A reader may be underpaid but doesn’t really know. Let’s explore how to find out in the August 25, 2020 Ask The Headhunter Newsletter.

Question

underpaidI want to change jobs because I suspect I’m underpaid. I’ve been looking at Glassdoor and other salary surveys. Are they accurate? How can I find out what salary I should expect from a new job, so that I can figure out if I am currently underpaid, as I contend, or if I should stop my whining?

Nick’s Reply

We live and work in a quasi-capitalist environment. For the most part, the market determines value. So put yourself on the block and see what kinds of bids you get. Seriously.

Do surveys say you’re underpaid?

Salary surveys are usually either out of date, or they are naturally biased toward the mean. That is, they survey people who want to be surveyed and they emphasize the value of the average worker. They’re not good at explaining why people on the leading edge of the curve are paid what they are paid. (See Glassdoor Salary Data: Worse than useless.)

Trying to look up a job title that fits you in a salary survey is like trying to find a job ad that matches you exactly. You’re not likely to learn much about your individual worth from either.

Surveys don’t predict individual value

You don’t say what work you do or what industry you’re in, but you seem to suggest salaries in your field are increasing while yours is not. Does it matter? Does it mean you will get a bigger raise or a bump in salary to change jobs? Asking me what you’re worth is as good as consulting the salary oracles — not very! While a survey may be useful in understanding trends, it does not predict salary for any individual. That means you.

Short of putting yourself on the block, I think the next best way to get an idea of your value in the market is to talk to real, live people in your field.

Ask your peers

Get the information you seek straight from the horse’s mouth. Meet these people through professional associations, at industry meetings, through industry publications and at training courses outside your company — and, of course, in relevant online professional communities. In other words, discuss compensation issues directly with people who are not under your company’s control so you can form a better picture of what your compensation could look like.

(I am not suggesting blasting messages to 50 people with your job title on LinkedIn and asking how much they earn. I prefer venues where you’ll have to earn your reputation and credentials before you’ll get any really useful information.)

Of course, some people won’t discuss their own salaries, but I find in general that people will talk about compensation in their field and share what they know about it. You’re far better off talking with others who do the kind of work you do simply because such dialogue is far richer than reviewing cold numbers from a survey.

If you’re not participating in your professional community this way, you’re making a big mistake. These are the folks who can help you figure out the value question, and perhaps help you find your next job. Don’t whine. Go mix it up with your peers!

This is a good exercise for all of us. We can’t ask questions of a data point on a salary survey. But we can ask one another.

How does anyone figure out what they’re worth? How do you figure it out? Does it change the way you handle your career? What advice would you give this reader about whether they’re underpaid?

: :

Share
19 Comments
  1. The best way to find out salary ranges is to join a professional organization. The professional organization has most likely salary ranges for jobs within the profession. I would also find out if employers share salary information with each other. The link is an article from “Wired” about Silicon Valley’s exclusive salary database, Option Impact. https://www.wired.com/story/silicon-valleys-exclusive-salary-database/

  2. This is touchy…but a good start is trying to learn…if not out in the open… what your company’s pay ranges are…or if they even have a range structure. I doubt people will tell you what their own pay is…but finding pay ranges per job classifications is useful information. You can then see where you are in the range. lower, middle, upper. This can be a particularly touchy area as some companies make it their personal internal felony to share compensation info. Which should be a red flag.

    Who can you ask? Your boss. HR. They know, or should. If your boss is unwilling, red flag. If he/she says they don’t know..Big red flag especially if your vibes tell you they aren’t lying. The reason they are red flags is in my experience when a company has a truly competitive pay policy…trust me they let that be known. Pay ranges can be strategic policy. That is, a company can strategically decide to pay top of the market, which means if you want to leave..and remain local..you may find yourself priced out of the local market..sort of a golden hand cuff. So if they won’t tell you your pay range..and where you sit in it..you’ve got much of your answer.

    A good source of info is former employees, preferably former co-workers who you know. Having left & gone elsewhere they can give you useful insights, as they’ve been down this road & are in position to share a comparison(s) if they are so willing.

    As to so-willing..be willing to share your comp if you want solid information…next best an approximation. If you want info, be prepared to give info

    Outside your company do some networking, especially in the HR community..especially comp & benefit specialists, in your area. They’ll likely know useful info, but likely rely on surveys..but they’ll have a good take on the validity of the surveys.

    I was spoiled in one company. Never saw it again. They were totally transparent. to the point HR gave everyone a wallet sized card with the pay ranges for your profession. Managers used it for recruiting, career discussions etc. Everyone knew exactly where they stood. It was stopped when we realized competitors loved it better.

    And of course, the military’s got it down. Enlisted people wear their comp on their sleeves and officers on their collars.

