Give Yourself a Raise

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At the height of dotcom mania, a lot of folks found it easy to hold up the boss for a raise. “Give me what I’m worth or I’ll pack up my family pictures and head to BigDreams.com,” went the threat. It worked for a while. Then BigDreams.com went bust, the economy went with it, and working stiffs have been pining for the glory days of easy job-hopping and fat pay hikes ever since. Are those days coming back?

Increasingly, it looks that way. The last half-decade has been punishing for job seekers, and industries like media, airlines and autos won’t exactly brim with openings for many years to come. But things are looking up in other areas. Jobless claims this week hit their lowest level in six years. The unemployment rate has nudged below 5%—a robust reading—and the pace of corporate job cuts has been shrinking for six months.

Fret all you want about rising energy costs and a housing slowdown. Yes, both are drags on the economy, which appears to be slowing. But oil and gas reserves are building; their prices will stablize soon. Housing activity will continue to slow—but from a pace that everyone knew was unsustainable. The national median home price rose a blistering 13% last year. The next three years, predicts Doug Duncan, chief economist at the Mortgage Banker’s Association, price gains will equal their long-run average of 5% to 6% each year.

That isn’t bad. Meanwhile, headhunters report soaring demand for accountants, engineers, financial planners, physical therapists, computer support specialists, advertising executives, real estate professionals and sales and marketing managers—especially, for that last group, those with international experience. “The pendulum has swung back in favor of workers,” says Richard Bayer, chief operating officer of the Five O’Clock Club, an outplacement service based in New York. His typical client today lands a job offer in under 10 weeks, versus more than 13 weeks the past few years.

The Labor Department expects two million new jobs this year on top of the 1.7 million created last year. Helping to fuel what could be the hottest job market so far in the 21st century: massive rebuilding on the Gulf Coast and stepped-up gas and oil exploration and drilling amid higher energy prices.

So this shapes up as a good time to dust off your resume. And when you do, remember that the game has changed. The old deal was that your company paid you a decent, but not great, wage through thick and thin. You didn’t get rich; you didn’t get fired. But now even profitable companies shed long-time employees at the first whiff of trouble. “Think like a free agent,” says John Challenger, who runs outplacement firm Challenger Grey & Christmas. “You need to be able to dump your company before it dumps you.” When companies are hungry for talent, as many are today, you can drive your hardest bargain. Negotiate stock options and performance bonuses, or work on commission. Don’t be shy. After all, if your job may disappear in the next downturn it’s only fair that your pay be hinged to today’s healthy profits.

This is also a great time to start your own business or take a flyer with a small firm, where you have the best shot at negotiating equity, a bonus or, say, flex-time if that’s important to you. If it doesn’t work out, you can always go back to the big company (they’re hiring, remember?). It’s time to rediscover your worth. Some employers already have.