You are a smart, driven individual. You have done well for yourself so far but have hit a plateau and can’t seem to get past it. You want to ask for a raise, but you’re not sure if you’re worth a pay hike to your company. How do you figure out what you’re worth?
I’ve been at my job for two years now. I know how to do my job and I think I do it well. Since I started, I also took on more responsibilities, but I haven’t had any pay increases. I thought I would get one at my last review, but I got nothing beyond the cost of living adjustment. How do I know if I should ask for a raise?
Salaries are set by a few factors. The most obvious one is the market rate for your position. You have a job title, and companies within your industry hire people with that job title (e.g. account manager, software developer, and accountant). It’s simple supply and demand economics. The employees are the supply and the companies are the demand. Eventually they meet at some salary point.
But of course, no market is that simple so it gets more complicated when you factor in job skills. A software developer with 20 years of experience will get paid more than a software developer with 2 years of experience because the former presumably has more skills to add more value to the company.
But how do you know the exact numbers of what you’re worth?
Get out and talk to people
If you know a lot of people in your industry, you could ask them what the career path and salary expectations are at different levels of the corporate ladder. Unfortunately, the people with large networks in the industry tend to already know what they’re worth so here’s another method.
Find the Dementors of Azkaban recruiters in your industry and ask them what they think you can get on the job market! If you don’t know any recruiters, setup a LinkedIn profile and they’ll find you. Or you can look at your older colleague’s LinkedIn connections and see if they are connected to any recruiters. The recruiters will definitely try to sell you a little bit since you moving companies will get them a big payday. However, as you hear what job titles and companies have openings that fit your skills, you’ll also hear the salary ranges for those positions.
If your current salary consistently falls in the range of the open job positions, you’re paid what you’re worth. If your current salary is below the range, you’re a good candidate to ask for a raise or move companies. If the recruiters are asking you to interview for positions that would be a promotion for you, you are a good candidate to ask for a promotion and the raise that comes along with it.
If your current salary is above the salary range the recruiters are telling you, close your internet browser, stop thinking about a raise, and get back to work!
Use an online job board
Online job boards are good sources too. There are a fair number of job boards where you can browse job titles, skills required, and other factors that give a salary range. Take a look at job posting on glassdoor.com, salary.com, indeed.com, and any job boards specifically for your industry. For instance, the Hacker News job board is a good place to look for startup employees. You can make an educated guess about your salary range from these job postings.
Unfortunately, there aren’t many investment banking and management consulting job posts online. The harder your field is to break into (i.e. industries recruiting mostly from college graduates), the less likely this option will work for you. But it’s a good place to start since you can look while wearing your PJs at home.
Use a salary estimator online
Glassdoor.com, salary.com, and indeed.com have a lot of data to support their salary ranges, especially if you work at a large company. No matter what size your company is, I recommend you enter your information into their salary estimator tools which will give you a great salary estimate for your job title, industry, location, company, years of experience, and education level.
Also take a look at the salary ranges for other companies in your industry. If you work at Google, you may also want to look at salaries for your position at Facebook, Apple, Microsoft, and other large public technology companies. Do something similar for your industry and location.
Find what you’re worth in the job market by following these techniques. You may also find my article about negotiating your salary during a job interview helpful: They asked me what salary I want in an interview. What should I say?