Are You Getting Paid a Market Salary?
Posted by Saundra Lee on Thu, Aug 25, 2011 @ 04:38 AM
There are few phrases I dislike more than “getting paid what your worth.” Let’s get one thing straight, your salary market value has NOTHING to do with your worth!
Salaries do not define who we are or what we are worth….just ask a teacher.
The best way to think about your salary market value is like the stock market.
Say, for instance, that you want to by AAPL (Apple Inc) and see you that the stock price is $370 per share.
- If you feel it is worth more, you will by it today.
- If you feel it is worth less, you will by it when the price is BELOW what you feel it is worth.
The price we pay for the stock is dictated by the market in much the same way as our salaries.
Just because supply and demand has lowered your salary market value does not mean that suddenly you are less successful now than you were 2 years ago. If you see this lower demand continuing, change or beef up your skill set.
- Not willing to take 1 step back to take 2 steps forward for financial reasons is what I call penny wise and pound foolish.
- Not willing to take 1 step back to take 2 steps forward because of what people will think is just foolish.
Salaries use a few more variables than just how many buyers vs. sellers to determine the market value.
Here are the top 4 considerations when determining salaries.
1. Internal Equity.
Even if a company has, across the board, lower than market salaries for its employees, it cannot make it up one at a time. They are asking for trouble if they bring someone in to do a job at a higher salary than that of his/her exact peers with the same education and years of experience. There are many reasons why a company will pay lower than market salaries including:
- Above market benefits,
- Internal growth opportunities
- Any other reason people would rather work at that company than other companies.
Botton line, lower than market salaries could be because it is an amazing company, everybody wants to work there and they have a very low turnover rate or because it is not such a great company they do not place much value on human capital.
2. Most current salary leverage.
If your last salary was less than market, than it will take some explaining as to why. The hiring company has no idea why, other than your word or the word of your references as to why your salary was below market. Most companies will want to stay closer to what you were making and make adjustments later after they see your performance in action.
3. Supply and demand for your skill set.
If you have 5 companies courting you to work for them than your overall leverage is increased. This is where you can push the boundaries on internal equity and most current salary. Most likely there will be significant data to show the slim availability of your skill set and offers can be signed off on quickly.
4. The perfect fit scenario.
If a company has a very unique wish list for a particular job opportunity that almost does not occur naturally in nature (Recruiters call this "looking for a 'purple squirrel'”) and you are that “purple squirrel”, well, HELLO LEVERAGE!
In your career, keep the big picture in mind and your overall career strategy. Remember, just like the stock. You have made up your mind to buy AAPL because it is a great addition to your portfolio and you believe in the company AND it is a good value for the price.
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Posted by:Saundra LeePresident, Dubin & Lee