Do you think you’re underpaid? Here’s what you can do
When you trust your employer it’s quite normal to assume you’re being paid at a fair market rate, and then something makes you reconsider whether you’re being paid enough. This might be through finding out about a colleague’s salary or seeing similar external jobs that promise a higher salary.
If you think you’re being underpaid, you can investigate this without upsetting your employer, losing your job or having to move somewhere new.
For employers, ensuring that employees are compensated equitably is not just a matter of compliance or ethics—it’s essential for fostering a positive workplace culture, attracting and retaining talent, and enhancing overall organizational performance.
The concept of equal pay
Pay fairness, or pay equity, refers to the principle that employees should be compensated equally for performing work of equal value, regardless of gender, race, age, or other personal characteristics. This concept encompasses both external equity, which compares an employee’s pay to the market rate for similar jobs, and internal equity, which assesses whether employees within the same organization are paid fairly in relation to each other.
Pay inequity can have far-reaching consequences, affecting not only individual employees but also the broader organization and society at large. Some key impacts include employee morale, motivation, talent attraction and retention, company reputational risk and potential legal challenges.
Transparent pay levels
If you work in an organization with transparency regarding pay levels, it’s pretty straightforward to see your pay level compared to others. However, often, this is not the case, and you can spend too much time and energy speculating whether you’re paid fairly yet have little transparency or knowledge of how to find out.
While one option is to challenge your manager and demand to know if you are being paid fairly for your job, this approach will do little for your relationship and reputation or potentially provide any solution. Instead, research is key. How can you possibly have a successful conversation with your manager about your pay if you have no idea what pay looks like in the wider market?
And what does being underpaid actually mean? This is the kind of information you need to find out. You may discover you’re paid above the market rate or something similar. It could be that you are paid less than colleagues who are performing similar jobs to you, or it could be that your company pays less than other competitors. If your employer offers minimal pay increases, which don’t keep up with your market value, then over time, you may really be underpaid.
Start researching
There are websites where pay levels can be compared with others who do a similar job. Although these may use an online salary calculator to estimate pay for various roles, they may not give accurate information, as factors such as location, company, and experience can potentially cloud the comparisons.
LinkedIn and Glassdoor may be useful for reviewing other salaries in a job area to understand the average pay.
Some larger recruitment firms offer annual salary surveys, which can really give an idea of where pay sits in the market. Hays Poland provides a 2024 salary survey, and Alex Shteingardt, Managing Director, Hays Poland, says: ‘The crucial task for organizations will be to devise a remuneration strategy that satisfies their needs while simultaneously attracting and retaining top talent.’ Page Poland also offers similar salary guidance information.
This is also an opportunity to review whether you are still at the same level as the current job for which you’re assessing salary. For example, if you can perform at a higher level in your current job, it may be time to look for something new.
Recruiters in your market also have up-to-date information about salaries. Speaking to a recruiter doesn’t mean you have to jump into a new job, but understanding similar jobs in your market can help you benchmark where you sit salary-wise.
Consider total compensation
While base salary is important, some companies provide competitive benefits packages that can increase total compensation. They use total compensation statements to outline a total package (which can include benefits in addition to salary, such as bonuses, employer pension contributions, commissions or paid time off).
Indeed explain how total compensation can impact your views on base salary: ‘An employee who may be looking elsewhere for employment might base their salary comparisons on base salary only, without realising how many additional benefits they are receiving and the value of those benefits. When comparing positions, it is important to compare the total compensation package rather than just the base salary.’
So, total compensation may also be something to look into, especially when comparing salaries across different organizations. For instance, if you receive an additional amount through benefits but another firm pays a higher base but little in benefits, it’s worth considering your financial priorities.
Starting the negotiation discussions
Once all the relevant data and research have been collected, the meeting to discuss salary with your manager can take place. Glassdoor suggests: ‘The most important thing you can do before asking your boss for a raise is to know exactly why you are deserving of one. When you’ve built a strong case for yourself, it will be much easier to ask for what you want with confidence. Look back to recent projects and periods where you went beyond what was expected and provided real value for your company. Always use specific performance data when possible.’
Consider your language and approach
Talent company Randstad suggest using positive, active language when discussing the idea of a salary increase with a manager. They gave examples of: ‘”I am committed to the future of this organization”… „I believe as a business we are creating a successful and valuable culture/team”,” I believe that my results show that I am deserving of a pay rise.”’
Understanding your worth in an organization and in the external market can take time and research to gain credible data and facts. However, once you have this information and see you are underpaid, it will arm you with the details you need to have a discussion with a manager for a potential compensation change.
Author: Sarah Haselwood
