allowing you to approach your job search with the kind of focus and determination that I think is really required," she said.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
CHECK OUT: How to make money with creative side hustles, from people who earn thousands on sites like Etsy and Twitch via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.