Managing those ever-tricky money matters, continued
Why are your colleagues making more than you? How should you negotiate for a higher salary during your reviews? Should you push for a counter-offer? These questions are answered here
This month we respond again to questions about money: how is it that everyone makes more than me? how do I negotiate more during reviews? should I seek a counter-offer to boost my position? Co-authored with Mark Mangan. (2,600 words)
"Nancy," a new hire whom I trained for a lower-level job than mine, has almost no technology experience (she was a travel agent!), and she has the same salary as I had before my recent promotion to supervisor. I have eight years in the field. The other eight folks in the same job as "Nancy" had salaries all over the board! What can I do about this unfair situation?
Ethical, Underpaid Manager
Unfortunately, there are no trick answers or secret keys to getting yourself a good, or even fair, salary. Ultimately, the company that you work for wants to pay you the least that it can and still keep you happy and hardworking. And you want the sky...or at least as much as you can possibly get for yourself.
Based on what you've done and on what your friends make, you have an idea of what you'll accept. Based on what you made before and how much they think they need you, the company comes up with a figure that it is willing to pay. Somewhere in between all this is the salary you eventually end up with. This number can depend on many factors and often seems linked to some complex logic or company-wide conspiracy. In reality, it's more often than not like a negotiation at a market.
Take this hypothetical scenario:
Let's say you go over to the big weekend flea market uptown in a quest for some things for your new place. After looking around for about an hour you find the perfect lamp. The man selling it is an old guy with a beard and a scowl. He looks like he could care less whether he sells any of his crap. But you are eyeing the lamp, and it's definitely not crap.
Sitting majestically on his center table, surrounded by knobs, screws, and nylon flowers is a beautiful green and orange Elvis Presley cocktail lounge lamp. It's in near mint condition and would fit perfectly in your redecorated living room, just under your poster of Captain Kirk in a standoff with the Klingons. The problem is, you have 30 bucks to spend, and this guy wants 40. You get a little anxious and pull out your bills. You actually have $100 on you, but had decided that you absolutely didn't want to go over $30. You see that he doesn't have any others like it, and someone is eyeing it as well.
You try haggling, then feign interest in some of his other things. He eventually walks over to deal with some other customers, and before you know it, you hand the guy $40 and walk home with this new lamp -- with a smile on your face. Who knows...it might even be a valuable collector's item worth far more than what you paid. You make a mental note to check your Graceland catalog when you get home.
A month later you go over to your friend Sammy's house, and the first thing that catches your eye is the same beautiful green and orange Elvis Presley cocktail lounge lamp, right there on his coffee table. Where did you get that, you ask. Oh that? I picked it up at the flea market uptown. It was a deal...20 bucks.
20 bucks?! How could that be? The old bearded huckster had ripped you off -- no two ways about it. At that moment you have half a mind to race back up there and get your money back. It's outrageous that he could squeeze you for $40 when he was giving them away to knuckleheads like Sammy for $20.
For days you look over at your expensive lamp and think of the injustice. Sammy's got loads of money and pays top dollar for everything. Besides, you have a couple years of sales experience, whereas he's an accountant who sits in the back room with a calculator.
How did this happen?
In this flurry of anger and anxiety you've washed from your mind the circumstances surrounding the sale. You've lost sight of the fact that your face glowed when you first picked up the lamp. You hadn't been to a flea market in years and that, too, showed. The old man had only one lamp, but two good eyes, and knew full well there was at least one guy in every weekend crowd who would just have to have it. And when you pulled out your wad of cash, he actually slapped himself for not telling you it was $100 at the onset.
Sammy, on the other hand, was cutting through the market near closing time. He saw the the same man packing a bunch of these Elvis lamps into a box. The old guy had just gotten a hold of a dozen more and at the new price of $50 a piece there were no takers. Sammy asked how much. The man said $35. Sammy reached into his pocket and pulled out all he had, a twenty. I'll give you twenty, he said. The old man looked at the lamp and then the bill. He had only paid $15 for them and this was one less to carry. Done deal.
Where's the justice?
