Ask the Headhunter: Why am I paid less than new hires?
In this special Making Sense edition of Ask The Headhunter, Nick shares insider advice and contrarian methods about winning and keeping the right job, on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards, or salary negotiations. No guarantees — just a promise to do his best to offer useful advice.
Question: I work at a health company near my home. My salary is below industry average, but whenever I bring this up, I get the usual, "We checked around this area and that is standard pay for what you are doing."
I think that's a ridiculous answer when, without me, they would be spending thousands on an outside web design company to update our site, or they'd need to hire a much more experienced and expensive web designer. I know they are paying top dollar to attract people from the higher-paying surrounding areas. Why is it OK to pay those new hires a premium, but not to pay us "locals" according to our skills? I like being close to home and not worrying about the commute and hate the idea of having to start over again only to get more money. How do I work around this?
Nick Corcodilos: The only way to find out what you're really worth is to put yourself on the block: Look for another job in another company. It's hard to tell whether your employer is being honest with you about local salaries. It may be relying on salary surveys, which I don't think are a valid way to price a job. (See "Salary Surveys: Know when to fold 'em.")
You don't really know what your company would do to replace the services you provide. Would they hire a more expensive developer, use a consultant, or hire someone right out of school to save money? So don't make assumptions.
If there's a lack of qualified workers in your area, your company may be forced to pay more to bring them in. You may be caught in the company's fiscal problems, and the only way to make what you think you're worth is to go to another employer.
Some companies hire junior workers, train them, and keep them at low pay until they leave. There is no career path. They just want cheap labor. (They may hire higher-priced labor only when absolutely necessary.) In other words, they may expect you're going to leave, and they may be willing to take their chances with new, cheap hires.
Ask your boss about your career track for the next three years, and how much money you can earn based on what you can do for the company. Ultimately, you may have to choose between this job and an unknown job with a longer commute. Make some intelligent guesses about the future, and make a choice. Remember that sometimes you've got to reduce your comfort (e.g., travel time, quality of life) at some points in your life if you want to get ahead.
When you talk with a new employer, be prepared to deal with a similar problem. If a company relies on salary surveys, you need to know how to "negotiate around the surveys." This article should help: "Beat The Salary Surveys: Get a higher job offer."
Dear Readers: Do you find that you earn less than new hires who do a similar job? How would you advise this reader to negotiate an equitable salary?
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