    • @Don: Great points. I think the lesson is that you’ll get the best salary information by talking to people. Surveys are a starting point, but nothing more. And I agree that companies need to be as open with salary info as they expect candidates to be. What’s the big secret?

      I don’t buy the argument that “compensation is our competitive secret.” Tell everybody. Will other companies then jack up their offers? Go on ahead. You can see this is self-limiting. Companies will go so far, then offers will become realistic. All this secrecy about salaries flies in the face of HR telling us to be honest on those application forms and in interviews. What’s good for the goose…

      Last point: No matter what you calculate your value to be, you still need to know (a) what the $$ constraints are for the employer, which they usually hide (that’s nuts), and (b) how flexible the employer is when it wants to hire the very best. Like Don suggests, talk with former (recent) employees.

      • I agree on the competitive argument. If I recall that was the answer I got to “what happened to the cards?”
        I’m sure you can imagine how transparency on salary ranges made recruiting, growth planning & even retention, so much easier.

        We’d without any BS, coyness, hesitation and other stalling tactics just matter of factly brief a candidate on their range & where they’d enter it (and why). Then if they visited a competitor who’d go into top secret mode…we’d do very well.

        I’d still have the info & show it, but there was something about that little card, that every employee was given, that sent a message.

        No one likes to operate in a vacuum.

  3. Consider looking at job listings for your position with roughly your experience required. Depending on your field you should be able to find listings that include a salary expectation. This will just get you an approximate feel of course, since that number is often negotiable based on all sorts of thing, but it’s a better way to gauge your local market numbers than a salary survey for a lot of fields.

    • I’d love to know how often readers find job postings that actually include salary ranges.

      • Never! I have yet to see any job postings that include salary ranges. The postings will say “salary commensurate with experience” or something like that, and if you ask for the range (so you don’t waste your applying for a job you can’t afford to take because the salary is too low), you get “we never discuss salary with applicants”. Whyever not? Surely salary (and benefits) is of perennial interest, everyone is an adult, and salary matters. Most people don’t work because they have nothing else to they’d rather be doing.

        I’ve seen some job posting that will list a salary, but not in a way you can find out. It will say “level 27” and then you can’t find what level 27 translates into dollars. I called one employer to ask about it, and was told that the only way I could access that information was if I worked there, and no, I was told that they never disclosed it to people who didn’t work there.

        What a nutty system.

        • @Marybeth: Imagine going to a restaurant and being told you have to order food and give them your credit card before they’ll tell you the cost of each dish. That’s a bit of a warped analogy, but I think it makes the point. A nutty system indeed! Then they have the gall to insist on knowing your current/last salary!

  4. Be sure to take in to account benefits.

    A good benefits package can make up for quite a bit of salary.

    Also take in to account the intangible benefits. A low-friction work environment, work from home, flexibility of schedule…these can also be valuable.

  5. One. What I used to do when I was employed full-time was the book at the cars in the parking lot, and check out the addresses of the employees and especially of the managers and owners.You can extrapolate income from these. Paragraph 2, Look at the cost of housing and other things I want in my have for myself and figure out what income I needed to acquire those. If I wasn’t making enough money, and be not entirely unreasonable, I’d ask for the higher money. One thing everybody must remember is that cash is not a scarce commodityt. Just look at what the owners and managers are making. I used to work at a company where many years ago I was being paid $800 a month. My immediate two levels of MGR lived in a very ritzy neighborhood where they had to be making $2,500 a month to live there. I talked to management and when they would not increase my salary I quit. Just as an aside, three companies where I quit, within 6 to 12 months the come pee was out of business. That gives some indication that I was worth more. Three. These are just a few suggestions, but you really have the guts to do it. As I said above, that money is NOT scarce. Management and owners pretended that money is scarecrow, except of course in their case. 4. Another thing I would do, when I interviewed and the offer was not what it should have been, is I would ask the question: Are you offering me this lower salary because you actually don’t have the money or is it because your company Philosophy is to be very cheap with your employees. I would then tell them if they are offering such a very out of range salary because they truly did not have the money, then that’s all the more reason they need to hire me at an even higher salary because what I do is produce income. On the other hand, if their company Philosophy is to treat their employees badly,I would actually use the word cheat then, I don’t want to even be talking to them. It takes guts but what do you really have to lose?? If you are going to be cheated you dang well must be made aware of that upfront and not down the road a year or two when you’ve given up money that you can never retrieve.

    • @Wes: You just made my day. That’s some of the best, most blunt, in-your-face advice I’ve heard.

      This is key: “As I said above, that money is NOT scarce. Management and owners pretended that money is scarecrow, except of course in their case.”

      If that seems far-fetched to anyone, please read this, then ask the employer what its CEO-to-median-pay ratio is:

      https://www.asktheheadhunter.com/13359/dirty-salary-secrets-revealed

      As you point out, if money IS scarce at a company, why do you want to work there, unless they’re offering you a premium to turn it around for them?

