Are you underpaid?
Learn how to tell if you're earning less than you're worth.
Among the many reasons you work a job, way up at the tippy top is to make money. A good company will take into consideration a variety of factors and pay you what you’re worth. That said, if you think that your company is being stingy when it comes to your paycheck, you’re not alone. Forty-three percent of U.S. workers think they are underpaid, according to a 2018 Gallup poll. If you’re one of them, it could be time for a paycheck reality check to figure out if you’re getting fairly compensated or stiffed.
If it turns out to be the case that you’re being undervalued, then it might be time to take some action.
But before you make any moves, you’ll need to confirm if your earnings are indeed under par. “With so many variables in market, geography, industry, and individual skill sets, it’s impossible to pinpoint an exact number,” says Doug Schade, partner at talent acquisition firm WinterWyman. There are sources you can turn to, however, which will help determine an acceptable salary range for your job title.
Dig into the data
A great starting point is to go online to get a sense of what others in your industry are being paid. Tools such as Monster’s salary search page will reveal a range of incomes earned by people in your position and location. And, if you’re considering a new role or are on the job hunt, you can search other job titles to see how those salaries and locations stack up.
Fact is, salary can vary widely depending on geographic area. A marketing professional in New York City might out-earn someone doing the same job in Nashville. That’s why salary tools like Monster’s require that your search includes a location. The results will show not only the average salary for your position in your city, but the national average as well.
Because reported salaries might be all over the map, your best bet is to get a rough idea, and then factor in your particular experience and skills, says Janet Ehl, executive director of University Career Services at Bentley University in Waltham, Massachusetts. “One option is to take an average first and see how that compares to your salary,” she says. “Then you can make a case for why you should be paid on the higher side of the range.”
Beyond what online algorithms tell you, there’s a lot to be learned from your peers, including friends and former classmates/colleagues who now work in your industry. “Even though there’s a natural tendency for people to pump up their salaries and some variability caused by differences in education, years of experience, companies, and positions, they can offer good insight,” says Schade. For instance, you might get a better sense of what other companies are offering beyond just a base salary, such as bonuses, benefits, and other extras.
Of course, you may not necessarily want to come right out and ask people what their salary is. Another tactic you can try if you belong to a professional or industry organization is to see if they have conducted any salary surveys or can provide other general information about fair compensation.
Test the market
Another avenue to consider is speaking with a recruiter, especially if you think you might end up seeking a new job. “Every day, we see what companies are paying individuals with similar experience,” says Schade. “The ongoing stream of information we receive from interviews and job offers provides a clear vantage point of the market and what you might expect based on your skills and experience.”
Some professionals take their research a step further by actually going forward with interviews so they can get a sense of what other employers are willing to pay. Even if you’re not actively looking for a new job, if you suspect you’re being undervalued by your current employer, it could be well worth your while to go through an application and interview process in order to see what a company offers you in terms of salary. (And who knows, they may make you a darn good offer.) “Going through a rigorous job search process is the best-known way to understand your market worth,” says Schade, calling the offers that come in the most accurate indicator of your worth.
After all, that’s what hiring managers are tasked to do—review a candidate’s credentials and assign a value to them.
Factor in the value of benefits
As of June 2020, benefits accounted for about 29.8% of employer costs of compensation for U.S. workers, according to the Bureau of Labor Statistics. In other words, the average salary only represents 70.2% of the total compensation package.
Think about the numerous benefits and perks that your employer might offer, from 401(k) matching contributions, to generous PTO, to flextime, to tuition reimbursement, and more. What are those things worth to you in real dollars, and perhaps more important, what is their impact on your work-life balance and overall happiness?
“Employers are not coming at this with just your base salary in mind; they are taking into account base salary plus potential bonuses, health care, vacation,” says Ehl. In other words, those add-ons do count for something—especially if you have a strong health care plan—so keep that in mind before you go marching in with salary demands.
Carefully consider your next moves
Whether you’re happy at your job or seeking greener pastures, it’s never a bad idea to do some investigation into your value. As Ehl likes to say, “be vision-based, but data-informed.” If your findings confirm your suspicions that you’re being underpaid, then you can take appropriate action.
You might decide to talk to your manager about all the data you compiled and start a conversation. “If they don’t agree you are underpaid,” says Ehl, “ask about a path that could put you into a higher pay scale, and then hit the ground running.”
Or, you might realize that it’s time to explore bigger and better opportunities. Want some help taking the first step? Join Monster for free today. As a member, you can upload up to five versions of your resume—each tailored to the types of jobs that interest you. Recruiters search Monster every day looking to fill top jobs with qualified candidates, just like you. Additionally, you can get job alerts sent directly to your inbox to cut down on time spent looking through ads. And because you’ve already done your salary research, you’ll be one step ahead of the game.