In my last article we talked about finding out what your skills and job are worth in the employment marketplace.
Some of you may have been unfortunately surprised to learn that you are underpaid by your employer. Or at least have a pretty good hunch that you are underpaid, depending on which methods you used to gather your salary information.
If that’s you, what do you do? Should you up and quit your job? Not likely — making a rash move in an uncertain economy is unwise. But you shouldn’t sit back either.
What Should I Do If I am Underpaid?
Here are several methods of dealing with the discovery that your employer hasn’t been paying you enough.
Verify Your Market Value
Unless there is a reason you deserve higher-than-average pay, you generally want to ask for a raise because you’re being paid less than other people doing the same job. To do that, you need to find your “market value.” This is what you would be paid, generally speaking, if you worked the same job at another company. There are a couple of ways we can figure this out.
The first method is by comparing your salary to your peers. This can be tricky, as not everyone wants to discuss salary, and some employers either forbid or discourage the practice. I don’t recommend it unless you have a close friend. However, be aware that discussing salary with your peers could lead to bad feelings. So tread carefully.
The next method is easier. You can compare salary data collected by a variety of third party sources. Some of the sites I have visited are salary.com, payscale.com, and vault.com. You can also use a site such as GetRaised, which uses a mashup of many data sources to show people whether or not they are underpaid. If you’d rather do it yourself, your first stop should be the Bureau of Labor Statistics’ Occupational Employment Statistics, which uses national survey data to tell you how much people in your industry and area make. The website is a bit difficult to use, but the data is in there, I promise.
You should also check local job listings and salaries in your area using Indeed.com and SimplyHired.com. If there are open jobs that are listed with salaries higher than what you currently make, and you’re qualified for those job listings, it’s great evidence that you can use to request a reasonable raise.
Consider Your Full Compensation Package
Before you walk into your boss’ office to throw a hastily put together resignation letter, take a deep breath.
Now that you’ve done that be sure to consider your full compensation package.
Here’s the deal: no two jobs are paid the same. If you find out that your friend’s co-worker doing the same job you do at another employer is making $15,000 more per year than you, you are probably incensed. But what you may not know is whether or not that employee gets the four weeks vacation you get, or if he spends $300 more per month on his benefits than you, or if he doesn’t get the 5% bonus deposited into his 401k account. In some cases that employee may not even be paid as a W2 employee — meaning they are being paid 1099 wages and having to pay a lot of that income in tax.
Try to gauge the full situation before doing anything hasty.
Consider Your Work Environment
Similar to comparing full compensation packages, also consider the work environment. What your friend may not be telling you is his buddy is well paid because the manager of that group is terrible to work for. Or maybe the entire company works in an ugly industry that has a hard time attracting quality employees.
Meanwhile your boss may know your entire family, you go to happy hour a lot, and get to wear shorts and flip flops around the office. Maybe you have the option to telecommute once a week, or whenever there is inclement weather.
Work environment is definitely a tangible benefit. It can be hard to put a number on it, but sometimes being happy while making less is better than being paid more to work at a job you hate.
Ask for a Raise
First, you can’t just walk into your supervisor’s office and ask for a raise. They’ll be caught off guard and probably a little irritated that you didn’t let them prepare for the conversation. You can imagine what that does for your chances of getting the raise.
Instead, take the salary research you did to verify you are underpaid. Then make a list of your work achievements and value added to the company. Set a meeting with your boss to discuss what you’ve done and what goals you have moving forward to assisting the organization. Come at the conversation from a value standpoint rather than a pricing standpoint. Also understand that some organizations only give raises during certain times of they year. It can be beneficial to put the bug in your manager’s ear before the raise or promotion cycle starts, that way you have already let them know your value to the company.
This meeting is your opportunity to run through your highlight reel with your boss—your chance to build your case with hard, supporting evidence. If you’re doing more work than before, prove it. If you’ve taken on new leadership roles, won new business, or helped the company increase revenue, describe to your boss exactly how. If you’ve expanded your skill-set with new certifications, continuing education, or industry awards, point to them. Bottom line, you want to build a logical case that will help your boss arrive at a logical decision. Organizing your recent accomplishments and achievements will help make that happen.
Just as important as what you’ve done, you’ll want to map out what you’ll do. Identify a handful of short- and long-term goals. Perhaps you’d like to take on a managerial role in the next year. Or maybe you’d like to spearhead your company’s floundering social media presence. Perhaps you’ve got a target revenue generation figure in mind. Show your boss that you have concrete goals that benefit both you and the company and you’ll undoubtedly help your case for a raise.
The Details of Asking for a Raise
So much of the raise request is in the details—how to best approach your boss, figuring out your appearance on the day of your meeting, and how you can prepare to negotiate are all worth thinking about. Here are a few details worth remembering:
- Know Your Boss’s Calendar – If your boss is heading out of town for a week of business travel, you don’t want to make your raise request a day before he or she leaves. Similarly, if you know mornings are hectic for you boss, approach the conversation in the afternoon.
- Look Sharp – While a raise request isn’t an interview, you should think of it as one. On the day of your raise request meeting, step up your attire a notch. And be sure to keep comfort in mind – nothing’s worse than a too-tight collar or an ill-fitting blouse when you’re making your case.
- Understand Your Company – Do you know when your company plans the annual budget? If you’re pursuing a raise, you should. Once the budget has been divided, your boss may not have any wiggle room to give you a raise even if he or she absolutely wants to. Do you know your industry’s peak season? Again, valuable information. Picture an accountant asking for a raise in early April. Probably not a prime time to do so. Don’t make your request when things are crazy at work. Nor should you do it during the down season (if applicable). Make your request when things are clipping along at a good, solid pace.
Sometimes the Only Way to Increase Your Salary is to Find a New Job
Unfortunately, sometimes talking to your boss won’t lead to you being paid a fair wage in the future. Maybe the company is on a salary freeze or your boss doesn’t like you. If you decide is time to make a move, don’t do it halfhearted. The best time to find a new job is when you already have one. But you need to be careful about how you do it. Your work performance will visibly suffer when you have one foot out the door. (And yes, your boss and co-workers will notice you seem to be wearing more suits and taking “late lunches”.)
Finding out you are underpaid can be extremely frustrating. Verify your data first and consider other factors that might influence your salary. If you love your job but determine you need a raise, ask for one in the most professional manner possible. If that doesn’t work, it is time to hit the streets looking for your next career step.