As an employee, it is normal to sometimes wonder whether you are underpaid. You may often ask yourself, do I just want more money or is my employer taking advantage of me?
Determining if your pay is fair involves more than just comparing your salary with that of your co-workers. There are many signs to look out for to determine if you are being underpaid. We list the seven most common signs here:
7 Signs You Are Underpaid
1. Stagnant Salary Despite Positive Reviews
If your performance evaluations are consistently positive but haven’t translated into salary increases, it’s a sign your compensation isn’t keeping up with your contributions.
2. Increased Responsibilities Without Pay Increase
Being tasked with more responsibilities or a higher workload without an adjustment in pay is a classic sign of being underpaid.
3. Pay Discrepancies Among Peers
Discovering colleagues with similar or less experience, or those in comparable roles, are earning more is a red flag. Sometimes employers hirer new employees at higher wages to compete with the market, but fail to adjust current employee wages. While discussing salaries can be sensitive, conversations with trusted peers can be valuable.
4. Your Salary is Below Industry Norms
Do you often feel like if you were hired at a different company you would make more money? Your instincts may be right. Here are some ways to figure out what others are making in the same position and industry:
- Use Online Salary Surveys and Databases: This is the most common approach when trying to figure out what others are making. Several online platforms provide detailed salary information across various industries, job roles, and geographic locations. Websites like Glassdoor, PayScale, and Salary.com allow users to search for salaries by job title, experience level, and location. These platforms often aggregate data from self-reported salaries. They give you a ballpark figure of what people in similar positions are earning.
- Professional Associations and Industry Publications: Many professional associations conduct annual salary surveys and publish reports on compensation trends within specific industries. These reports can provide insights into average salaries, benefits, and other compensation elements like bonuses and stock options. Go to your professional association’s website to search for salary data. Or, do a general internet search on salary publications in your industry and role.
- Job Listings: Some employers disclose salary ranges in their job postings. Browsing these listings can give you an idea of what companies are willing to pay for specific roles. Although not all listings will include this information, those that do can offer valuable benchmarks.
- Utilize Recruitment Agencies and Headhunters: Recruiters and headhunters who specialize in your industry can be valuable resources. Because they’re involved in salary negotiations regularly, they have up-to-date information on competitive salary ranges. They can offer guidance on realistic salary expectations for your experience level and role.
- Consult with Human Resources Professionals: If you’re currently employed and considering an internal move or promotion, your HR department may provide salary range information for different roles within your organization. While this might not always reflect the entire industry, it can give you a sense of how your company’s compensation compares.
- Analyze Cost of Living Adjustments: Salary standards can vary significantly based on geographic location due to the cost of living differences. When researching, consider how salaries adjust for cities or regions. Tools like the Cost of Living Calculator from NerdWallet or the Cost of Living Index by Numbeo can help you understand these adjustments.
- Network with Industry Peers: Networking with colleagues and peers in your industry can provide valuable insights into typical salary ranges. Informational interviews, professional association meetings, and industry conferences are excellent opportunities to discuss compensation in a non-intrusive way. While direct salary discussions might not always be appropriate, you can still gain insights into what could be expected for someone in your role. Discuss the industry and what the role may look like in the future. This can be a sneaky way of bringing up salary without directly asking someone’s compensation.
5. Salary Hasn’t Kept Up With Inflation
If your pay hasn’t increased in line with inflation, your purchasing power decreases over time, effectively reducing your real income. Most employees will receive a salary bump, usually every year, to align with inflation.
6. Lack of Transparency Around Pay
A workplace culture that discourages or outright prohibits discussions about salary can sometimes be a sign that the employer is hiding inconsistencies in their payroll. This is definitely a red flag. Federal law prohibits your employer from disciplining or firing you for discussing your pay and benefits with your coworkers.
7. Your Living Costs Outpace Your Salary Increases
If you’re finding it increasingly difficult to meet your living expenses despite being frugal, especially if you live in an area with rising costs of living, it’s worth investigating whether your salary is at par with market standards.
What You Can Do
- Research and Prepare: Gather data on standard compensation for your role, experience, and region. Document your achievements, responsibilities, and any additional value you bring to your organization.
- Enhance Your Negotiation Skills: Learn or sharpen your negotiation skills before meeting with your manager. Being well-prepared can significantly impact the outcome of salary discussions.
- Explore Professional Development: Sometimes, pursuing additional certifications or training can bolster your case for a raise or prepare you for a better-paying position elsewhere.
- Check For Discrimination: If you find that your employer is paying others more that have the same experience and performance, it may be discrimination. You cannot be paid less because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information. If you suspect discrimination, speak with an employment attorney as soon as possible.
- Consider Other Job Offers: If your current employer is unable or unwilling to adjust your salary appropriately, it might be time to explore opportunities elsewhere. Having an offer in hand can also provide leverage in negotiations with your current employer.
Conclusion
Being underpaid affects not just your financial well-being, but also your job satisfaction. Advocating for fair pay is a legitimate part of managing your career and ensuring your skills and contributions are appropriately recognized and rewarded. If you find that your employer is not paying industry norms and won’t adjust your salary, it may be time to look for a new job.
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Disclaimer: This article is intended for informational purposes only. It provides general information and is not intended and should not be construed as professional advice. The author is not your attorney, accountant, financial planner or any other professional and no professional-client relationship is created. We do not represent that the information provided is accurate or up-to-date as laws and regulations are always changing. If you have an issue that requires professional help, you should contact the appropriate professional to help you on your specific set of facts. Please read the Terms and Conditions for additional information.