We all want to be paid a fair wage – if not an exorbitantly high wage. However, oftentimes, circumstances beyond our control – a lack of job opportunities, an accumulation of bills that need to be addressed, the rising cost of living, etc. – force us into accepting a job and its terms of compensation regardless of whether those terms are fair or not.
Sometimes, we take a job with the intent of using it as a stepping stone to bigger and better things. But, after a few years, we find we are still at that job and the stepping stone has turned out to be more of a plateau than a step.
Regardless of where you are in your career path, regardless of the type of job you have and the type of compensation you are awarded, you still want to make sure that you are being treated fairly. In this short article, we will take a look at ways you can find out how much you should be being paid and any steps you should envisage taking to ensure that you are being paid a fair salary.
Know the Market
To a large extent, the amount of your salary will be determined on the market, specifically the job market. Companies are in competition with one another to recruit the best possible employees. And one of the ways they try to gain an edge is by offering a higher salary than their competitors. When a given skill set is in high demand, the salaries tend to go up. Whereas, when an employee can be easily replaced, the company usually does not feel the need to offer a particularly high salary.
To know where your salary fits in the market, it is a good idea to peruse the various job boards online and see what companies are offering for a similar position as the one you hold. There are a few variables worth keeping in mind:
- Additional perks or benefits that could compensate for a lower salary – such as company stock options and bonuses
- Years of experience
- Any specializations or additional skills that are required.
Know Your Value
Your company is paying you based on the value they believe you can add to the company. The initial salary you are offered is based, in large part, on the projected value you will add.
After some time at the position, the real value could be quite different from the initial projected value. Value can be understood in a variety of ways:
- The amount of time and resources you save the company from spending
- The loss in profits or the loss of growth you spare the company from incurring
- The increase in sales or profits you are directly or indirectly responsible for
- The increase in brand awareness or customer loyalty you are directly or indirectly responsible for
In many instances, the value you bring to a company can be difficult to quantify, but it can often coincide with overall improvements in the company and its bottom line.
While improvements and growth are expected, it may be the case that your performance has exceeded the expectations. In this case, it is only fair that your salary be renegotiated.
Know Your Company’s Financial Status
There can be a discrepancy between what you are worth and how much a company can pay you. Just because a company is growing and doing well in sales does not necessarily mean they have money to pass the benefits on to their employees. We need to take into account debts and current and projected investments the company will need to make to ensure this growth continues.
If your company is publicly traded on the stock market, it is required to file annual reports. You should be able to ask for a copy of the reports from H&R or from upper management. You can also find these reports online on the SEC website. The website is quite difficult to navigate. If you want an easier tool to find your company’s financial statements, there is a paysite worth checking out.
Ask for a Raise
Link to the royalty-free image by Amy Hirschi here
When you feel your initial salary does not match the actual value you provide or if you feel you have gained experience and improved your skill set to an extent that should be reflected in your salary, this is the best time to ask for a raise.
When you ask for a raise, you need to be armed with 3 things/
- A clear idea of why you feel you should get a raise – increased experience; improved skills; an increase in responsibilities; an increase in the workload – have data to support your claims.
- A good understanding of where your company is in terms of market performance; financial solvency (its ability to meet its debts and financial obligations); and near-future projections
- A clear understanding of the job market – what are your options should your request for a raise be denied or countered with a lower offer
In a Nutshell
Don’t leave it up to your company to make sure you are being fairly compensated. As well-intentioned as they may be, their priority is the bottom line – a priority that is often in conflict with paying competitive or fair wages.
Do the research on the job market, on the value you bring, and on the overall financial health of your company. Get a clear idea of how much you should be getting paid and demand no less.