In a perfect world there should be more justice to jobs and salaries than the haggling over Elvis Presley lamps at flea markets. But whether we like it or not, human resources follows the law of supply and demand in much the same way that other goods and services do. And regardless of the nature of a deal, there are always the nuances of skill, character, desire, and bluffing.
A certain company is expanding its network when boom all the systems go down. The person administering them quits. Certain major deals are hanging by a thread, and all the Web servers and mail servers are down. A juniorish sysadmin then comes into town. He doesn't have years of experience on every platform, but says he knows these systems and can get everything back on track. He was making $45K. He wants $70K. They give it to him.
Six months later you come to the same company. They are looking for a senior sysadmin. You have over 10 years experience on Unix systems and are going to help them roll out new boxes and administer a new heterogeneous environment. You were making $50K before. You ask for $65K. They give you $60. That's pretty fair, you think. And you like the job. You take it.
Six months after that you are going up for review when you find that there's a more junior punk who's making $10K more than you. It's absolutely absurd! So you write an e-mail to Edgar Saadi.
First, let me state that I really love my job and the law firm I
work for. The work is challenging, the people are nice and treat me
with respect, and I have no wish to change jobs...[But] I have
worked for the past year at a salary I feel is considerably below
true market value. They are getting quite a bargain with me. Now,
I am approaching my year anniversary. I know that my performance
review will be fine -- my immediate supervisor and the partners
of the firm have been very generous with their praise for my
accomplishments during the past year. How can I handle the salary
negotiations under these circumstances? They like me; I like them;
but, I do feel that I am not being adequately compensated.
First, let me state that I really love my job and the law firm I work for. The work is challenging, the people are nice and treat me with respect, and I have no wish to change jobs...[But] I have worked for the past year at a salary I feel is considerably below true market value. They are getting quite a bargain with me. Now, I am approaching my year anniversary. I know that my performance review will be fine -- my immediate supervisor and the partners of the firm have been very generous with their praise for my accomplishments during the past year. How can I handle the salary negotiations under these circumstances? They like me; I like them; but, I do feel that I am not being adequately compensated.
Dear Worth More,
Sometimes you look for a job, get an offer, take it, start work, and everything works out perfectly. You find the projects interesting. They give you more responsibility, and your career seems to be skyrocketing. Then you realize that the things you are now doing are not commensurate with your pay. You took the salary you have now to get your foot in the door or maybe because the job description was different and more simple. Now things are different.
Their point of view
Keep two things in mind. First, employers often see experience as a form of pay. If they are giving you lots of new technologies to play with and more responsibility they are ultimately helping your career, if not necessarily your current bank statements. Second, one year is not a long time. They want to see how you age at the company and be sure that you're not just a flash in the pan. Besides, if they give you a 20 percent increase now, you'll be back for 20 percent more next year. They want to manage your expectations.
Present your side of the story
Let it be known that you intend to stay at this company for a long time, but feel that the money you're making does not reflect the industry standard. And though you do not expect a huge jump every year, you feel that your work merits a sizable increase, as an act of good faith on their part. If they refuse to give you near what you expect, I would suggest taking a slightly different route and asking that your contract be reworked to include a year-end bonus. By doing this, you're telling them that you will give a repeat performance and expect to be rewarded for it.
What do yo do when you find out your rate is 70 percent that of
other contract companies? I'm a contractor working as a Unix
sysadmin in a top aerospace corp. How do I convince management to
give me a high increase in salary? The rate I'm getting is
good for this location, the Philly burbs, but other members in the
group came in at NYC rates. I'm not sure if the billing rates are
the same, and I'm just being suckered, or that my rep took the
Philly rate and didn't know.
What do yo do when you find out your rate is 70 percent that of other contract companies? I'm a contractor working as a Unix sysadmin in a top aerospace corp. How do I convince management to give me a high increase in salary? The rate I'm getting is good for this location, the Philly burbs, but other members in the group came in at NYC rates. I'm not sure if the billing rates are the same, and I'm just being suckered, or that my rep took the Philly rate and didn't know.
