Are You Underpaid?
Are you making as much money as you should be?
If you've been pondering this question, you're not alone. A 2006 survey by staffing services company Randstad USA and Harris Interactive found that 39 percent of employees surveyed believe their salary is lower than market rates, up from 28 percent surveyed in 2005. Meanwhile, 50 percent of employers think the salaries they offer are on par with the marketplace, up from 42 percent in 2005.
So how do you figure out if you're really underpaid? Here are six steps to help you determine whether you're getting what you're worth.
Use the Tools
Several resources let you see how your pay stacks up. For example, our Salary Wizard can give you a general idea of where you stand. The Personal Salary Report provides information based on company size (larger employers tend to pay more), experience, advanced degrees, location, specific industry and other factors.
In addition, most trade associations conduct salary surveys, which tend to go into greater detail for your specific occupation.
Keep One Foot in the Job Market
"The best way to know your value is to be on the market" -- even if you aren't looking for another job, says Lee E. Miller, author of Get More Money on Your Next Job. You'll get an idea of which skills are valued, what other employers are offering and where your company stands as well as make valuable contacts. And if the offer's good, you might want to change jobs after all -- or use the offer to negotiate a raise where you are.
Get Friendly with Recruiters
Recruiters are some of the best sources of information about the job market, especially if they specialize in your industry. Since they're working with employers, they know exactly what price range companies can offer as well as the skills they're looking for.
But you generally need to build a relationship with the recruiter first, which means helping them out even if you aren't looking for a new job yourself. "If you give them the name of someone who might be interested, then recruiters will call you, because you've become a good source of information for them, and they'll be more likely to share more information with you," Miller says.
Talk with Your Predecessor
It may be awkward, but try to talk with the person you're replacing. Even if he isn't willing to reveal his salary, you may still get some good insight into how fairly he thought he was being paid, especially if he just completed a job search and switched to another employer.
"You always ask to talk with your predecessor, whether or not they are still with the company," says Emory Mulling, chairman of outplacement and executive coaching firm The Mulling Corp. "If the company doesn't want to give out the name of the predecessor, that's a message."
Recall Your Hiring Circumstances
Did you accept the first offer? That could be a red flag. "Rarely will recruiters make their best offer as their first offer," Miller says. "They expect job candidates to negotiate." And remember: You can negotiate salary, benefits, a signing bonus, equity or a flexible schedule.
Network through your professional association, and talk with people who work or worked with the company to find out which strategy likely will be most successful -- some companies are known for higher-than-average pay, while others may not have extra cash but will negotiate on flexibility.
Miller also recommends asking about training, which tends to be important long-term. "That increases your value in the future," he says.
Is Pay Really the Issue?
Finally, step back and examine why you feel you're underpaid. Sometimes the issue goes beyond money. "One of the reasons some people feel like they're underpaid is if there's too much personal cost to what you're doing," says Karen Wright, president of Parachute Executive Coaching. "If you're doing the completely wrong thing, no matter how much you're being paid, it's never truly going to be enough."
Wright recommends thinking about what will make you happier. It may be more money, but it may also be a shorter commute, flexible hours, a less-stressful company or a different boss. It helps to know you're being paid fairly, but you'll be a lot less worried and resentful if you actually like your job.