Let’s play a game, draw the X and Y axis of a graph. On the horizontal X axis, label it “age.” On the vertical Y axis, label it “total income.” Now, draw a line of what your income path and growth rate would be if you had only a high school diploma. Now draw a line of what your income path and growth rate would be if you had a bachelor’s degree. Draw one for the industry and job title you are now, then draw one for the industry and job title you want to be in next, then one fanciful/dream job. Start drawing it for all the permutations you think you are, could’ve been, or could be.
Do you get something this? (with more lines, but this illustrates the point)
Let’s say you’re in the green line (B) today. It will take you 6 years to make the same annual as someone who is on the purple line (C) and has worked two years. According to the lines above, it takes someone on the blue line (A) to earn as much in a year as someone who works two years in the purple line (C) or seven years in the green line (B).
What’s my point? My point is that for most young (and aggressive) employees, regular, organic growth in your salary is not going to get you to where you want to be. 3-4% raises may keep you on pace or a little ahead of inflation. Waiting for your superiors to recognize your fine work will be effective for a small percentage. The key to increasing your income is to speed up or shift you income. Either demonstrate consistent and solid performance, itemizing out accomplishments and bringing them to the attention of your superiors, or demonstrate the accumulation of valuable skills, degrees, or certifications that can justify significant merit increases. Doing a good job is mandatory, but unfortunately it’s become as much of a discriminator as a college degree (almost required for many jobs and only gets you in the door).
(Incidentally, there is nothing wrong with wanting to be the blue line (A), because the blue line has a better chance of giving you more time with your family, more time with your kids, and more time with your friends than the other three – maybe :))
So, what should you be doing? The solution is to either shift your income path upwards or speed up your growth. What I discuss below isn’t meant to be treated as advice or anything like that, it’s merely my own thoughts on the matter and subject to the specifics of your situation. Please read it with that in mind, it’s designed just to get your brain juices flowing and not designed as an instruction manual.
Shifting Up Your Income Path
The key to shifting up your income path has a lot to do with education. If you don’t have a high school diploma, getting a GED will shift you up. If you have a high school diploma, a college degree will shift you up. If you have a bachelor’s degree, consider a master’s degree (hopefully with tuition reimbursement from your employer!). If you can augment your resume on the education bullets, you can negotiate higher salaries with your current or future employers.
Another key to shifting up your income stream has to do with job responsibilities. Promotions often, but not always, lead to shifts in income to keep your salary competitive with the market rates. If you’re an engineer, a promotion to a team lead should get you a raise above and beyond what you would’ve gotten if you stayed a non-technical lead. If you are promoted to a first line manager or above, you should shift to higher lines. If you aren’t, consider moving to a company that will reward you for taking leadership and management positions.
If you can’t shift (those aren’t the only two ways, but I think you see what I mean), or at least not now, try speeding it up.
Speed Up Your Income Path
A shift up is much harder than simply speeding up your path along the income lines. Whereas a shift up requires degrees or actual responsibilities, you can speed up your income line by simply increasing your value to the organization relative to your peers. If you learn new applicable skills that improve your productivity and show gains for your organization, they should reward you for it. If you don’t use Excel at all in your daily routine, going to an Excel class won’t help. If you do use Excel and can show productivity gains by going to a class, your improved performance, and your documentation of it, should lead to speeding up your income line so you get a little more than the standard raise everyone else is.
The second part, regarding performing better relative to your peers, is just as important as performing better. If you are surrounded by superstars and your department only has a set amount of money to dole out in raises, you might have to work your butt off just to keep up (it could explain why you may have a few bad raises!). If you are surrounded by a department of fools, it’ll be far easier for you to shine so you better take advantage of it. If you need ideas, it doesn’t hurt to ask around.
Build A Case
One crucial point that is applicable to both ideas is communication with your management and company leadership. I know a lot of people who, upon attaining master’s degrees, weren’t properly compensated for their efforts after the degree was awarded. Part of that was institutional (the company simply didn’t see why they should, so people went to other more enlightened firms) but part of it was communication. You have to build a case for yourself before anyone else will. Your manager has a job to do too and it’s not priority number one to ensure you get what you deserve… that’s your priority number one. So remember to build a case for yourself, don’t just assume people will recognize what you’ve done and compensate you for it.