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I feel that I am currently being underpaid (so does my colleagues). I also feel that the learning curve has stopped. Also, increment for this financial year is pending. So considering being underpaid and looking for an increase, I targeted 65-80 % hike, although I have only a short span of experience (~ 1 year).

I got selected for a job, with similar responsibilities, and put forward and intention of 60% increase (considering how my interviews went, company history, etc.). Now I have received and offer of only 33% which I feel is much less than what I am capable of. I also talked to them, but they refused to increase the offer (It seemed like a bad decision since the HR almost came as rude.). I talked to my friends at other companies and it seems it is industry standard that the next company pays you on the basis of current salary.

My question is how to get out of this situation and get aleast 80 % increment?

I feel that my options are:

  • Accept the offer now and make a another switch in 3-4 months.
  • Reject the offer and wait and work for another offer in my self-evaluation range.
  • Use the offer as bargaining with my current employer (I am pretty sure that my increment will be much less that the current offer!) and then start looking for another job. Seems unethical
  • Get another degree in the field and start over.No guarantee and do not want to pursue.

Are there any other option ? If not, which is better?

Additional info: The question is respect to Indian job market where 10% annual hike is normal and I expect my current employer to give me hike in somewhere around that.

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  • If you want to get X but settle for less than X you will not get to X because X moves. That does not mean that you will ever get to X if you refuse but if you settle for less there is no reason for them to improve the offer.
    – IDrinkandIKnowThings
    May 1, 2014 at 15:49
  • My apologies but this might help: workplace.stackexchange.com/questions/23341/…
    – MonkeyZeus
    May 1, 2014 at 17:09
  • @JoeStrazzere : it almost feels like extortion to me
    – ColoredRanger
    May 1, 2014 at 17:22
  • @ColoredRanger There is nothing unethical about using a current offer in negotiations. You're potentially quitting costing the company a valuable asset. Giving them an opportunity to prevent that is actually a good thing for your employer. It's only ethically questionable if you pursue offers you have no intent of accepting for the express purpose of pursuing a raise with your current employer, and even then you're really wronging the company extending the offer by wasting their time than your immediate company.
    – Eric J Fisher
    May 1, 2014 at 18:40
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    NOTE ABOUT RATES: The question is about India, current INR inflation is 8-9%. So a 10% raise in INR terms translates to just 1% or so in real terms. At the same time, the Indian software market is still ascending towards Western pay levels so it is a rising market.
    – Phil H
    May 2, 2014 at 9:47

5 Answers 5

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You only have one year of experience. A 33% raise is hard to decline. I would mention the raise to your current boss, see what they counter with. If it's not an acceptable counter, take the new offer and stick with that company for at least two years while you build up more experience.

You have to be severely underpaid to expect a near-doubling of your salary, especially with only one year of experience under your belt! Patience!

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    A 33% raise it not just 'hard to decline', it is HUGE! You've only been there a year.
    – user8036
    May 1, 2014 at 18:38
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    While yes, 33% is huge, relative to the job market its not as huge as it would be in the US. Companies that are not IT outsourcing companies(so, product companies like Microsoft,etc) give an annual raise of 13-25% in India (or more).
    – user87166
    May 1, 2014 at 18:51
  • @user87166 13% annual raise across the board? how is that sustainable?
    – HorusKol
    May 2, 2014 at 0:35
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    @HorusKol remember, salaries in INR (when converted to USD) are less than 20% of the USD values. For companies headquartered in US, its not so difficult..
    – user87166
    May 4, 2014 at 3:28
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    @user87166 - even if the money's coming from elsewhere, 13% raises each year means you will be doubling your expenditure on wages every 5 years. And, unless the US based company is returning more than 13% profit growth a year, that kind of salary growth is not sustainable.
    – HorusKol
    May 4, 2014 at 23:12
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I initially refused the offer but they later negotiated and accepted my demand. The key to take from here is that there are many local factors at work and complete information about them is essential while taking a decision. The factors that probably affected my case were:

  • Local market practices : A 30% increase while switching is common in the local market and is a part policies of regional companies. Although in my case there was considerable increase in variable pay. Also there was increment on the way from my previous employer along with three month arrears due to late increment which caused them to rethink.
  • Expected future trend in local market : Shortly after I accepted their offer, I realized that the job market is in major upswing. They probably anticipated the upswing.
  • Company's Requirement : They were starting a critical project which had enhanced the immediate requirement but they did not wanted to compromise the quality. They had in fact already had 3 full day dedicated to interviewing candidates before offering me and one while negotiating with me, which kind of made them desperate.
  • Quality : My education background helped and apparently I had learnt a lot compared to 1 year experienced. Beware! never overestimate this factor.

The only way I of retrieving information on these factors I found was through friends and colleagues, although I got some perception of the market through the available openings.

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    Congratulations.
    – kevin cline
    Sep 2, 2014 at 23:52
3

First,

Accept the offer now and make a another switch in 3-4 months.

This is quite the unethical option. It will prove further problematic trying to justify that you are looking for a new job just because you want more money; and that's not considering the type of reputation you are creating with two previous employers.

Use the offer as bargaining with my current employer (I am pretty sure that my increment will be much less that the current offer!) and then start looking for another job. Seems unethical

This is probably the best course of action, which is also far from unethical (but rather expected).

A final note, with only 1 year of any sort of experience a 30% increase is a big improvement. Be glad companies at least consider you have some experience, as some will simply place you within the just-graduated class for at least 2-3 years.

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    There is nothing unethical about changing jobs to better your financial position. Do you think companies feel its unethical to raise prices in response to rising demand? It may hurt your resume if you do it too much, but that is quite different from being unethical.
    – E.J. Brennan
    May 2, 2014 at 12:06
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    I find it unethical to knowingly accept a job you will try to quit from in 3 months; but remember, ethics are quite subjective and often very different from person to person.
    – rae1
    May 2, 2014 at 14:16
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Targeting an increase of 65% to 80% is just dreaming, only possible if your going to move(e.g. in europe from any other country to swiss, sweden or norway). In germany you can be really happy if you've gotten an increase by 5-10%, no wonder why lot's of programmers are leaving this country....

An increase of 33% of a company in the same country is extremly good; talk to your boss and when he has no counter-offer near that, go. Ethical thinking - sorry, it's business not charity. Do you think your boss is acting ethical paying so bad?

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I can answer from my experience from the Polish market, but it seems similar in the IT-industry.

It's normal to be underpaid as beginner. Most companies require the workers with at least 3 years experience, those who recruit beginners are usually heavily underpaying. The increase in the salary in the first years is significant. It's quite normal to be payed 4 times higher than in the beginning after 3 years, and event up to 10-times more after 10 years.

You're probably worth twice as much as when you started, but it doesn't mean you can get as much. It's the case in many coutries, so in India probably too, that 3-years experience (sometimes 2, or 2-and-half) is that 'magic' barrier, after which you can negotiate 'adult' salary. You should check out and ask your friends about the details, but if you aren't at the financial pression, it is not a bad idea to accept that 33% rise and wait a year to get twice as much. With 2-years experience you can have the reasonable amount of experience to negotiate harder.

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