How to Earn More from Your Current Job (Without a Raise or Promotion)

This is a guest post from Lily of The Honest Dollar, a great new personal finance blog.

The most common ways to increase your salary are to get promoted or to negotiate a raise. But promotions don't come along often, and negotiating a raise may or may not result in a salary increase. So what do you do when you want to make more, but you're between promotions and raises? The good news is that you're not out of options. The bad news is that you'll need to get creative and may have to use a little elbow grease.

Low Effort, High Reward
401(k) match. Perhaps the easiest way to get your employer to give you more money is to contribute to your 401(k), if your employer offers a match. A 2007 Hewitt Associates survey [PDF] reports that 98% of employers put some money into 401(k) plans, and two-thirds provide matching contributions. According to Hewitt, the most common type of match is 50% of employee contributions up to 6% of pay. This means that if you make $60,000, then contribute $3,600 to your 401(k), your employer will kick in $1,800. That's free money that should never be left on the table, if you can help it.

Employee referral rewards. Most companies have employee referral programs, where an employee recommends a candidate and earns a bonus if the referral is subsequently hired. This is an effective way for firms to discover great candidates without paying exorbitant headhunter fees. But referral programs are not always well-publicized. Check with your HR department to see if a program exists and what the rewards are for referrers, then consider submitting a few referrals. Tread carefully, since referring a bunch of people who are not qualified to work at your company will reflect negatively upon you.

High Effort, High Reward
Ask for a better 401(k). Maybe your 401(k) doesn't offer enough choice to fully diversify your retirement savings. Maybe the only investment options carry high fees. Maybe you have to pay fees to the 401(k) administrator. If your 401(k) plan is unreasonably awful, it may be time to speak up and ask for a change; SmartMoney offers a few tips to lobby for a better 401(k). While this does not directly increase your income, it puts your money to work more efficiently. High fees can cost you thousands of dollars by the time you're ready to retire, and bad investment options can cost even more.

Improve your skill set. Even if your company didn't give you a raise this year, the best way to score one next year is to make yourself indispensable. One way to do this is to constantly improve your knowledge and skill set. This can mean taking training classes offered by your employer, seeking additional certification in your industry, or even getting an advanced degree. The good news is that some employers are willing to pay for education. Large companies may have established tuition reimbursement programs. If you're willing to do the paperwork and put in the study hours, you can get a graduate degree at a huge discount. [J.D.'s note: Even small companies can have tuition reimbursement programs. At the box factory, we'll pay for one class per term. Nobody ever takes us up on it, though.]

Non-Cash Rewards
Ask for non-monetary rewards. Bankrate.com notes that it's difficult to negotiate hard benefits, or “employment areas defined by statues and tax deductions [including] health benefits, pension plans and 401(k)s, stock options, insurance programs, tuition reimbursement and day care.” However, employers have more leeway when it comes to non-regulated benefits and rewards that don't necessarily require a large and lasting cash outlay, like a raise would. For example, consider asking for an extra week of vacation or a flexible work arrangement where you can telecommute once a week. After all, time is money, and getting more free time (especially free time with family or friends) can be a lot more valuable than a meager raise.

Volunteer within the firm. There are many ways to contribute to your company outside of excelling at your job. Join the recruiting team and participate in school events and interviews. Offer to write a company blog. Even organize the firm holiday party. These volunteering gigs may not have immediate or monetary rewards, but they will expand your in-firm network outside of your department. This might create career opportunities that would not otherwise have been available, and it doesn't cost you anything but your time.

Get a Virtual Raise
Taking advantage of all your company has to offer will require some effort on your part. In the short term, your paycheck may not get bigger, but you may be making more money nonetheless. On a $60,000 salary, in a single year:

  • You can get $1,800 by getting the maximum 401(k) match if you company matches 50% of employee contributions up to 6% of salary.
  • You can get $1,500 for referring a candidate who is later hired by your company. (Payouts vary, but the number seems reasonable given going rates in technology, nursing, and chemical engineering.)
  • You can get $11,000 more out of a 401(k) contribution of $10,000 this year if you manage to lower your investment cost by 0.5% per year for the next 20 years by convincing your company to cover administrative fees or offer lower cost funds.
  • You can get $5,000 in tuition reimbursement. Of course, you also get the benefit of additional education and accreditation.
  • You can get the equivalent of $1,200 in salary if you get one additional week of paid vacation.
  • You can get priceless career opportunities by expanding your network through volunteering opportunities within your firm.

Taken together, those are over $20,000 in non-salary benefits. Opportunities vary at every company, but you won't get a dollar if you don't try.

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Ron@TheWisdomJournal
12 years ago

Fantastic ideas. People often overlook these and fail to “manage” their own job benefits, thinking that the job of human resources.

The section on volunteering is spot on. By doing this one thing, you’ll increase your network and potentially help get yourself noticed by others in the organization.

Ron

Lily
Lily
12 years ago

Thanks again for having me, J.D.!

Sean
Sean
12 years ago

I am constantly amazed by people who don’t take advantage of their 401ks. You have to remember that not only do you sometimes get a match, which is free money, but that is pretax!

Lower your tax liability and get free money? How does that not make it onto every bodies radar?

The Saving Freak
The Saving Freak
12 years ago

I agree on the 401k conundrum. I also don’t know why more people are driving into work instead of trying to telecommute. This is a great benefit and makes for a better quality of life for most people.

Frugal Dad
Frugal Dad
12 years ago

I participate in our 401k right up to the match, then I contribute to Roth IRAs with any additional retirement money. THe match is great, but after that the tax-free withdrawals in retirement are worth missing out on the pre-tax deductions up front.

