(MoneyWatch) On the surface, you'd think salaried, "exempt" employees should be the first out the door at 5 p.m.. After all, their paychecks don't get bigger when they work longer hours, right? And in the short term, that's true. In the long term, however, those extra hours can make the difference when your boss is figuring out your raise for the next year.
A new study by Dora Gicheva, an assistant professor of economics at The University of North Carolina at Greensboro, shows that once an exempt employee puts in 47 hours per week, every additional five hours of work per week pays off with an average 1 percent in annual wage growth.
Gicheva notes that this correlation is especially strong for young professionals. Meanwhile, people who put in less than 47 hours but still work more than other people do not see their pay benefit. In other words, working 25 hours a week isn't likely to get you a 1 percent raise above your colleagues who put in 20 hours a week.
Because this relationship between hours worked and pay appears especially strong in those newest to the work force, it demonstrates the importance of jumping in with both feet and working extra hard those first few years. Just like people who leave over $1,000,000 on the table when they fail to negotiate salaries, those who prefer the perks of flexibility and fewer hours at the beginning of their careers may well be throwing away large amounts in potential earnings over the year.
These findings also help to explain the wage gap between men and women. Young women who work full time make more money than their male peers, according to some reports, but men pass their female coworkers as they have children and cut their working hours.
Does this mean that bosses are simply rewarding "butt in seat time" rather than actual performance? Not necessarily. The reality is that more time working means that, at least in principle, more can be accomplished. Not to say that there may not be benefits to working less, such as a fuller family life and avoiding burnout.Still, Gicheva's findings suggest, at least at the start of your career, putting in more time at the office can help you climb the salary ladder more quickly and lead to higher pay. Meanwhile, since future salaries are often calculated based on present ones, each time you get an increase, your base jumps. So the payoff multiplies as your career progresses.
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