Tag Archives: salary

Are you underpaid?

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.

What the companies are really willing to pay you

You have interviewed with five people at the company. Your references have been checked. The background and drug checks came in clean. Your recruiter has more negotiating skills in his pinky than the whole management chain in that company put together. Now to see how much money you will be paid for the job. 

There is an upper limit you won’t get past. It may be the first offer you hear. It may be reached after a week of haggling. There absolutely is an upper limit. The best negotiator cannot get you more money than that limit. That limit was more than 50% more than the listed salary range for one position I’ve seen. But there is still a limit.

What are the factors that set the limit?

  • The company’s finances
  • The other people available for the job
  • Your resume
  • Your interview

That’s it. The first two are very complex, but you can’t do anything about them. The last two are closely related. Your resume and your interview work together to show possibilities. They show how you might affect company finances. They allow you to be compared to those other people.

The next two blog posts will deal with what information you need to get to your future bosses, and how to radically increase your interview effectiveness. They are about how to get that 10% more.

Something to do today

Make a list of the topics covered in your last job interview. Tomorrow we’ll see if you covered the most important information.

The salary question is illegal in MA

MA just passed a law making it illegal to ask your current or past salary before they have made you a job offer!

Here is the article.

I have to admit, I did not see that one coming.

Salary toys

It’s not how much you make, it’s….  okay, so it is how much you make.

Have some fun and compare what you make to the rest of the world.  It can be an eye opener when you play with minor variations in titles.

www.careerjournal.com  is a great place to go looking for good jobs. Monster and CareerBuilder are fine too.

Then go to www.salary.com and find the range of salaries for that job.  They have neat graphs that show you the range of salaries and what percentage of people get the high or low salary.

Add Senior or Chief to your title and see what that earns you.

www.homefair.com/homefair/calc/salcalc.html will help you compare the salary and cost of living in different locations.

Have fun.  If you don’t like what you see, figure out how to fix it.  If you are overpaid, figure out if you are worth it.

Something to do today

Have some fun with salary toys.


Coming up

Working for the Fortune 50

Scrabble and muck and get ahead

When to give up and go elsewhere

How to be ruined or win with the money question

Alice came in and told us she wanted $110,000 per year minimum or she wouldn’t even consider another job.  We tried to get her to be reasonable.  Because of her previous salary, $95,000 or less was much more reasonable. As recruiters we decided to send her anyway.  When it got to negotiations the company was not willing to go anywhere near $110,000.  We called Alice and told her to forget it.  She panicked, “What do you mean you turned them down for me?  I would gladly take $92,000.  What were you thinking?”

We were thinking exactly what she told us.  Therein lies the problem when you are looking for a job:

Ask for too little and they will pay you too little. Ask too much and they might not even make you an offer.

Alice was lucky on two counts, first that we let her interview for the job, and second that the company made any offer at all.

How to win (or not lose) on the money question

Be honest with your recruiter.  Tell him the truth so he can negotiate for you. If you change your mind up or down, tell him immediately.  Give him a chance to negotiate for you in good faith.

Give the employer a sandwich.  Soft bread slices with meat in-between.  The soft bread on each side of the meat is a compliment on their company and job.  The meat is to tell them what you have made in the past. Tell them the facts.

Try saying, “I really like this company and job.  I would love to work for you.  In my last job I earned $58,000 last year.  I certainly would not want to work for less.  What I would like is to be able to entertain your best offer.  I certainly want to work for you.” Did you notice the bread, meat, bread lines?

Then let them go back and discuss what to offer you.

Telling people the truth is the way to get the best offer.  Tell them what they need to hear, not necessarily what they ask.

Something to do today

Try to figure out what other people are making at your same job.  It can be a real eye opener.  I have seen people paid half of what they should be earning sho are happy as clams.  Others earning 20% more than anyone else in a similar job feel underpaid.


Later:          I refuse to say what I get paid

3 kinds of death

20 second interview prime time

5 soft skills that mean big bucks for technical folks

You can separate yourself from the rest of the technical herd with these 5 skills.  They really are the biggest differentiator in salary outside of raw technical prowess.

Read more….

How to answer “What do we have to pay you?”

Never…ever suggest they don’t have to pay you.  What they pay for, they’ll value.  What they get for free, they’ll take for granted, and then demand as a right.  Hold them up for all the market will bear.  (Lois Bujold)

” How much less than $55,000 will you take as a base salary?”

You probably won’t be asked that particular question. It is brutally bad.

Employers hate to ask any money question.  It isn’t polite.  But, you and the employer need to be in the same salary ballpark. Wouldn’t you feel upset if after 3 interviews over a period of a month you were offered a salary of half of what you are willing to take?

What makes the money question worse is that you cannot give a solid answer and win.  If you give a number too high, they may refuse to continue the interviews.  If you give a number too low, they’ll pay that low number and not a higher one you could have gotten.

There is only one way to answer the question.  Start out with a compliment. Let them know where you are now.  Finally, tell them you want to hear their best offer.  Here’s an example:

“How much do we have to pay you?”

“I like this company.  The opportunity is just what I am looking forward to.  The team is a real winner too.  I currently earn a $63,000 base plus a bonus of $2500 last year.  I certainly wouldn’t want to earn less.  What I would like is to be able to entertain your best offer.”

This answer gives them information to work with.  It is not a refusal.  The heartfelt compliments at the start make them feel good.  You tell them what your baseline for comparison is.  Finally you give them a chance to be generous.

One final note: Don’t bring up money, benefits, vacation or “what’s in it for me” in the first interview.  Even the second interview is often the wrong place.  After they have decided to hire you is the best time to discuss money.  At that point they will feel a real loss if you decide their offer is too low.

Something To Do Today

Most people cannot clearly state what they earn.  I don’t know why.  Before you go on an interview write down the clearest way you can state your current earnings.  Then practice answering “the money question”.

How much do we have to pay you?

Lack of money is no obstacle.  Lack of an idea is an obstacle. (Hakuta)

It’s your first interview.  Things are going well.  The wall clock says you’ve been here 45 minutes.  That’s good.  Then the hirer sits back in his chair and asks, “How much do we have to pay you?”

This can be a disaster.  If you come up with too big of a number, they won’t hire you.  If the number is too small you won’t earn as much as you could.  Is there any way to win?

Your answer needs to show a great attitude.  It can’t sound like you are greedy.  It must leave the door open for negotiations.  It has to get you a job offer so you can really start negotiating. Try this:

I really like the opportunity you have described to me.  This is a great company.  I would love to come to work for you.  In my last job I earned (amount), I certainly wouldn’t want to work for less.  What I would like… is to be able to entertain your best offer.

Show them your attitude first.  Let them know you like the company and the job.  Give them the historical fact of what you last earned.  Then defuse the question by saying you want to see their best offer.

This line works.  Most of the time they’ll stop asking you for a number. If they ask you again, repeat the line. Eventually you’ll be negotiating wages, but try to put it off until they really want to make you an offer.

Use the money question to show your attitude.  You’ll get more job offers. You’ll also make more money.

Something To Do Today

Put this question and answer down in your interview preparation notes.  Practice saying it five times before every phone interview or in-person interview.