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Are You Underpaid? Here’s How to Tell (and What to Do Next)

Topics: Negotiation
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Chances are, you’d like a raise. You probably even deserve one. But when it comes to negotiating a pay increase, it’s all about what the market will bear. This is true whether you’re negotiating a job offer or angling for a higher salary in your current role.

In other words, it’s not about your worth as a person or even about how effective you are at your job (although hitting your goals is obvious prerequisite for getting a pay increase). It’s about what your accomplishments, skills, and education can command in the job market in your specific geographic location.

How NOT to Find Out That You’re Underpaid

Let’s start with what not to do. It’s tempting to base your assessment of your compensation on what you hear. Your cubicle-mate brags about his salary, which is $10,000 more than yours — even though he came on board a year after you did. Your college roommate in the same field seems to have way more money than you do, despite living in a more expensive city.

Don’t be fooled. Even if you could count on people to be honest about their salaries — and that’s a big if — you’ll never get the full picture of who they are as a candidate. Your cubicle-mate might have a valuable certification that you don’t know about; your college roommate might just be bad at money. On the other hand, maybe they’re both genuinely making more money than you are, because they’re more adept negotiators — or for no good reason at all. You’ll never know for sure.

Do You Know What You're Worth?

What to Do Instead

Take PayScale’s Salary Survey, and generate a free report with a salary range based on data from thousands of other people with your qualifications and job title in your location. The survey is the largest real-time salary survey in the world, with 150,000 new records added monthly, which means that it’s a lot more reliable than just asking around. (For more about how the survey works, see PayScale’s methodology.)

Once you’ve got your salary report in hand, it’ll be easy to see how your current compensation stacks up to the market. Then you can make a plan.

What to Do Next

If your pay is in line with the market, but you’d still like a raise, your next move to is to figure out how to get there. Would an additional certification help? Could you build your skillset in other ways, to make yourself more valuable to employers (either your current company or a new organization)? Where do you want to be in five years — and what do people in those roles have that you don’t (yet) have?

PayScale’s Career Path Explorer can show you different career paths for someone in your job role, and what education and credentials you’d need to add in order to get there. It’s also a good idea to talk to people in your network who are doing what you hope to be doing in the future. They might have insight into how you can get from Point A to Point B. Don’t be afraid to ask for help — everyone loves talking about themselves and their careers, and most people are surprisingly ready to share their embarrassing career missteps. You could save yourself a lot of wasted effort.

If, on the other hand, your salary report shows that you’re underpaid, it’s time to ask for more money. Don’t be afraid to ask: data collected for PayScale’s Salary Negotiation Guide showed that 75 percent of people who asked for more money got some sort of pay increase. This piece provides a good primer on using salary data to negotiate a raise.

If your manager can’t find room in the budget for a raise, you’ll have to make a decision about whether to stay put — or start looking for your next job. But when you do move on, you’ll do so knowing what you should be paid … and how to ask for what you deserve.

Tell Us What You Think

Have you successfully negotiated a raise? Tell us how you did it in the comments or join the conversation on Twitter.

Jen Hubley Luckwaldt
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What your skills are worth in the job market is constantly changing.