Negotiating improvement on lower salary than market

Question

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Context

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After graduating and finishing a good apprenticeship of 2 years where i ended up being in charge of a refactoring project (I started as a software engineer and became project lead), I stayed in the same consulting firm and landed a job in Switzerland with a lot more responsibilities in terms of project size, budget, teams etc...

As I was coming from France, my company who switched me to their Swiss subsidiary took advantage of my innocence and offered me an annual wage that's 30% under the average rate for this kind of position (despite my negotiations).

I was aware of this but the opportunity for my career was too great to refuse and I also thought the salary would be sufficient to live well. After a few months of living in Switzerland, I realized this is grossly underpaid and allows me only to "survive".

In order to get some leverage, I started doing interviews and landed an offer at another company. My dilemma is that the job is below the one I have currently in terms of responsibilities, career growth & interest but the offered salary is really great.

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Is using this "leverage" I obtained in regard to my current position possible and how ?

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• Leverage the offered job with my current Business Manager in order to raise the salary to a normal rate and still retain the good position? He might take it badly or be unable/unwilling to raise my salary in which case I would have to go through with this offer in order not to discredit myself.

• Go straight to the client and leverage with him directly? I'm a key point in the current project and me leaving would put the project on hold for a lot of involved parties.

• Accept the offer and quit? Because even if they accept to raise me to a normal wage, they're going to resent me for forcing their hands and this will corrupt the good relationship we have.

Any advice would be greatly appreciated ! :)

Answer 1

You have proposed 3 choices so I will address them directly:

Go straight to the client and leverage with him directly

Don't do this, it will likely result in you getting fired. It's an internal issue and going to the client reflects badly on the company so your company won't appreciate it.

Accept the offer and quit

This is a valid option, however, the end case is the same as option (a) so you may as well...

Leverage the offered job with my current Business Manager in order to raise the salary to a normal rate and still retain the good position

This is the correct thing to do in this scenario, but I'd avoid using it as "leverage". First try and have a discussion about a pay rise (I would draw your attention to the answer to this question: How should I properly approach my boss if I'm feeling underpaid?) and if your manager tries to fob you off, then bring up the offer from another company.

Answer 2

I think there are flaws in all of the options you've presented. But, ultimately, none of us can tell you what to do, and depending on your goals and your risk tolerance, the things I think are flaws may not matter to you:

Leverage the offered job with my current Business Manager in order to raise the salary to a normal rate and still retain the good position ? He might take it badly or be unable/unwilling to raise my salary in which case i would have to go through with this offer in order to no discredit myself.

Using an outside offer as leverage for a raise is risky for a number of reasons. You boss might assume you're a flight risk, and look for a reason to get rid of you. Or, your boss might call your bluff (sorry, we can't afford that, I guess you should quit and take that offer). But most importantly, an outside offer isn't really directly relevant to what you're being paid now (see below.)

Go straight to the client and leverage with him directly ? I'm a key point in the current project and me leaving would put the project on hold for a lot of involved parties.

That has it's own risks, too. Your client may have a no-compete deal with your current employer that prevents them from directly hiring you. Or there may be cultural implications to "poaching" even if there is no legal implication. Some firms are happy to lose an employee to a client, others really hate it. We don't know which situation you're in.

Plus, this stinks of being a hostage situation. People who have a consultant at a critical point in a project may be really insulted if the consultant tries to use that situation as leverage when asking for a change in employment circumstances. In other words, you don't want to look like you're saying, give me what I want or else...

Accept the offer and quit ? Because even if they accept to raise me to a normal wage, they're going to resent me for forcing their hands and this will corrupt the good relationship we have.

You have to make sure you're comparing the entire employment experience in order to decide if this is a good option or not. You've already mentioned that it's a "lower" position, but what about other factors? What's important to you? What kind of work will you be doing, what is the team like, what technologies will you use, what are the hours like, what is the office like, and so on?

I think the good news is, you may have a fourth option, which may avoid some of the risks of the above options: Ask for a raise, and base your request on the value you bring your employer (instead of basing it off someone else's offer.)

Write a list of your recent accomplishments, and your plans for the future. Focus on things where you're bringing value. Compare your list to your job description, and highlight anything where you're going "above and beyond" what your job description asks of you. In other words, put in writing the ways that you're exceeding your current role. Present that to your employer, and ask for compensation based on the value you're bringing (since - clearly - it exceeds the job description that they're currently paying you for).

It's okay if, internally, you're using your recent offer to justify your raise, but literally telling your current boss about that offer is both risky, and potentially not meaningful. That other employer may be looking for different things than your current boss is looking for, and hence they're paying a different amount - even if the titles are similar. Presenting your boss with a list of things you're actually doing for them above and beyond your current role is more meaningful, because it ties your request to your current employer, instead of some unknown external entity.

