Know Your Worth!!

Date March 26, 2018 Author mymwalimu Category Career Advice, Financial Advice for the Career, Think Like a Business Owner

I don’t get out of bed for less than $10,000 a day – Linda Evangelista

That quote from Linda Evangelista may sound arrogant, but it’s not.  In the 1990s, she was one of the most recognizable and in-demand supermodels.  When she made that statement, she knew that she could demand top dollar for modeling jobs and get it.  By getting top dollar, her value stayed high.

Unfortunately, many workers don’t know their market worth in the marketplace.  I’ve seen three reasons why a person takes a position that pays below their market value:

1. They don’t know any better
2. They don’t want to make the potential boss angry and lose their chance at the job
3. They desperately need the job so they can keep a roof over their head and food on the table

Reason 1: They Don’t Know Any Better

I’m surprised at the number of people who really don’t understand the labor marketplace and the average salaries for position, experience and location.  I have two perfect examples:

1. When I lived in Pittsburgh, I worked with a person who took a job in Boston for a 5% raise on what he was making now.  The problem? The cost of living in Boston is 56% higher than the cost of living in Pittsburgh, so the person took a SIGNIFICANT PAY CUT.  Unfortunately, the person wasn’t aware of this.
2. This was my experience.  Shortly after college, I started out in the workforce.  Unfortunately I had no idea of the market value for an entry-level developer, so I ended up taking a salary that was only 73% of the average starting salary for someone with my experience and education.

Now all of this happened in the early 1990s, so I can understand that getting that information will be a little more difficult.  However, with the information age, there’s no excuse.  It’s easy to do a cost of living comparison and a salary market value on-line.  When negotiating for a salary, it’s good to come to the table armed with that information.

Why?

1. The hard truth is a company is going to try to offer you a lower salary to help keep costs down.  It’s not that they’re mean people.  After all, don’t you try to find the best bargain to help save money?  If you don’t know what the market value is, the company will more than likely offer you a lower salary than the actual market value.
2. Some companies may not have an understanding of the market values, so they underestimate the salary in the budget.  If that’s the case, then you don’t have to waste your time and the company’s time with going through the interviewing process for the job.
3. On the other side, you don’t want to price yourself out of a job with ridiculous salary expectations.  For example, a customer service representative in Florida is NOT going to make $90,000 a year, nor is an entry-level tech support person in Florida going to make $120,000 a year.   I can’t tell you how many of my former students had unrealistic expectations of the job market when they graduated from school.  Many of them expected to start out at $100,000+/year – in Pittsburgh, which has one of the lowest cost of living among the major metropolitan areas!

So where do you get the information?

1. To get an understanding of what the average salary is for your position, experience and location, Glassdoor.com (https://www.glassdoor.com/Salaries/index.htm) has a great tool that gives you the average salary based on title and location.
2. If you’re looking to move to another major metropolitan area, get an understanding of the cost of living so you can make a fair offer without accidentally giving yourself a pay cut.  I added a link below to a cost of living comparing tool from NerdWallet so you can understand how much you need to make in a particular city.

Reason 2: They Don’t Want to Make the Potential Boss Angry and Lose Their Chance at the Job

I’ve seen too many examples of this.

People (especially women) know that the offer isn’t fair, but they don’t want to speak up.  They want to be nice.  They want to be liked.

Being liked is great, but likes aren’t going to pay my bills.

When a company asks your salary expectations, don’t try to “be nice” – give a number that’s comparable to what other companies are paying for the same position.  If the company won’t offer you that, think about this quote from Bjorn Furuknap:

A sure-fire way to demotivate someone completely, regardless of pay level, is to tell them that they’re not worth what they produce in value. If you want me to work cheaper, you’re saying that I’m not worth what I give back.

It’s very important to get paid what you’re worth.  The harsh reality is if you work for less than what the market value is for your position, you lose your value in the marketplace.  A potential employer reasons that you’re willing and able to work for much less than the value, so that employer can low-ball you in the salary offer.

I know what your thinking…HR experts advise you to not reveal what you’re making in the interviewing process so you don’t get low-balled.  However, you better know the market value for the position and mention it for your salary expectations. Why? Well, I have a little secret to tell you.  Most companies have a salary range for a position.  If you are being considered for an offer, the company will call your previous employers, who will reveal the following information: your start date, your end date, if they would hire you again, and…your salary when you left the company. If the company knows that you worked for less than market value for a long period of time, more often than not, they are going to offer you the low end of the salary range.  If the low end is less than what you’re asking for, they’ll give you an excuse such as, “I know that you asked for X dollars, but unfortunately we don’t have it in the budget, so we can offer you Y dollars”.

So what if the salary is lower than market value but you want the job? I’ve seen companies that don’t pay market value but they offer out-of-this-world benefits that counterbalance the lower salary.  It depends on what you’re looking for in your career and life, AND whether the total cost of the salary and benefits are at or above market value.  Here’s an example – I worked for an airline.  While the salary was lower than industry standards, the benefits could not be beat – FREE full coverage health and dental insurance (no co-pays, no “pre-authorization” nonsense), FREE coach flights and $15 first class flights (on standby, but still…), FREE AND CLEAR tuition reimbursement, and COMPANY CONTRIBUTING to your 401K (3% of your salary) and MATCHING your own contributions (up to 6% of your contributed amount).  If I added the cost of the benefits to my take-home salary, I was actually getting well above my market value.

Reason 3: They Desperately Need the Job So They Can Keep a Roof Over Their Head and Food on the Table

I totally understand this situation, especially after the Dot Com Bubble Burst of 2000 and Great Recession of 2008.  Many people during those times completely wiped out their savings and unemployment benefits, so they had to take what they can get to keep their heads above water.  However, that doesn’t mean that a person should give up the search for a more fair market position.

The truth is that most employers looking to fill positions will consider someone who already has a job over someone who hasn’t been working for a few months.  Even if the person is working at a position that’s below the market value, it makes it easier to find a better paying position because one is already employed.

If you really like the company, look within the company for different positions that pay better, or better yet, after 6 months, talk to your boss about restructuring your salary to better your pay.

If there isn’t any opportunities in the company, or if you’re not satisfied in your current position, continue looking.

As I mentioned in reason #2 – if you work in a lower paying position for too long, you’ll start losing your marketplace value.  A potential company will see that you were willing to work at a lower rate for a long time, so that company will low-ball your salary offer.

Additional resources:

Salary.com – Knowing What You’re Worth

Flexjobs.com – How to Research the Fair Market Value of a Job

Nerdwallet.com – Cost of Living City Comparison Calculator

Tags: Career Advice, Career Killers, managing career