Understanding Why You’re Underpaid Resources

Newsflash: Making less money than you’re worth is a bad thing.

OK, so this probably won’t surprise most people, but it’s fairly common for individuals to accept artificially low pay, and in an insightful Forbes post titled “The Three Reasons You’re Underpaid,” writer Liz Ryan explains why this is a mistake. It’s not simply a matter of costing yourself money and denying yourself the vacations and fancy clothes you could be enjoying.

“It isn’t humble or modest or praiseworthy to undervalue yourself,” Ryan writes. Instead, she claims, those who settle for low pay risk not being taken seriously. In the professional world, it’s all about having “mojo,” and if you give the impression you’ll settle for whatever employers are willing to give you, you might mark yourself as mojo-deficient.

So why do people get stuck earning less than they should? The first factor Ryan cites is “salary compression.” If you stay with the same company long enough, you’re likely to receive cost-of-living increases that don’t reflect what others in your industry are making. Essentially, Ryan explains, companies are betting you’re less than thrilled about the hassle and uncertainty of looking for a new job, and that you’re willing to take security over the higher wages you could be earning elsewhere.

While salary compression is the employer’s fault — it’s bad business, Ryan says, to “play chicken” with loyal workers — the next factor, “disconnection from the talent market,” is a flaw that workers themselves must own up to. If you lose sight of what folks in your field are making, you’re doing yourself a major disservice. Do your homework and find out just how green the grass is elsewhere.

Lastly, Ryan says, it’s “fear of negotiating” that keeps people from standing up for themselves and asking for the money their work warrants. Her advice: Figure out what “business pain” you solve for your company — i.e. what makes you so valuable — and what alleviation of said pain ought to be worth. Then use this knowledge as leverage for fair compensation.


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