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I graduated with a MSc and now I'm working my first job. Everything was fine until this year when I asked to renegotiate my salary. I asked for 35% to compete with inflation and compensation for all the new responsibilities I picked up during my 18 months there. I had to settle for 25% which was fine back then but my costs keep rising and after some more market research I've come to the conclusion that I'm still quite underpaid.

We are a small team of four developers with a very complex domain with ancient legacy code. Training a new engineer (if you can find one) will take about a year to reach the domain knowledge I posses. While I was hired as a junior my current set of responsibilities puts me between medior and senior level for this company.

I also recently found out that I'm paid about 2000 euros per month less than my colleague (25y experience) and about 1000 euros compared to market rate for my area.

We do the same work I work without supervision and my work is not inferior to theirs when you compare code reviews.

So should I be paid equally compared to my colleagues?

P.S. I do really like my job but leaving this much money on the table is going to breed resentment.

EDIT: Because our team is so small it would likely affect plans for the following year as the one remaining senior would have to spend his time training staff.

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    Does this answer your question? How should I properly approach my boss if I'm feeling underpaid?
    – gnat
    Apr 1 at 14:46
  • Yes that is very useful but it also doesn't reflect the world today when a 2% raise is enough to stay afloat. Apr 1 at 15:06
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    "We do the same work I work without supervision and my work is not inferior to theirs when you compare code reviews." You do the same work, to the same quality, but do you do it in the same amount of time? If you take twice as long as the other developer, somebody could make the argument that you're worth half as much. Apr 1 at 15:13
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    It strikes me as very unlikely that someone with 18 months experience would literally be doing the same work as someone with 23 years experience. I suppose it's not impossible if the other developer is absolutely terrible at their job and has learned nothing in 23 years, but it seems unlikely. More likely, you may be writing similar code, maybe... and you simply don't see everything else they're bringing to the table. Put the other person out of your mind. If you feel you're underpaid, that may be something to address. Don't compare yourself to someone with incomparably more experience. Apr 1 at 23:02
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    In a major emergency I wonder which one of you management would run to ? Probably the person getting more money with 20+ years experience. You're a rookie who may walk any time, management regard the veteran as a solid company player who'll be there when they really, really need him. Apr 2 at 2:04

6 Answers 6

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So should I be paid equally compared to my colleagues?

Your pay is only relevant to what you have negotiated with the company and the value that the company sees in you.

If the company feels that your colleague is more valuable than you, then they will pay them more. It doesn't hurt that the colleague appears to have considerably more work experience than yourself.

While you did well in negotiating a 25% pay increase, if this is still not enough for you then you should look for a company that will pay what you are looking for. Keep in mind that prior work experience does factor in to how much a company in willing to pay you, even if you do the exact same work as someone else.

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  • While this is true should the cost of replacement not be taken into account? I've edited the question with a bit more information. Apr 1 at 14:16
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    @possiblyUnderpaid That is up to the employer to decide, if they don't factor or don't care about a replacement cost then it won't help you in salary negotiations.
    – sf02
    Apr 1 at 14:24
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    @possiblyUnderpaid: What makes you think that the cost of replacement wasn't already considered when giving you the 25% rise? While market rate can be a useful indicator of what you could be earning, it in no way indicates how much you as an individual are worth. That is up to you to prove. If you think you are worth more, then take the gamble and apply to other jobs. You will find out quick enough if you are right or wrong.
    – musefan
    Apr 1 at 14:52
  • My read was that they are complacent about the salary estimates for new hires. They tend to mostly work with self-employed developers who work exclusively there. During my salary negotiation my CEO said that salaries can't go up infinitely which is kind of a joke if you just started your carreer and have proved your worth for 18 months Apr 1 at 15:04
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It's not really a surprise that your colleague, who has 23 years more experience than you do is paid more than you are. Frankly, I'd be astonished if they weren't, because that would suggest that either they were hugely underpaid, or that you were hugely overpaid.

If your pay is below the current market rate (and you need to do some proper research into this - not just a quick google search), then you should bring that up with your management, or look for another job with a higher salary. But that discussion should not involve trying to compare your salary to your much more experienced colleague.

There is much more to being a developer than the code you write, and just because you think that you're contribution to the company is just as valuable as theirs is, doesn't mean that management agrees with you.

