I got a call from three business analysts from one international company in the same month. Each of them wanted to leave. The first thing cited was their low salary. When I said, “You can get a different job, but you will have to take at least a $10,000 per year pay cut,” they backed off. It was the awful truth. Each one of them had golden handcuffs. They were earning at least 15% more than any other local business would pay them. Of course the problem wasn’t their low pay, the problem was the unpaid overtime they were putting in. At least they thought it was unpaid overtime until they found out the pay cut they would have to take to move elsewhere.
Contract employees often tell me, “I want a salaried job, but I’m not going to accept less than I’m earning now.” They want to stop traveling, have health insurance, a generous training allowance, and get into a secure job with a future in one company. Yet, they want to be paid the same as when they had none of those things. Contract employees often earn twice what a salaried employee earns. It is for the simple fact that contractors have to take care of themselves.
Certainly some are vastly underpaid. I had one friend, Joe, who went from $35,000 per year to $50,000 per year in one salary jump because he was underpaid. Yes, it happens. More often employees are within 5% of the market rate for their job. If an employer pays less, they start losing people. Either they raise salaries or I come in and steal all of their best people. Then they are left with a bunch of really poor employees and maybe one great person who hasn’t found out yet. When that great employee leaves, the company may go out of business.
To find out if you are really underpaid, first look at your performance. Only superstars get superstar salaries. If you are just average, you should expect average wages. If you are below average, your wages will be lower.
Now do what Joe did, ask your coworkers how much they are paid, if you can. Joe didn’t do it for 5 years. When he finally asked, he asked workers he knew were lower rated than he was. When he found they were all earning more than he was, he had a right to get mad and get it fixed.
You can also look in the employment ads. Just remember that ads lie. A range of $50,000 to $60,000 does not mean you magically qualify for the high end. It means if you are a superstar you may hit the high end. It means an average worker will get the bottom number. A poor worker will not get hired.
Next, put together your resume and send it to a recruiter who specializes in placing folks like you. Ask for an honest opinion, “Can I expect a raise going to my next job?” Follow that up with, “How is my current pay compared to others doing the same job?” If the recruiter gasps and says, “I will have you three interviews tomorrow,” you are drastically underpaid. If he says, “It will take a while, but I may be able to find you a job,” your pay is within 5% of the norm or possibly high.
The ways to find out if you REALLY are underpaid are:
- Ask coworkers rated lower than you are, “What do they pay you?”
- Look at job ads.
- Get a great resume to a recruiter and see how he reacts.
Find out where you stand, but be prepared for the “bad news” that you are paid about what you should be paid. If you get the “bad news”, fix it. Do the better work that will get you a raise, or get a job with a brighter future.
Folks who never do any more than they are paid for, never get paid more than they do. (Elbert Hubbard)
Something to do today
Do you have the guts to find out if you are being paid fairly? Then do it.