Caleb
Caleb
12 years ago

Wow. The company I work for makes millions every year but still treats the place like a small business. Were lucky to not have to pay for our coffee in the breakroom! Our 401k is 25% of the first 4% contribution of each paycheck, so if I made $500 a week and contributed 4% (which is $20) they would contribute 25% of the $20 bucks which is $5 bucks. Sucks!

David Cox
David Cox
12 years ago

The 401K company match is the best way to get those retirement accounts flowing. Then fully fund your ROTH!

Just make sure you don’t save too much for retirement and focus on building up those taxable accounts too so you can enjoy some of that money before you retire!

Ian
Ian
12 years ago

How about a discussion on our “benefit elections”. My company offers, Long/short-term disability, two dental plans, life insurance, health insurance, legal help, flexible spending accounts, etc all for a fee. Sometimes, I feel like it’s a waste of money to “elect” many of these options. I take the health, dental, disability, and ignore all the rest. The life insurance is only good for as long as I am an employee. I have term outside of the company benefits. Also, I claim one extra dependent on my W-4. This gives me a light raise and limit’s my interest-free loan to Uncle… Read more »

adfecto
adfecto
12 years ago

I have an additional suggestion for bringing home more money from your existing job. Where I work, and presumably many other places, when we go on a business trip our meals are covered by a daily allowance. I get a fixed amount for each day I’m gone regardless of how much I actually spend (only true for food; not for rental car, hotel, or other big costs). On a trip last year to Washington DC I got around $60 per day for food and incidental expenses. I used half of that amount and still ate very well. At the end… Read more »

fathersez
fathersez
12 years ago

Great ideas.

In our part of the world we do not have the 401’s etc, but the idea of tuition reimbursement, volunteering etc are equally applicable.

Jeff@My Super-Charged Life
[email protected] Super-Charged Life
12 years ago

These are great ideas. They also remind us of reasons besides just salaries to be thankful for the jobs we have. Benefits such as 401k programs that employers offer are expensive. I think that employees that truly believe they are fortunate tend to be the ones that advance and get raises. A grateful attitude is noticeable by employers and is usually rewarded.

Matt
Matt
12 years ago

I wish my company offered tuition reimbursement, I would be well on my way to a master’s degree. Or probably just working towards degrees in topics I find interesting.

If only I knew about tuition reimbursement when I was going to school.

Phil A.
Phil A.
12 years ago

My company offers no match but if it did I would take advantage of it. I still contribute a little bit to my 401(k) and more to a Roth IRA.

Dividends4Life
Dividends4Life
12 years ago

Lily: I always enjoy your posts, and this was a good one!

Best Wishes,
D4L

Lily
Lily
12 years ago

Ian – I totally agree that one should pick and choose which benefits to elect. Some benefits (like additional insurance beyond the basic package offered) still require employee contributions, and it makes no sense to put money in if it’s not something you need. I used the W4 trick as an intern because the IRS was treating me like I’d be making $50,000 for a year when I was really only making $10,000 for the summer. However, I’d be careful about claiming credits or dependents you don’t actually have. You run the danger of under-withholding, which may result in a… Read more »

Kai Jones
Kai Jones
12 years ago

Heh, I’m in a union, but the same kind of advice applies: read your contract, and make sure you’re taking advantage of every clause that applies to you. For example, we have disability pay with our health insurance–and you can get it for pregnancy and birth-related disability. One of the women here has horrific nausea in the first trimester, and can take a few weeks off to deal with it because she gets the disability pay.

We can also sell back sick days and vacation days under some circumstances–and then invest that money.

Bobita
Bobita
12 years ago

Tuition reimbursement sounds like a great idea, but every company I’ve worked for says that they reimburse for classes that are applicable to your current job. I’m a legal secretary looking to finish my business degree, so does anyone know how I might still take advantage of the benefit with that limitation? My company already provides extensive in-house technology training, so that’s not an option.

Brock#20
Brock#20
12 years ago

A big item that is missing is flexible spending accounts and dependent care accounts. I’m shocked how many educated people do not take advantage of these. Now, major chains like CVS and Walgreens even mark on your receipt which items count towards your FSA.

You can set aside an amount of money, pre-tax for health expenses. So, if you have a five dollar co-pay, you can pay that pre-tax, rather than post tax.

Kai Jones
Kai Jones
12 years ago

A big item that is missing is flexible spending accounts and dependent care accounts.

Eh, my husband has a medical FSA. One year we used it. It took a total of 65 hours of my time over the course of the year, plus $30 in photocopying and postage, to recover the money because of the onerous procedures required by the manager of the FSA. We decided the minimal net savings was not worth the frustration.

Brett
Brett
12 years ago

Hmm. most of these aren’t options where I work. I don’t know too many people that do have them. I think you need to do an article about how many of these benefits are disappearing and what to do about it. I wouldn’t be surprised if paid vacations become a thing of the past in the next 5-10 years.

Lily
Lily
12 years ago

I don’t think these benefits are disappearing. In fact, benefits like employee referrals and flexible work arrangements are on the rise. Companies realize that they can get better quality candidates (ones that are likely to do a good job and stick around, once hired) if they seek referrals. They are also becoming more receptive to flex time as telecommunication technology improves and work/life balance becomes a bigger concern. 401(k) match, in particular, is on the rise. What makes you think benefits like paid vacation are going away?

Brett
Brett
12 years ago

Basically because everything I’ve read regarding studies done over the last few years says that overall, benefits are on the decline, as well as 401k matching. Some of the articles I’ve read said that there was growth in benefits in some particular industries but that again, overall, benefits were on the decline. This dovetails (unfortunately!) with my own experience as well as everyone I know. I don’t of anyone who’s benefits have increased and my friends are from a wide range of industries. I don’t know if vacations are going away but I wouldn’t be surprised. It would be different… Read more »

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