What to Expect In a Pay Increase When Changing Jobs

What Is a Reasonable Pay Increase To Expect When Changing Jobs?

In our professional experience recruiting specifically within the Legal Technology market, we have identified 3 key areas which firms and corporations in the eDiscovery and Litigation Support industry use for determining offers of employment and pay increases.

(1). How much you are earning currently.

Current base salary and total compensation are a major factor when a company determines what to offer. Salary, overtime, bonus, 401k, stock options, etc. are all part of the "total compensation" package. It is also important to consider that while companies understand that money is important, they will seek a candidate’s decision based on the overall job challenge, expected career path and career development - and not on an immediate boost in pay. For that reason, most organizations will shy away from providing sharp increases when presenting an offer. It is reasonable to expect an increase in earnings, but it will be up to YOU to bring yourself to market level by performing.

When consulting with your LTS Recruiter, it is imperative that you are completely upfront and honest about your current earnings. Companies do perform salary verifications before extending an offer of employment, so exaggerating or inflating your earnings in an attempt to posture or achieve a higher offer will result in immediate disqualification.

(2). What the market will bear.

In a good, healthy economic market, we traditionally see 8-10% increases. Given the tight job market and economic climate over the last 2-3 years, we have seen increases that average between 5-8%. Many candidates are willing to accept lateral moves, or even a decrease in pay for an opportunity to remain employed. Unfortunately, we have seen mass-layoffs and unemployment impact many large firms and vendors - even in our highly specialized industry of eDiscovery and Litigation Support.

This means that if you are earning $100,000 currently, and economic conditions are good, it is reasonable to expect an earnings increase between $108,000 - $110,000 in your next career move. If the economic climate is not prospering, it is reasonable to expect an increase of $105,000 - $108,000.

(3). How well YOU perform on the interview.

This is the most component to determining what amount of income a future employer will offer you. If you absolutely 'knock their socks off' in the interview, the management team will often go above and beyond to bring you onboard.  It all really depends on how well you "sell" yourself on the interview.

Our recommendation is always to explore the opportunity first before looking at the dollars. Don't base whether or not you will explore an opportunity purely on the money. There are plenty of jobs out there that pay good money, but there is no challenge, no room for growth, no fulfillment. Remember; chase the opportunity, not the cash.

Consider the Whole Picture.

Exempt –vs– Non-Exempt:

 It is important to consider whether the position you are exploring is exempt (not eligible for overtime pay) or non-exempt (is eligible for overtime pay), as this can dramatically impact your total take-home pay.

Given the cyclical nature of the eDiscovery and Litigation Support industry, working late hours and weekends are not uncommon. If you are being compensated for your overtime hours, this will make a significant impact on your paycheck.

Consider these two scenarios:

  • Employee #1: Earning a base salary of $100,000, exempt. (Hourly rate of $48.07, no overtime eligibility)
  • Employee #2: Earning a base salary of $92,000, non-exempt. (Hourly rate of $44.23, with an overtime rate of $66.34)

If both employees work 5 hours of overtime every week (1 hour/day), who really earns more money?

  • Employee #1 earns a base salary of $100,000 – but is not paid for extra hours worked.
  • Employee #2 earns $66.23 for every hour of overtime worked. Using our scenario, that adds up to $17,250 in extra income per year. So, the individual earning a LOWER base salary of $92,000, non-exempt – actually takes home MORE money – a total of $109,250 per year!

As there are some benefits to non-exempt positions, there are also benefits to exempt position. Most managerial positions are exempt, so if your career goal is to advancement into a Litigation Support Management position someday, recognize that doing so may mean sacrificing that nice overtime paycheck.

Location and Cost of Living Play a Pivotal Role.

Traditionally, a position based in major metropolitan city where the cost of living is higher will pay more than that same position in a rural area, or where the cost of living is lower. You will want to weigh the pros and cons to both options.

  • Perhaps accepting a position in a smaller town will mean accepting a lower salary, however since the cost of living is so low, you can afford that 4 bedroom ranch-style home on 2 acres of land.
  • Conversely, if you’re coming from rural Texas, don’t expect to find that same 4 bedroom ranch-style home if you are moving to downtown San Francisco or midtown Manhattan.

You must recognize that in making a location change, you are also making a lifestyle change and may be trading certain luxuries for other benefits.

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