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  • Yeah, directly discussing salary comparisons seems like a bad idea. I've already looked at glassdoor for various ranges in my area. I know my contributions are appreciated because I often hear "gee anon that feature XYZ sure saved me a lot of time today" so I will be collecting a list of features to bring to the interview. Apr 1 at 15:44
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    -1. Asserting that someone with drastically more experience is just inherently an drastically better developer is just not true. Plenty of developers will go through their entire career just being bad developers. As the quote goes Some people say they have 20 years experience, when in reality, they have 1 year's experience repeated 20 times.
    – Brondahl
    Apr 1 at 17:42
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    OP's company seem to think that they're better, because they're paying them a lot more money.
    – Gh0stFish
    Apr 1 at 20:16
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    Focus on what the market research is telling you, but be mindful of the fact, you still only have 18 months of experience. Additionally, I would agree that a senior engineer should be paid more a month than an engineer with only 18 months. You are NOT going to be paid the same as that individual, the company would be crazy to do that, as they risk losing that individual with 25 years of domain knowledge. At no point do you make the claim in your question that this individual with 25 years of domain knowledge is overpaid, which tells me they likely had a part in training you.
    – Donald
    Apr 2 at 15:13
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I'm going to agree with @sf02. The question of "should" is irrelevant. There "should" be world peace, and there "should" be universal health care, but we have to deal with things as they are. It's great that you had enough negotiating power to achieve a 25% raise even though it wasn't what you wanted, but then again there's a secondary problem.

That secondary problem is that you're busy comparing yourself to your peer. So if you were initially getting paid the same, and they gave the other person a dollar raise per year, would you be fuming over it? That's how it's coming off in your post. Would you volunteer to lower your salary if someone else on your team was doing the same work and getting paid less? Or how would you respond if the company lowered your pay (without your permission) to make things fair for the lesser-paid staff member? I don't think either approach to creating fairness would sit well with you.

Life's not fair, my friend. In civil service and military occupations they have fixed pay scales just to counter the kind of argument you're raising and to keep the workers from being at each others' throats from playing the comparison game. This is also the reason HR departments don't like employees discussing salaries.

If this issue's causing you challenges with your self esteem, a raise is not going to fix things, but therapy might. Don't let this issue haunt you during your entire career, because there will be inequity wherever you go.

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    Thanks for your input. I have no issue with people who contribute more getting paid more. However now that I've proven myself and provide the same value I see no reason to be undervalued 30-40% compared to the market rate. My self esteem is just fine just trying to find an angle of approach. Apr 1 at 15:32
  • Here in the states, you'd likely just have to find a new job.
    – Xavier J
    Apr 1 at 16:12
  • @possiblyUnderpaid - Where do you get 30-40% from exactly? At most you expectations of an additional 1,000 euros is reasonable but you expecting the same pay as someone with 23 years of additional experience is very unreasonable. You have no job history, your expectation of being paid at market, might not be something your company can entertain until you have more experience
    – Donald
    Apr 2 at 15:19
  • @Donald my current pay is about 3500 so market would be 4500-5000 for my current experience and skillset. I do have job history now. Almost two years at my current place and various internships which most people don't count and some parttime work. My university is highly ranked worldwide etc... I don't demand to be paid the same as my peers with more experience just more fairly. I think the company paying higher salaries to people with comparable output shows there is still budget left. Apr 2 at 18:26
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25% Salary increase in 2 years is not enough for you and you are irritates that somebody who has much more experience earns more?

Either

  • you developed into a rock-star programmer since you started
  • you were already a beyond the average programmer and negotiated bad starting salary
  • or you are grossly overestimating your skills and importance.

I guess it's the latter and maybe it's better for you and for sure for the company if your ways part quickly.

