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How to determine if you're getting paid what you're worth

When a member writes in with a salary question, career expert Molly Joss explains the long and short of it. Here's how to determine if your salary is on par with the industry average, along with tips on how to ask for more money.


This article originally published on our sister site, TechRepublic.

Question
I found out recently that someone who works in the IT department with me and who has almost the same kind of job gets paid substantially more than me. I’ve been with this company for a couple of years, long enough to see IT department bonuses be eliminated (an action that was blamed on the economy) and long enough to be promoted. On the whole, I was happy with my job, but now I am wondering if I am being short-changed. Is there any way to find out what I really should be paid for what I am doing?

Answer
There is a short answer and a long one.

Let’s start with the short one: You get paid whatever the market will bear. In other words, you get paid whatever the company can get you to take. Whatever that is may or may not have any relationship to national averages, industry averages, or with what anyone else in the company is making.

The long answer is more detailed and complicated. What you make can depend on the company you’re working for and how it approaches salary structures. For some companies, salary structure is an issue they research meticulously and pay very careful attention to in order to keep their best talent. Other companies name as low a figure as they can without laughing out loud and hope for the best. Rely on your best, calmest sense of what kind of employer you work for.

Research the salary data
That said, there are some ways to determine how much colleagues doing the same work are being paid on average. Warning: Because IT jobs, even those with the same title, vary so much from company to company, consider any salary information you find to be a guideline and not gospel.

There are lots of Web sites that offer IT job salary information. Make sure that when you visit such sites you find out what factors they used in evaluating or gathering the information they present. Data from HR departments is more reliable than information gathered through surveys. People tend to inflate their salaries on such surveys, even when they are anonymous.

Here are some Web sites for you to use in your research: Salary.com, Salary Source, and Wage Web. The Federal government’s Bureau of Labor Statistics has a lot of job and compensation information. You can also get a booklet of salary information from Robert Half International by request at the company’s Web site.

Keep in mind some other factors when evaluating salary data, such as the strength of the regional job market, the size of the company, the size of the IT department, the financial well-being of the company, the short- and long-term prospects for the company, and the industry. If you can find data garnered from companies that most closely match your company’s profile, you’re closer to finding valuable information.

Also consider what the future might hold for your company—you can be sure that senior management is. When companies are doing well and they see bright prospects, they tend to pay more than when times are tough. Right now, times are tough for just about everybody and the future is looking pretty murky. Thus, companies are trying to keep compensation costs from increasing and even laying people off in order to cut expenses.

You will also want to factor in the value of any other type of compensation you are receiving. Count anything that you could turn into real money at some point, such as employer contributions to pension funds. Stock options were a popular way of compensating employees until the Internet bubble burst. You may have stock options, but if the company isn’t doing well those options aren’t worth much.

Your options after the research is done
If you discover through research that you are not being paid anything close to the regional average for the kind of work you do, you have several choices. You can keep your mouth shut and quietly look for a new job where you will almost certainly be offered a higher salary. You can keep quiet and keep the job you have, hoping your employer will magically loosen the purse strings. Or, you can choose to talk to your employer about what you now know.

If you choose to confront the situation with your current employer, do not walk into the office, throw the results of your research on his or her desk, and demand commensurate pay. No manager likes to be on the receiving end of a barrage like that. I know because years ago I tried it. My boss’s response was, curtly, “Well, maybe you’d better go find one of those jobs where they pay people that much.” It’s hard to have a positive working relationship after an exchange like that.

Instead, figure out a way to confront the issue indirectly and casually. It takes some practice to be able to do this kind of thing gracefully, but you can come up with a way to broach the subject without being openly confrontational. Believe it or not, good managers at good companies are open to salary discussions, as long as they are not ambushed during such discussions. Start slowly by asking general questions about how the company sets its compensation policies.

One way is to nicely inquire how you can increase your compensation package. Pay close attention to your manager’s answers and body language. Look for evidence of obvious lies—such as being told the company is going through a rough patch financially so there’s no opportunity—while you both know every executive is driving a new luxury car. Mention some projects or announcements that bode well for business and will likely increase revenues to assert your point that there is some money available.

After all your research, you could discover that you are being fairly compensated for the work you are doing. You may even discover you are at the upper end of the pay range. If not, you may decide that while you like your job, you need to change employers because yours is a perpetual tightwad. If that’s the case, even with today’s tight job market, you may well find greener pastures, and it’s worth your time to investigate.

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