Americans' financial priorities changed during the pandemic and they want their salary to reflect their new circumstances. Nearly 80% of U.S. workers think they're underpaid, according to a recent poll from Business.org, and that more money could help them meet their needs. Researchers surveyed 700 adults about their income in July.
While it's not always easy to determine if your pay is fair, it can be valuable to find out: Workers who are underpaid and don't negotiate their salary could lose out on more than $600,000 over the life of their career, according to a study from George Mason University and Temple University.
That's because when you get a cost-of-living bump or pay increase, "the annual salary percentage increase builds upon your current salary, says Vicki Salemi, a careers expert at Monster. So if your annual salary is $75,000 and you get a 5% increase, but your similarly skilled colleagues are earning $80,000 and getting a 5% increase, "every year you're still behind, and that continues."
Here's how to determine if your salary is too low — and how to ask for more money.
Start by setting realistic expectations of what someone in your position earns. You can weigh your market value against people in similar roles using a salary calculator, and search average salaries in different cities using tools from websites like Glassdoor and LinkedIn.
The human resources department at your company could also give you a specific pay range for your job. And asking your coworkers what they make could give you some insight, too.
Video by Mariam Abdallah
This of course "depends on your comfort level and the relationships you have with your colleagues," Salemi says. But "if you trust each other, if you can be open."
"If it's a peer you previously worked with" she says, "you can add something like, 'I'm not trying to be intrusive and asking you what you're paid, rather, if you were hiring me to your team, do you know what my starting salary would be?'"
To make the conversation less formal, you can indicate that it will be kept confidential.
A pay raise may already be on its way. As more companies bring employees back, corporate budgets are recovering. U.S. employers project average salary hikes of 3% for executives, management and professional employees, and support staff in 2022, per data from benefits consulting firm Willis Towers Watson. The average bump for 2021 was 2.7%.
Many companies conduct salary market research to classify jobs, pay ranges and grades, and may make adjustments based on discrepancies, explains Salemi.
Still, while most companies work to ensure pay classifications and ranges compensate their workers fairly, "don't rely on your employer to true you up and closely check similar positions against each other, to then make adjustments. It's important to be proactive and have your own back."
If you discover that you're not being paid fairly, don't ignore it. Gather some evidence that shows off your accomplishments and growth. Keeping a detailed log of your major contributions can help lay the argument for why you deserve more.
When you set up a time to talk with your boss, try to schedule it around a time when you've done something good, like when "you've more than added value since you've been in the company, and your talents and your experience are worth more than you're getting paid," Maggie Mistal, a career consultant and executive coach, recently told Grow.
Video by Courtney Stith
And be creative with your ask. Not every employer will be able to accommodate higher pay coming off the Covid crisis. Ask about perks and benefits like additional vacation time or a flexible schedule. Of the respondents in the Business.org poll, many said they would sacrifice higher pay for better health care (72%), paid time off (51%), work-life balance (38%), and retirement contributions (45%).
"It's more challenging to negotiate health benefits and things like an increased 401(k) match because those things are more involved with systems and harder to make exceptions," says Salemi. But you "can negotiate a sign-on bonus, flexible work arrangements, additional paid time off, tuition reimbursement, and more. Prioritize what's most important to you."
If your bid for a raise fails, use the opportunity to learn how you can improve. And if you find that your employer does not appreciate your value, it may be time to look for another opportunity.
"The good news throughout all of this is, you know your worth and you're speaking up for yourself," Salemi says. "It's a job seeker's market and employers are competing for top talent. If your current employer doesn't value you, chances are an external employer will."
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