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  • Perhaps it was a bad idea to phrase the question such as I did. Why should I not be paid market rate though for my contribution? As for point #1 I don't think im a 10x engineer but maybe 2-3x. Point #2 my credentials were good but there was a slight problem with my CV so I didnt have a lot of offers. I negotiated a market rate MSc salary. Then after 6 months I received a 10% raise and after 18 months a 25% raise. As for point #3: I don't think I am. Sure, I'm not a senior level engineer yet but I fulfill important roles in the team and if I left expansion plans would be severely affected. Apr 3 at 21:50
  • @possiblyUnderpaid: think the team will better off without you in the long term, sorry to be that harsh. If you don't have the patience to show for one more year that you can continue to perform on the same level and aim for an stable increase then, you probably wont have the patience to sit trough a long and demanding project. Market rates are a tricky thing, and so are contributions. I did Projects where i made an impact directly after joining and i had projects later where it somehow did not work.
    – Sascha
    Apr 3 at 22:58
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Ah yes, all those new faces on the IT market. It's simple, really - they don't pay you a lot because they can afford to. Your analysis about your own employability and how much the company is willing to pay is heavily skewed. There is a lot more to it:

  • "Market rate" is a deceptive term. Your either have an offer on your table or you don't. Odds are, with your CV you won't be offered as much as you think you would - companies know they can cut costs on that, and they will. Every point you make about how you might be paid more elsewhere is moot until you have at least one offer with that figure.
  • There are many other factors at play when it comes to compensation - not only an experienced person provides value for business in more subtle ways, it is also not uncommon for people to be able to negotiate better salaries if they have families/kids, nearing retirement etc. Those are purely social reasons, but there are bosses who believe they should support their workers that way. Pure discrimination, but this does happen more than you probably think.
  • There are companies where writing code is tightly coupled with the business itself, and those with a loose coupling. Your case is likely the latter: you think the company would spend a lot more retraining new staff. Perhaps, but not being able to write code is probably not as crucial for them, either - as long as the cogs get greased, it would be fine by them. (This point is pure speculation, of course, but many many companies would rather get a new hire and eat the costs of training the previous one than keep matching the compensation).
  • You have been working on a legacy code for an year and a half, and this is not an easily transferrable experience. Ergo, your chances of getting a good offer are not as great as they might've been. Work experience per se is great, of course.

It's simple, really - they pay you less because they can. You have ambitious salary expectations; it would make sense to clarify what could you expect in e.g. 5 years from now if you keep this job and make your decisions accordingly. Again, it's called job market because if either side is unhappy with the arrangement, they are free to look elsewhere.

But as an anecdote, I hear the complaint about new hires and their unreasonable expectations fresh out of college all the time for the past 8+ years. And yes, there are developers of a similar skill level in different companies with 2x difference in the net salary. Not all of them took up on new offers, so the companies can get away with paying them "half of the market rate".

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  • I think SaaS is tightly coupled. It's the core of the business after all. Yeah how dare those new graduates demand a wage so that they can't even come close to borrowing enough for a house.... I'm not sure how it is in the rest of the world but in my area there is an IT drought there are way more positions than competent staff so this reinforces my belief that I can demand good pay. Unfortunately the reality is that you have to job-hop every 2-3 years to keep climbing vertically. Apr 5 at 19:35
  • @possiblyUnderpaid You can take up these issues with the government - I'm not that much older than you and still largely in the same boat, companies can't fix it lest they go out of business. If you are really good, you will be able to make enough money, but most fresh graduates won't, as of now. Pinning it down on your employer is wishful thinking. Also yes, IT drought is common but "competent staff" often means you know how to make money, end-to-end. You still seem to lack experience given the statements like "this is core of the business so it must make money, right?". Wrong.
    – Lodinn
    Apr 6 at 1:14
  • As in, some successful companies intentionally make their products worse in order to make money, and sometimes, working on a product which seems to be the core of the business is a maintenance job. A big part of the problem with the IT drought comes from managers, not programmers not being able to do their job (and programmers taking a long time to learn managerial skills and align themselves with the business). It might be that you personally have the ability to pitch your work to managers/clients, but this is not true for the majority of the workforce.
    – Lodinn
    Apr 6 at 1:22
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The problem with ancient legacy code is: It is not valued by the company, and therefore the people maintaining it are not valued. Even if problems with that code could be absolutely fatal for the company. In this situation it can be hard to get paid what you are worth.

Go and look for a position elsewhere that pays more. Once you signed a contract you give notice. Accepting a counter offer is usually a bad idea, but you may mention that you would consider coming back as a contractor if needed. At contractor rates, which are significantly higher than usual employee rates.

Often these rates get paid because they come from a different budget. A company cannot afford to pay X per year (because that is a fixed cost and companies hat fixed cost), but they can afford to pay 1.5X or 2X year after year (if they can stop paying anytime which makes it a variable cost).

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