Answer 3

Going to the client and effectively saying "you're screwed if I leave" is really threatening and won't bode well. You also clearly would prefer not to take the other offer, and simply use it as leverage. This is perfectly reasonable, but be careful not to make it sound like a threat. Your other offer (which you should definitely get in writing if you haven't already) is a great way to indicate your market value, not proof that they have treated you unfairly. Here are some possible approaches, depending on how aggressive you want to be:

Soft (safe)
Treat this like you are simply asking for a raise, and bring your other offer as evidence of your true value. Approach your manager and say you have felt underpaid for some time. Show them numbers indicating average salaries for equivalent jobs in your area. Be prepared to give concrete examples of what you have brought to the table and why you deserve higher compensation (other people making more than you is not sufficient).

(There is a chance they might just agree with you at this point and offer a raise without even knowing about the other offer. If so, great! Stop here. If not, or if you want to keep pushing for more, continue on.)

Be open and honest and explain that you don't want to leave the company, but wanted to get a better idea of your value so you applied elsewhere, did well in the interviews and got an offer. Don't try to manipulate them or strong arm them, just say that you feel the other offer is a good indication of your actual worth and ask them to match it. This is less risky and shows your manager that you are loyal to the company and you trust them to be fair. However, it also makes it easier for them to just say no, since you have indicated you probably won't take the other offer anyway. Be prepared to walk away empty handed or with less than you want. (Bear in mind that telling them you don't want to leave by no means obligates you to stay. If you don't get what you want you can always change your mind and take the offer anyway.)

Hard (risky)
If you are confident in your negotiation skills, have a solid relationship with your manager and know that the company would go to great lengths to keep you, you might take a stronger approach. Tell your manager that you are underpaid given the current market, your responsibilities and your contributions to the company. You don't need to go into detail about your job search, just tell them an opportunity came up and another company has made you an offer. Fully commit and tell them you are planning to take the offer, but emphasize that you are very happy with your current job and would be thrilled if they could make a counter offer. Don't make this a threat, but make sure they know what they stand to lose if you leave. Be prepared to walk away. If they are grumpy and unreasonable there is a chance they will take your interest in another job as proof of your disloyalty and could even fire you on the spot (though that would be extreme, it is perfectly legal in many places). Of course, if that happens, you probably don't want to work for them anyway, and you've already got a solid offer to accept elsewhere.

Answer 4

Leverage the offered job with my current Business Manager[...]?

Do not do this. Once you tell your employer that you're actively seeking positions elsewhere, you've crossed a line that you cannot un-cross. Your relationship will change, and it's a matter of time before you no longer work there, one way or another.

Go straight to the client and leverage with him directly?

Absolutely do not do this. This is ethically problematic at best, and very unprofessional.

Accept the offer and quit?

If you think the other position would on balance be a better fit for you, then sure. We can't know that.

There's a key point on which I disagree with you:

Having another offer in hand is not "leverage". Being a valuable employee is all the leverage you'll ever have, and indeed all the leverage you'll need. Your employer knows what the appropriate compensation is for someone with your combination of skills and experience. Highly sophisticated organizations have systems of control in place to ensure that compensation is in line with value like you wouldn't believe, because they know how important that is to controlling attrition and extracting value from their labor force. All successful organizations, even unsophisticated ones, understand this at some level. All of this is to say that, your employer already knows that they're not going to keep you for much longer at your current level of compensation. Now, it may be that they're satisfied with this arrangement! They may believe that the excess value they're generating by underpaying you is worth the added cost of eventually replacing you. They may be right! But telling them that you have another job offer in hand is not going to give you negotiating leverage, it's going to end your employment relationship.

Here's what I would do:

Ask to renegotiate your salary with the appropriate people. This has nothing to do with the fact that you have another offer in hand. Your employer is not negotiating against that offer. The fact that you have that offer is none of your employer's business. Your employer is negotiating against what it would take to keep you. If you want your employer to give you whatever that is, it behooves you to go to them and ask for it. It's fine to frame that as "I'd like to renegotiate my compensation so that it's more in line with what my research shows is standard in this job market" or something along those lines. Don't worry - when you tell them you've researched compensation and want to discuss yours, they will know what that means. If they want to retain you, they will take this request seriously. But to tell them you're already actively seeking employment elsewhere - much less that you've already received a competing offer - would be a mistake.

The advantage of this approach is that it accomplishes all the same goals of going into a negotiation with "leverage" on your mind, with the added advantage that it doesn't compromise your relationship if you do decide to stay.