  6. Socrates said, “know thy measure”.
    A good question to ask is “what am I worth to this company”. Are you a rockstar or slug or somewhere in the middle? This shouldn’t be too hard to figure out.

    • @Tony: You’re taking the covers off a dirty little secret. Most people have no idea and will not go to the effort to figure out what they are worth to a specific company. Is it because they’re lazy, or because the employment system lulls them into thinking “employers will figure it out for you!” when they make you an offer. That’s quite the great deal (and negotiating edge) for employers, eh?

      Imagine showing up at a classic-cars auto auction with your cherry 1963 Corvette. You never figured out for yourself what it’s worth to a collector, so you’re thrilled when it goes for $2,500.

  7. What an outstanding article! And on a very touchy and highly-charged subject.

    Informational interviewing is perhaps one of the best ways of finding out what positions pay.

    We meet with people who supervise / manage the position we’re interested in (and the next level above them) and simply ask. After about 5-10 or so interviews, we should have a very accurate picture of a realistic salary.

    The wrong way: “So, can you tell me how much you make here?” or “What could I earn in this position at this organization?” or “What does a (job title) earn at this organization?”

    The right (or at least a better) way: “What do you think a person with my skills and experience might expect to earn in an organization similar to this?”

    And of course, along with finding out salary levels, the informational meeting is also leading you toward those job openings in what is often referred to as the “hidden job market.”

  8. Given the COVID environment keeps dragging on, and on, and on, it is likely fools gold attempting to peg down a solid figure of what you MAY be worth.

    Similar to the Great Recession, the job market is currently in constant flux. Many of the mainstream job seekers out there will be struggling with an employers market much less harping on salary issues. Some jobs are never coming back, others are already loaded up with more duties, and those that still have their job may wish to put the “I deserve more $$$” on the back burner.

    It’s all about timing. The only thing regarding salaries that is dependable right now is that fact that there WILL be change.

    Oh, and unions won’t be able to save you. Just ask airline employees how they’re doing right now. An entire regional airline that was in business for decades was wiped off the map overnight. Several major airlines are looking to furlough up to ten years worth of seniority.

    The new normal is forcing people to up their game by providing value-value-value beyond pre-COVID days, not petitioning for more $$$$. I would suspect maybe a few companies are looking to blow cash flow on raises during this economic mess which puts them on the fringe of the national wage bell curve. For the rest of us, overall, wages will be stagnant with possible pay CUTS on the horizon. Want to whine about it? Ha! Plenty of warm bodies to take your place – NEXT!

    Salary surveys are simply estimates and right now, with COVID fears still running wild, they are likely pie-in-the-sky dreams for many listed job titles.

    As of summer 2020, I’d be putting all my effort into adding more value. Then, maybe, sometime in 2021 after assessing the economy, a particular industry, and the company itself, would I then even think about bringing up $$$$.

  9. What I left out before is that I always examine a company and a particular position to best determine what my particular skills will not can, add to company profits. This does not work for ancillary positions such as secretarial, clerical, etc. for professional positions, I look for where my skills will add profit, how much profit, over what time period, and how clearly discernable my specific, individual profit contribution will be.

    As an example from Ohio State University, while earning my MBA, the capstone class had us meet as a class, with three owners or high up executive of local forms. one was a saw blade company. the owner claimed to have no problems. none at all. (Dave Thomas of Wendy’s also made the same claim.) The saw blade manufacturer was losing his business to a German company, and the short form of the story is that he needed $10,000,000 to buy machine tools to compete. I showed him how to do that using Investment Tax Credits – this gave hom a tax credit of 10% of his business investents. He was a sole proprietor, had paid large taxes over the past few years and would over the next few, with the new equipment. He followed my advice, got a $10,000,000 tax credit over the uears, and the business still survives. The owner never even thanked me. That was in 1982. i learned a lot from that. Make it known what you will do and have done at other employers; hint at what you will do at the interviewing employer – DO NOT SHOW THE HOW TO DO IT!

    If you do this, 7 out of 8 will not be interested – “That’s too much money to pay an employee!” Not so; but the $10,000,000 was way too much money to just give away to an ungrateful owner. But the 1 in 8 will be interested and you will be part of the insider team and making the money you earn.

    One last item, earning a generous paycheck is the easy part. its 10 times harder to collect it. everyone of you out there know this from your own experience. Make sure that you get everything – – everything – in writing!

  10. For those of us in the contractor market, rates are absolutely cratering despite scarcity of expertise and availability. Employers are putting them out through Indian body shops and from what I’ve observed, taking advantage once again as they did after 9/11 and during the post-2008 reception. All you can do is laugh and refuse. Trust me, the body shoppers know the bodies aren’t there.

Leave a Reply