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Think you’re underpaid? Five things to consider before calling it quits

Think you’re underpaid? Five things to consider before calling it quits

Are you feeling underpaid and undervalued at work? Before you go and look for a higher-paying job, you need to consider a couple of things: the market rate for your role, and what the real problem might be for your workplaces woes.

Understanding salary

As you ponder your next move, it’s crucial to understand how a pay raise works.

Often, people assume that their pay should increase every year that they stay at an organization. However, unless there is a bonus program or a special arrangement in place, a salary is often worked out as the confluence of three things: the market; your performance and business performance.

THE MARKET
To check the market rate, check one of the popular salary calculators such as Salary.com

Things to bear in mind: market rate can be influenced by variables such as the sector you’re in, years of experience in the profession, organization type (e.g. public sector, multinational corporation, small business or agency). It’s also influenced by the seniority of the role and availability of the skills and talent required for the role. So you might need to investigate further and check out recent jobs advertised to gain further evidence of what employers are offering.

PERFORMANCE
You might have performance bonuses linked to KPIs, or pay raises based on performance might be discretionary. You should find out how your company links performance to pay and discuss with your manager or HR.

BUSINESS PERFORMANCE
Discuss with your manager to get an accurate view of how your pay might be affected by business performance in your organization – there may be a freeze on pay raises, for example.

If your salary has remained stagnant over the years, it may be one or more of these variables at work. Even if you’ve performed well, if the business is facing challenges or there is less demand in the market, there may not be much that your manager can do. Understanding the market rate helps you gain perspective on what others are being paid, but it’s up to you to decide what the next step should be.

If you do decide to ask for a pay raise, here’s some advice on how to go about it.

Alternatives to pay raises

Depending on where you are in your life and career, you may value other benefits over money. For example, if you have young children, your priority may be flexible work hours and access to extra leave. Work out what incentives you’d be willing to accept instead of a pay raise, if you decide to discuss your options with your manager.

Think more broadly

It’s easy to attribute your discontent at work to pay, but it may be that your source of discontent runs deeper.

Salary aside, what other factors do you consider to be deal makers or breakers?

Hudson research has found that, when it comes to the number one reason for leaving a job, it was due to boredom/need for a new challenge -- salary was third (The Hudson Report : H2 2016).

Once you identify the source of your discontent, try to see if you can remedy this at your current workplace. For example, if you feel bored and unstimulated, could you take a class that would allow you to widen your work scope, and will possibly lead to a pay raise over time? Could you volunteer to take on new projects?

Conversely, if you are overworked or don’t get along with your team or manager, being underpaid may just be further evidence why leaving may be a smart move.

Think long-term

As you assess your current situation, keep a long-term focus. Millennials will often take a lower paying job for career progression in the long term.

If you are underpaid, will your current role help you reach your next step and pay bracket? If not, it may be time you looked for something that’s more closely aligned to your career objectives and offers a competitive market rate.

Make a decision

Our research also shows that workplace environment is the most important aspect in luring talent to a company (Global Candidate Study, January 2017). While a good workplace environment is important, a great culture doesn’t negate the fact that you aren’t being valued enough. Unless you’ve got an ownership stake in the company, being paid less than the market rate doesn’t make a lot of sense. Ultimately, your workplace is where you spend a good chunk of your day, week and life. Thus it makes sense to place yourself in a workplace where you can grow and are valued. While you can’t dictate how much your employer should pay you, you are responsible for your own career and for knowing your own value.

Your salary plays a part in determining this equation so that you can evaluate, set or realign your career objectives.

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