How to know if you're being underpaid at your jobAug 04, 2022
Your friends are getting raises, you feel overworked, and your wage hasn’t been adjusted for inflation.
You’re starting to think you’re being underpaid at your job. What do you do?
It is easy to think that if you are grossly underpaid, you either have to suck it up, quit, or find a new job. None of these options are simple choices to make. You must weigh the pros and cons of each decision to decide what you are going to do about your compensation.
Let’s break them down.
Talk to your coworkers
Did you see your coworker post about their raise on LinkedIn? Did you find a job posting in your company for a similar position? Is a friend at another company in the same role as you making more than you?
Somehow you saw an annual figure that does not match the contract you signed and you need answers.
Before jumping to conclusions and scheduling a meeting with your manager, talk to your colleague to learn more about your work situations.
There are a number of factors that could result in your colleagues making more money or having more benefits than you such as:
1) Roles and responsibilities
Put simply, your colleague could be handling more work than you, which means they are getting paid more than you.
Review your roles and responsibilities at work based on what is part of their job description and what they do on a daily, weekly, and quarterly basis.
Once you are sure that your responsibilities are comparable, you can make an informed judgement call about if you are being underpaid.
2) Discriminatory differences
Sometimes your gender, race, and sexuality can affect the way you are being paid. This discrimination is illegal, but still common in many workplaces. Sometimes it can be hard to prove.
Again – comparing your roles and responsibilities could reveal if your hunch is right.
It is also a time to reconsider if you would like to work at a company where this wage disparity exists.
Sometimes your diploma or degree makes the difference. Having a college, bachelor’s, master’s, or doctorate background means you achieved a certain level of academic success and expertise, which makes your contribution to a company more valuable.
Other times, it can be your work experience. Handling portfolios with multi-million dollar contracts, high-level stakeholders, and Forbes 500 companies will give people an edge over those who don’t. It proves there is a different level of work ethic, experience, and knowledge someone can bring to a work team.
Compare your educational and professional backgrounds to make sure the pay differences are not rooted in where you have received your academic and work experience.
Research other salaries
Before you ask for a raise, you should have a figure in mind.
You need to know what you deserve and your manager needs to know you are approaching the conversation intentionally. It will be harder to justify saying no to someone who is approaching the conversation with research and a clear proposal.
Do not just take what you can get.
There are a number of ways you can prepare for this conversation.
Robert Half Talent Solutions has a Salary Guide that shows national trends in salaries, remote work wages, perks and benefits.
To get straight to the point, type in your position title and the city you are working in. You’ll find:
- Entry-level and beginner salary
- Mid-level salary
- Advanced salary
- The national midpoint salary
- How much experience one needs in the position
- The demand for employees in the position
Your entry search will also reveal similar positions’ salaries.
If you want to look outside Canada, these insights are also available in countries around the world such as the United States, the United Kingdom, China, United Arab Emirates, and so on.
Other websites get more specific about positions and pay equity.
Levels searches get more specific. If you’re employed by a top or moderately popular company, you can find the salary of your position in your company – but that’s not all.
Source: Levels Home Page
It shows you the base salary so you’ll really know if you’re underpaid. It shows the average total compensation so you can determine where you sit among your colleagues on your team and across the company. It also tells you about how much employees make in stock grants and bonuses.
And then it points you toward similar companies to see if they are paying their employees what you believe you deserve.
How to ask for a raise
You can decide if you would like to frame the conversation as simply asking for a raise or addressing being underpaid. There are pros and cons to both.
One request seems like a response to exemplary work. If your manager does not agree, you may not receive it. You may also just receive a raise that gets you to the wage you are supposed to be owed in the first place. Then your opportunity to get a raise down the line may be delayed due to this recent request.
The other seems more confrontational. Your manager may not recognize or acknowledge the pay gap. You can choose to bring this over your manager’s head and towards HR and get the compensation you deserve.
Either way, you have to build your case to stop being underpaid.
It is better to ask for a raise during an in-person conversation (or a video or phone call if you work remotely), rather than an email.
Conversations are more personal. Management will be able to hear your appeal and respond to you instantly. Even if they cannot give you a definitive answer within the first conversation, they won’t get the chance to craft a delayed response after it is being edited and reworked, to send whenever they want.
Here is what you tell them:
- Your work responsibilities
- Your work achievements
- The national average salary for your position
- The average salary your company is providing for this position
- How your responsibilities, achievements, and the average salaries should result in a compensation increase you desire
After their response, you can offer to send them an email with the same points you covered during the conversation.
If you can’t have a conversation for whatever reason – scheduling issues or nerves – here is a template of what you should write in an email:
It is a pleasure working for (company name), and I appreciate the skills I have developed to produce key deliverables and achieve our company goals.
As a (position title) with (time at company), I would like to request a review of my compensation. During my time at (company name), I have achieved success in several areas and taken on the following responsibilities that I believe warrant a (compensation increase).
Here is an abridged list of my roles and responsibilities over the past (time at company)”
- Item one
- Item two
- Item three
Considering the national average salary for my position is ($$$/year), and our company pays employees in my position ($$$/year), I believe I should be making ($$$/year).
I am requesting you please review my request for this change in compensation. I am available to meet and discuss my compensation at your earliest convenience. Thank you for your time and consideration.
What to do if you cannot get a raise
Salary Guide anticipated that the compensation conversation, no matter how prepared you are, may not end the way you want it to.
At each salary search, they also provide similar jobs with current openings in surrounding areas – with the salary included.
If you don’t want to leave your company, you should consider relocation. Levels will show you related salary ranges according to where you live.
That is to say – sometimes to stop being underpaid at your company, you need to find a new company.
It could be a budget problem. It could be a management problem.
Either way, you must go where you are compensated accordingly.
If you believe you’re being severely underpaid, you should not shy away from having that conversation with your manager.
A company that values you will pay you what you’re worth. A company that does not have the means to pay you what you’re worth is not that company you are meant to stay with.
When you’re being underpaid, it will eventually affect your quality of life, which will eventually affect your quality of work.
It’s up to you to stop the cycle.