How to estimate your job’s value in the market?
With the current levels of inflation and against the back drop of the pandemic people may be understandably looking at their current earnings as they review their career and wondering where they sit in the market.
At times we all feel we are not paid enough for the job that we do, or assume that there will be others that are being paid more but how do you know if you are being paid the going rate and what is your real worth in the market? While some parts of the market have been quite buoyant other parts definitely have not this has led to quite a variation in the amount salaries have moved over the last couple of years.
I should start by saying that there is no easy answer to this question. Partly because roles are always slightly different so comparing them can be very difficult. In its most basic form, the salary you receive is what the company perceives is acceptable. In many cases this may bear no relationship to national averages, industry averages, or with what anyone else in your company is being paid. In reality what you are paid will largely depend on the company you’re working for and how it approaches salary structures. It may be their philosophy is to ensure they keep their best talent or perhaps to pay the lowest they can get away with and of course their approach may naturally be affected by how the company is performing.
So how can you try and determine your market worth?
Compare the market
One of the more accurate ways to establish your worth and the market rate is by analysing some market data. For instance, this could take the form of looking for job adverts for similar roles to identify the salaries that are advertised. As you can appreciate this not an exact science as the salaries offered may well differ from those being advertised and the exact scope and responsibilities of the roles may differ. However this tactic should certainly give you a good feel. The other method of comparing the market is to look at salary surveys from your sector – these are widely available, often compiled by specialist recruiters and can be identified by a quick search online. However, these are often very generic and may not detail the specific role that you perform. Combining this research will certainly give you the best chance of understanding where you sit in the market.
Company culture
As mentioned above, your company’s attitude to compensation and reward is likely to be a significant factor in whether you are paid the going rate for the role you are performing. You are likely to have a feel for this from how it manages and communicates its reward structure. Your company is also likely to have a reputation in the market and whether that is for great culture, great pay, great benefits or perhaps quite the opposite. Either way you are likely to have a gut feel about where you stand.
In it for the long term
As part of your consideration it is also important to look at what the future might hold for your company and your future potential earnings. When companies are doing well and are optimistic about the future they tend to pay more than when times are tough. If your company has a meritocratic culture where success is rewarded then it is likely that if you perform you will enjoy considerable salary growth over time. Even if you feel in the short term you are not being fairly rewarded it is important you take the medium and long term into consideration. It really might not be worth moving roles now for an extra 2or 3 thousand pounds when the prospects of career development are strong. Indeed promotion is the clearly the best way to increase your earnings.
It’s all about the package
The most important element to considering your market worth is to look beyond your basic salary to the overall package that you receive. In my experience benefits packages can vary enormously from company to company and it is really important that the other elements of your remuneration are taken into consideration. Other factors such as pension contribution, bonus schemes, share options etc. can have a considerable impact on your overall earnings and need to be factored in. It is often worth breaking down each element and placing on a spreadsheet to establish the overall value of your package.
Talk to the experts
Specialist Recruiters and headhunters have a unique insight into the market. They are arguably better qualified than most to provide you with an accurate picture of how well you are remunerated for the role that you do in comparison to other people in the market. They are talking to candidates day in day out and will have a feel for where salaries are going. It is worth using relationships you have to try and establish where you are financially positioned in the market.
Know the market
Individuals in your sector are likely to be able to add to the market knowledge you will have gathered. People find it awkward to ask friends, co-workers or former co-workers, but it's often an effective way to find out what the average salaries are within your specialist field. Just be careful, particularly internally, talking to those you know very well. Make sure you ask them for a range for a particular job and not what they are currently earning. That way you are likely to get a more accurate feel.
What if you feel you are underpaid
If you discover through research that you are not being paid anything close to the market rate for the role you are performing you have several choices. One is to keep quiet and look for a new job where you will likely be offered a higher salary. You can keep quiet and keep the job you have, hoping your employer will eventually reward you for the role you are doing. Or, of course you can choose to talk to your employer about what you now know. I plan to cover this subject in a future blog but clearly any such conversation needs to be very well thought through and handled in the right way particularly given the current economic picture.