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What to Do When You Are Underpaid

Author: Ethan Smith

What do you do when your work isn't being valued for what it is worth? Being underpaid makes work unpleasant in the short term and can harm your long-term earning potential. Here are some strategies to help you earn the pay that you deserve.

Do Your Research

Do you feel that you are underpaid because you can't pay your bills – or do you know for sure that you're making less than average for your job? Look into what people in similar positions make at websites such as Sometimes cost of living can skew pay significantly, so be sure to search for similar positions in your geographic location.

Another way to compare your earnings is to look at people with comparable levels of experience in your field. Oftentimes universities will post general information about salaries of graduates in various fields: If your alma mater doesn't have such information published, try calling its career services office for its take or look at data from similarly ranked universities. Professional associations are another of salary surveys for various job categories in your field.

Prepare Your Case

If you've done your research and determined that you are being underpaid, it's time to start prepping to negotiate. The research you've done is good groundwork, but you also need to look at your employer's policies. If there is a set promotion and raise schedule, you will most likely have to work within those constraints, but otherwise you are free to negotiate at any time.

Beyond knowing industry standards, geographic cost-of-living factors, and the salaries of people with similar experience and backgrounds, you should also be prepared to discuss the work you have done for the organization in the past. Have you led projects? Done innovative work? Contributed to company outreach? Saved the company money? Make a list of all of the tasks you have done in the past year and be sure to quantify your work with numbers and results, where possible.

Prepare to Negotiate

Negotiating with your employer for more income is a tough, uncomfortable discussion, but it is worth it in the short and long run. The most important thing to do is prepare and practice. Be ready to discuss a reasonable range in which you hope to increase your earnings; have a goal number in mind and stand by it. An easy pitch is to ask to keep up with inflation, which is approximately 3% each year, but this will not help you recover from any existing salary shortcomings. (For more, see Salary Secrets: What Is Considered a Big Raise?)

There are scripts available online to help you find the words to make your case. Practice alone, then try role-playing the negotiation with a friend or family member. Being prepared will take away some of your nervousness, and you are more likely to get a raise if you can confidently and coherently explain why you are worth more money. Asking meekly or nervously will not help your case.

Consider Asking for Alternatives to Pay Raises

It may be that your employer is not in a position to give pay raises, but could offer better benefits if you ask for them. More vacation days, flexible work schedules or telecommuting options are all benefits worth asking for if a raise is not possible – and depending on your situation, could be even more valuable to you right now.

An additional option is to ask for professional development funds. Taking a course, earning a certificate or speaking at a conference are all ways to improve your professional skills, and being a more skilled worker will help your organization as well. Once you've earned that certificate or learned a new programming language, you can add your new skill to the list of reasons why you deserve a raise the next time you are preparing to negotiate.

If your boss isn't ready to negotiate now, ask for a performance review with the option of a raise in the next three to six months. During that period, be conscientious about your work and keep a careful log of your contributions to the organization. (For more, see 7 Tips For Getting The Salary You Deserve.)

Be Prepared to Look Elsewhere

If you've negotiated and gotten nowhere, it may be time to start looking for a new job. You have already set yourself up for job hunting during your negotiation preparation: You know what you should be making, you have a detailed list of your contributions – easy to copy into a resume! – and you've practiced negotiating. When you get a job offer, negotiate for a higher salary than you previously earned. (For more, see Job Hunting: Higher Pay Vs. Better Benefits.)

Having a job offer gives you one final card to play at your current job, provided you would rather stay where you are. Tell your current employer you've been offered a job with a higher salary and that you'd rather stay if the offer can be matched. Beware: Only use this tactic if you are really prepared to leave your current job as it could backfire and force you into a new job you don't really want.

The Bottom Line

Being underpaid hurts you in both the short and the long run. Research, preparation and looking elsewhere can all help you overcome your salary issues. It is an uncomfortable process, but when you are successful, you will thank yourself for putting in the effort to make sure you are earning what you are worth.

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