As I explained in the episodes above, there are often many reasons why some are paid more than others. And if you are a contractor, you must know that pay rates can really fluctuate. You are brought onto a site when your expertise is in need. The others may have come in when there was a flat-out crisis. Maybe they are more senior than you. Or maybe they simply better understood how to negotiate when they came on board. You can't really expect management to pay out the highest rate to everyone in the same class. (Though it would be nice and fair if they did.)
In any case, if you know what they are being paid, and it's much higher than what you're getting, and you are doing the same work as they are, and you are determined to even things up, then your only recourse is to approach management. Tell them that you deserve more. But, be aware that all in life is not fair and much depends on the situation. If, for example, they think they are paying all their sysadmins too much and are looking for an opportunity to pick up some young, hungry blood, they may not greet your ultimatum with a raise. I'm not saying you have to concede anything; just be careful to be diplomatic. These are your employers, after all, and whether or not you stay for a long time, you want this experience to sit well on your resume.
What's the best thing to do if you have pending offers and don't want
to burn bridges? I have a good idea, and I have consulted various
resources. I would be interested in hearing your response and method to
maximize resolution on both sides.
What's the best thing to do if you have pending offers and don't want to burn bridges? I have a good idea, and I have consulted various resources. I would be interested in hearing your response and method to maximize resolution on both sides.
This is a very general question. The best way to go about this is to choose the best offer, then graciously decline everywhere else. You may be able to use the leverage of the other offers to get more money, but if your main interest is not fouling up relationships, I wouldn't play this card too hard.
Mr. Ethical and Underpaid, who was quoted at the top of this article, goes on to describe further complexities in his situation:
I was confused until I started doing people's annual salary reviews and found the pattern: this company gives you a good salary only if (a) they are hurting for people to fulfill a customer contract, and then they pay whatever it takes to get warm bodies in the door (never mind that they don't have experience); or (b) they practically EXPECT to make counter-offers. I was told "we work WITH employees when they get another offer to help them stay." I was even told this is true for managers. (Are they hinting?) Of my 31 report-tos, 10 have had huge (30 to 60 percent increase) counter-offers. Yes, these are the 10 highest-paid folks reporting to me.
I dislike the ethics of this. The gist is that ethical employees who don't play the counter-offer game are paid less for more longevity with the company! I've never accepted a counter-offer, and I agree with your advice to avoid counter-offers, but now I'm in being told (indirectly) that I should resign to get a reasonable salary through a counter-offer.
Do I play their game and let them counter-offer, (I like non-salary benefits, working conditions, etc.) The only thing missing is that my salary is 35 percent lower than it should be. Have I been playing into their hands all along?
Explore the job market
If you really think you are being paid less than you feel you are worth and are worried that your company does not recognize this, my advice is to clean up your resume, talk to a recruiter, find the time for an interview or two and see what the market says. You might be worth a lot more. Maybe there are some companies that desperately need a person with your expertise. Maybe your company loves your work, but can still afford to lose you. Maybe they're just cheap. Regardless, when it comes time to do a review, you will sit more comfortably if you know that you are being sought elsewhere and whatever they offer you, you can take it or leave it. That confidence will show.
Do not rely on a counter-offer
I would not, however, say that you are leaving as a sort of bluff. Mr. Underpaid, you seem to have figured out the way things work where you are and may even have a unique grasp on a unique situation, but I reiterate what I've said in previous articles: the acceptance of another job means that you have exhausted your patience with your current company; you feel that you are not being paid or treated as you should; and you want to leave. You may want to say that you are considering moving on and reemphasize that you feel you should be better compensated. But, when you accept an offer and then take a counter-offer, you breach the trust of your employer and throw your true loyalties into question.
If you want more money, know your limits, keep your options open, stay on good terms with your superiors, and most of all, when it comes time for review, let it be known that you are worth more. In the end there are no real tricks, just hard work and a well managed career.
Edgar Saadi is senior vice president for Pencom Systems Inc., the largest open systems/advanced systems recruiting firm in the U.S. He specializes in guiding advanced systems careers and helping employees explore all staffing alternatives.
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