Most people’s primary career motivation is to earn as much money as they can; it’s natural to strive for a higher salary as you progress through your career. Carrying out a salary comparison will reveal how your pay compares to others in similar positions and can provide you with a good starting point from which you can ask for a pay rise.
Whilst there are many other factors that impact career fulfillment and enjoyment, such as the people you work with, the impact your work has on the community, and the work-life balance you have, it is money (in other words, your salary) that makes the world go round.
This was confirmed in our recent ‘Global Hiring Realites’ survey of 4,134 professionals, where ‘increase in salary/compensation’ was given as the most common reason people move into a new job, and ‘displeasure with current salary/compensation package’ was the most frequent response as to why they would leave their current job.
But what should you do if your salary comparison - through using benchmarking tools such as a salary guide - shows that you are being paid an amount that is below the industry average in your country?
Step 1: Understand how your salary is calculated
Firstly, it makes sense to properly understand how salaries are calculated.
There are nine main areas that hiring organisations take into account when figuring out what to pay their new employees:
- Hiring Budget: How much money does the organisation have at its disposal for each specific hire? This includes all the potential costs involved, on top of the salary.
- Type of Employment: The cost of making a permanent hire will differ to the cost of hiring a contractor. Your type of employment will influence the remuneration you receive.
Average Salaries: Most organisations will benchmark what they offer new employees against the industry average. They often obtain that figure by using salary guides and speaking to recruiters.
- Education & Experience: The more experienced you are, and if you have relevant qualifications, then you are more likely to be at the upper end of the salary bracket for your position.
- Industry: Salaries for essentially the same role but in different industries can vary enormously. How valuable the role is to your industry will dictate how much you are paid.
- Location: Where you are based for work plays a role in your salary. Employers take ‘cost of living’ into account, so salaries in metropolitan areas are often higher than in rural locations.
- In-demand Skill Sets: Companies have shifted to a more skills-based hiring approach. If you have niche skills that are presently in demand, you’re likely to be of more value to an employer and therefore can command a higher salary.
- Supply & Demand: Similar to above, but more around the current situation rather than your skills, if your expertise is particularly relevant at the time of hiring, there’s a good chance you could be offered an above average salary.
- Perks & Benefits: If you are offered a significant benefits package, it can impact your remuneration. The monetary costs involved with benefits are incorporated into the total compensation package.
Now you have a bit more of an understanding around how your current (or prospective) employer calculates how much to pay you. If that amount - as revealed by a salary comparison - turns out to be unsatisfactory when considered against industry averages, what do you do next?
Step 2: Speak to a ‘salary coach’
Don’t worry, this isn’t an additional resource you need to find; it’s merely someone who can provide guidance around how you can figure out how to earn more.
In other words, you want to speak to a recruiter, a mentor, or someone more senior than yourself in your area of expertise.
You may want to elicit the assistance of a salary coach when:
- You’ve been offered a new role with a new employer
- You feel a raise is warranted in your current job
- You’re taking on a new role or more responsibilities at the same company
Once you’ve done a thorough salary comparison, a ‘salary coach’ will give you an external perspective that can help you recognise the true value you bring to your role and your organisation as a whole. Not only that, but they will guide you on how to effectively communicate that value back in a discussion.
Recruiters, in particular, are a priceless asset here. They speak to multiple people across their specific industry on a daily basis, so they know more about what companies are paying their employees than most.
Recruiters know the typical responses managers give to refuse a pay rise request and how you can combat them.
Asking for more money can be an awkward conversation to have. It’s one of the main reasons why professionals stagnate in their current roles and become irritated with their remuneration package, often resulting in them applying for new jobs.
Speaking to a ‘salary coach’ will better equip you for that potentially tricky conversation and hopefully get you the outcome you deserve!
Step 3: Work your way up to a higher salary
If you have increased your responsibilities and can prove the additional value you have already brought to the business, then there’s a chance that you may get the increase you want.
But in many cases, it’s sadly not as straightforward as simply carrying out a salary comparison, asking for more money, and then receiving it; you will probably be given targets to reach and goals to achieve in order to earn your raise. Obviously these will vary depending on your job, but often they will be around:
- Generating more revenue for the business
- Winning new clients
- Better equipping your teams with skills and knowledge
- Optimising business processes to increase efficiency
Alongside the goals outlined by your manager or employer, there are a few proactive steps you can take, such as offering to help outside your remit, getting involved in the training/upskilling of other employees, and professionally developing yourself with new interpersonal skills and technical abilities - to name just a few.
Bonus Step: Negotiating non-financial rewards
In certain instances, your company might be in a financial position where they genuinely can’t offer you a pay rise. Sometimes, that’s just the way it is.
This can be disheartening and may drive you to look for another role (or drop out of the hiring process if it is for a new job), but it pays to remember that there are other aspects of your compensation package that they might be able to be more flexible with.
Flexibility around working hours, additional annual leave, funded training/professional development, and additional benefits to choose from are all relatively common ways that an organisation can soften the blow of not being able to increase an employee’s salary.
Think about what’s important to you and whether there is anything besides money that would make you more content in your role.
There is a lot of value in knowing what you’re worth...
It’s a shrewd move to regularly undertake a salary comparison so you keep up-to-date with whether there have been any significant changes to what people are being paid in your particular area of expertise.
Not only does it help you ensure you’re being paid fairly for the work you do, but it displays you’re aware of what’s going on in your market - which is often highly valued by employers.