Am I underpaid?

On August 24, 2020
Am I underpaid?

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Salary surveys are usually either out of date, or they are naturally biased toward the mean.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?

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The ONLY way to ask for a higher job offer

On August 3, 2015

In the August 4, 2015 Ask The Headhunter Newsletter, a reader wants more money.

Question

How should I request a better offer than the one that was made? By phone? By e-mail? By regular mail? Do you ask the HR person, since that is who handles the offer letter in the first place? How does the give-and-take take place?

Nick’s Reply

Almost everyone makes one huge mistake when asking for a higher job offer. They fail to justify the extra pay.

Want more? Prove you’re worth it!

want-moreWhy would anyone give you more money just because you asked for it? Yet job seekers try that lame approach all the time.

If you want more money, you must explain why you’re worth more.

(By the way: Don’t waste your time quoting salary surveys. No survey includes the exact job you’re applying for, or your exact constellation of skills and attributes. You will always lose the survey game because any smart employer will respond with yet another survey that “proves” its offer is handsome! See Beat The Salary Surveys: Get a higher job offer.)

When negotiating for a better offer, the goal should be to engage in a discussion rather than to put a stake in the ground, unless you are absolutely sure your asking figure is firm. This allows the company to explore the money issue with you, rather than be forced to respond with a yes or no.

Ask the manager, not HR!

It’s critical to have the discussion with the hiring manager, not with HR. HR might control the hiring process, but it’s the manager’s budget that your compensation will come from. So have this discussion with the manager, in person or by phone. (I would not use e-mail. It’s too impersonal.) Try this:

Make a commitment

“First, I want to thank you for the offer. I want to come work with you.”

That’s a powerful opening statement because it resolves one big question for the manager: Does this candidate want the job? Once you’ve made this commitment, managers know it’s worth their time to work out the terms. Too often, job candidates try to negotiate money without consenting to the job itself. Bear in mind that saying you want the job doesn’t obligate you in any way. If the money can’t be negotiated to your satisfaction, you can ultimately turn the job down.

Now comes the most important part:

“I realize you have carefully considered how much you think this job is worth. As we discussed in our interview, I believe I can do this job [more profitably, more efficiently, more quickly, more effectively] by doing [such and such]. For these reasons, I believe my contribution on this job would be worth between $X-$Y in compensation. Of course, if I can’t show you why I’m worth more, you shouldn’t offer me the job. Are you open to discussing this?”

Deliver more value

The key element here is value: You must show how the added value you will deliver is worth more money. Employers love it when you reveal you have thought carefully about the work and how you would do it profitably. It shows you are motivated to make the deal a “win” for the employer.

But I will warn you: If you cannot explain exactly what you will do to perform the job more profitably, efficiently, quickly — better, in some way, than the employer expected — then you have no business asking for more money. This is not a negotiating game. It’s about exchanging fair value for fair value, and you must be prepared to explain it.

HR cannot have this kind of discussion with you, because HR will never understand the ins and outs of how you will add more value to a certain job. Talk to the hiring manager, and let the manager go explain it to HR.

(Don’t know how much to ask for? See How to decide how much you want. Once you figure this out, lay the groundwork for your salary negotiations early in your interview. See The most important question in an interview.)

Once you’ve said your piece, it’s up to the manager to respond and engage in a discussion. The manager may decline to discuss a higher salary. So, you must know in advance whether you will back off and take the offered package, or politely walk away from the offer.

Be the better candidate

The only way to approach salary negotiations is to grant the manager a concession: Clearly state that you want to work for him or her. Separate your interest in the job from the compensation, and the manager is more likely to negotiate terms with you.

“I’m ready to come to work, if we can work out the terms — the compensation.”

(For more about how to negotiate based on your value, see Fearless Job Hunting, Book 6, The Interview: Be The Profitable Hire and Book 9: Be The Master of Job Offers.)

There’s no guarantee about how this will work out. But, the better prepared you are to discuss how you will do the job better than anyone else, the better your chances of working out a mutually beneficial deal with the manager. The only way to ask for more money is to show the employer the money!

How do you ask for more money? If you’ve been turned down for more, why do you think you were rejected? Can you prove you’re worth what you ask for?

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Beat The Salary Surveys: Get a higher job offer

On February 18, 2013

In the February 19, 2013 Ask The Headhunter Newsletter, a job applicant resists lower job offers “justified” with salary surveys:

I don’t like telling employers my salary history when they ask, and I know you advise to keep the information private. But I’m happy to tell an employer what salary range I expect. That way we’re all on the same page, or why bother having interviews? The problem is that employers sometimes gasp when you tell them you want more than an average salary. When they trot out a salary survey and tell me what I’m asking is too far on the high end, how do I say, “You should offer me more money?”

Nick’s Reply

Here’s the advice I offer in my PDF book Keep Your Salary Under Wraps:

If an employer cites a salary survey, ask to see the curve. Point to the leading edge of the curve, where the most unusual individuals are earning the highest salaries.

salary-curveHow to Say It
“I believe I’m on the leading edge of the curve. If I can’t prove that to you during our interviews, then you shouldn’t hire me. But please understand that I’m not looking for a job on the middle of the graph, this part of the curve.” [Point to the fat middle of the graph, where average workers earn average salaries.]

Your challenge is to demonstrate that your performance would indeed be at the leading edge of the curve.

I realize this borders on sounding cocky, but remember that if you don’t make your case in this meeting, you probably won’t get another chance. Be polite and respectful, but be firm. Your future compensation is on the line. Obviously, you must be prepared to justify what you can do that makes you worth a higher salary. There is no way around this. Employers don’t increase job offers just because people ask for more money. You have to give them good reasons based on what you will bring to the job. (You also must decide what is the minimum you will accept. This article will help you flesh that out: How to decide how much you want.)

This is where I call employers and human resources departments to task. While the job offers they make are often only mediocre at best, they claim they reward “thinking out of the box,” and that they are in the forefront of their industry. This is where they need to prove it. I suggest you politely (and perhaps quizzically) address the person you’re negotiating with.

How to Say It
“I’ve studied your company carefully, and I’m impressed at your philosophy. Your company prides itself on thinking and acting out of the box. That’s why I’d like to work here. Of course, out of the box is another way of saying on the edge of the curve. I’d like to show you how I can bring edge of the curve performance to the job — but of course that means edge of the curve compensation. If you will outline what you consider to be exceptional performance, I’ll try to show you how I will deliver.”

There is nothing easy about this. You must do your homework in advance. (For more details on this assertive approach, please see The Basics.) It’s important to open a serious discussion on salary. Companies, and HR departments especially, love to talk about how people are their most important asset. We all know that assets are cultivated so they’ll grow. We want to maximize their value. So we hire the best people, pay them the most, and cultivate them well so they’ll pay off, right?

Well, that’s not what happens when an employer insists on knowing your past salary so it can base a job offer on it. It’s hypocritical — and risky business. It’s how companies lose great candidates who won’t stand for average job offers.

But you can make an employer’s pretensions work for you, if you can be firm but diplomatic, emphatic but gentle, challenging but cooperative. My suggestion above is one way to do it.

Putting Ask The Headhunter to work usually requires saying something to someone to make it pay off. My suggestions about How to Say It are not the only way. There are many good ways to tell an employer that you want more money when you’re negotiating a better deal.

What do you do when you want more money? How would you say it — and what’s worked for you?

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