After nearly a decade of stagnation, wages are starting to rise as a strong job market (finally) gives American workers more power in negotiations.
Securing a raise at work is good for workers over both the short and long-term since higher pay compounds and can add up significantly over the course of a working career. “What you’re making when you start out has an impact on what you’ll make in the future, and on your overall net worth,” says millennial career expert Jill Jacinto. “As you change jobs and move forward in the process, you want to make sure you’re combatting underpayment early on.”
Before scheduling a sit-down with your boss to demand more money, however, it’s important to make sure you have a realistic idea of what you should be paid. Follow these steps to determine whether you're fairly compensated.
- Think about how you were hired and your last salary negotiation. A Glassdoor survey last year found that three in five Americans failed to negotiate when offered a job. That may have been even more common among those who have found jobs during the Great Recession making some workers timid about negotiating for more money. If you were hired during the downturn and hadn't recently asked for a raise, there’s a good chance that you’re being underpaid.
If you’ve been with a company for a long time and never negotiated a raise, you may have missed out on the opportunity to up your pay. That’s especially true if you’ve been promoted without a commensurate raise, a common practice during and after the recession when companies had the leverage to get workers to do more work for the same pay. Three-quarters of people who ask for more money get at least a small raise, according to PayScale.
- Check the surveys.
Trade organizations often publish salary data that can give you a broad sense of what someone in your position should make, although you may need to recalculate based on the size of your company and the cost of living in your area. Web sites like Vault.com and GetRaised also offer company and job-specific salary data based on surveys of anonymous users. Recent graduates should also check in with their alma mater to see whether the school makes available alumni salary data. “You should be able to tell within a few thousand dollars what the range is,” says Vicky Oliver, the Manhattan-based author of 301 Smart Answers to Tough Business Etiquette Questions.
- Ask around.
While talking about salary can be awkward, getting intel from co-workers and industry peers can be incredibly helpful in determining whether your own compensation is legitimate. The best sources for this are colleagues in the same exact role as you are, both within your company and at competitors. If you’re in touch with your predecessor, finding out what she made when in your position is also key.
Asking someone how much money they make can be uncomfortable, but once you’ve established a networking relationship, you might casually mention how much money you earn and see whether they think it’s in the right ballpark.
While some companies encourage transparency around salaries, others have rules prohibiting employees from sharing such information. Be sure you know what your company’s policy is and whether your state has laws protecting your rights to discuss your salary information.
- Interview elsewhere. One of the best ways to discover what you’re truly worth is to get a job offer somewhere else. If the salary offer is significantly more than what you’re making now, you can be sure that you’re currently underpaid. Once you’ve secured an offer, you can use that to get your current company to pony up (but be ready to jump ship to the higher paying gig if your boss says “no”).
Even if you don’t end up with a job offer, you can still get useful salary info by going through the process. Spend some time on industry job boards, since some postings themselves, including those posted by your current company, may provide a salary range. If you’re working with a recruiter, they can also be a great source of inside info on compensation in your field.
- Include the value of your benefits.
If you believe that you are underpaid, make sure that you’re also calculating the value of non-salary compensation and perks, such as health insurance or the ability to telecommute or work a flexible schedule. “Sometimes people don’t understand the implications of the benefits package from a dollars-and-cents point of view,” says Mark Babbitt, founder of YouTern.com. “If you can go somewhere else and make more money, but you have to work longer hours and have no flexibility, you have to ask what your lifestyle is worth.”
- Consider your performance.
Be realistic about whether you’ve been a valuable employee to the company. If you consistently receive glowing performance reviews (but haven’t received commensurate raises), you probably have a good case for a raise. However, if you’ve struggled to meet goals or had other issues, you may want to work on your workplace rep before asking for extra dough.
A Willis Towers Watson survey last year found that employees who received the highest performance ratings received raises that were about 77 percent larger than those who got an average rating. Meanwhile, workers with below-average performance ratings took home raises of less than 1 percent.