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Summary

I believe myself to be underpaid and have started looking for a new job. I don't have an offer yet. Should I tell my boss as a way to gain leverage in salary negotiations?

Long form

I know this question has been asked before in various shapes and forms, but I could not find an answer which I was able to apply to my situation.

I have a job, I like it a lot, I just don't like my salary. I do not have a problem of finding a new job, it's very easy. I'm just trying how to handle this situation without being a dick to anyone.

In short:

  • I've been at my current job for 2 years
  • According to every salary statistic I've been able to find my salary is in the lower 25%
  • I really like my job
  • I've told the bullets above to my boss very clearly every time we discuss salary. I say something along the lines of: "I truly enjoy working for this company, but please understand that being in the lower 25% of the salary spectrum is not sustainable for me."
  • I like my boss and I like my co-workers

However, I just had my second salary negotiation and while I did get a decent raise, it's no where close to being enough. Therefore, I am now actively searching for a new job. Should I tell my boss?

Maybe I just have a big ego :) , but I really believe they want to keep me on the team and I would like to stay here if I could just get the salary I can get elsewhere.

Pros Telling him in advance gives him a chance to do something about it.

Cons I am not afraid of getting fired, but I guess it would be a bit socially awkward.

Both the statistics and the job offers I had in the last 6-12 months tell me that I should earn around 20%-30% more. 40% if I'm really lucky.

The main reason I do not get a better salary at my current job is that I started out too low. At least in my country, it is very common only to get a big increase in salary when you switch jobs. The main reason for this is that each department gets a fixed increase (in percent) which my boss then divides among the employees. So it is difficult for him to give me a significant increase without punishing my co-workers. On the other hand, I don't see any gain for the company if I leave and they need to spend a significant amount of time and money on finding and training a replacement (which takes almost a year). I would therefore assume the rational thing would be just to make an exception and pay me some more and keep my experience, but who knows.

In any case - should I tell him?

marked as duplicate by gnat, yochannah, scaaahu, Michael Grubey, IDrinkandIKnowThings May 19 '15 at 21:55

This question has been asked before and already has an answer. If those answers do not fully address your question, please ask a new question.

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    If you said "being in the lower 25% of the salary spectrum is not sustainable for me" then you told him. Get another job and hand in your notice. IF they ask if money will keep you then give them a chance to match. – paparazzo May 15 '15 at 12:24
  • 4
    Why would you ever show your cards? This is just a "Life" lesson - don't spill any more beans than you have to. I regretted telling a coworker the other day how much I paid for a hotel I went to. Why? Extra information can be used against you. Keep them guessing ... is wiser ;-) – Adel May 15 '15 at 13:17
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    When I was leaving one of my past jobs, they offered to double the salary (which was quite good to begin with) to keep me. That's what happens when you're a key person. 😎 I left anyway. – Sergio Tulentsev May 15 '15 at 19:05
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    @SergioTulentsev - good on you for leaving, since staying would mean that you were OK with previously getting underpaid :-) tough to do though, i' m sure – Adel May 16 '15 at 0:21
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    @Adel: “Extra information can be used against you. Keep them guessing ... is wiser ;-)” What a horrible way to live your life. Not everyone’s out to get you buddy. – Paul D. Waite May 16 '15 at 14:19
61

Short Answer: If your salary is still low after raising it multiple times and even after a raise, just find your new job and go.

The reason I say this is that you already have given multiple opportunities for them to redress it, but they still have not or will not to your satisfaction. Even if they come to the party now, you will be having this exact battle again in a couple of years.

How do I know this? I was in exactly the same situation you were in. And that is exactly what happened. You will continue to have to push to gain any sort of increase.

Now the question is, given your other positives for the company, is it enough to overcome the salary shortfall? I have worked places where I was prepared to work for less to obtain other intangible benefits. From your question, I can only assume "no", but that is only something you can decide :)

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    I don't agree it will be the same battle in a couple years. If op gets a bump and the raise is % then OP should hold. He says the problem is he started too low. – paparazzo May 15 '15 at 12:30
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    And note that 25% of people are willing to work in the bottom quartile of salaries for their role, for one reason or another. Your boss isn't necessarily going to believe without proof that you aren't one of them. Saying you're looking for a new job goes further than saying you want more money, but not as far as finding a better-paid job. Actually taking a better-paid job is as conclusive as proof gets! – Steve Jessop May 15 '15 at 13:37
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    +1 - Even if the OP gets an exception and gets bumped up to what he thinks he should be, the employer is very likely to hold that against him for the next several rounds of raises. "Well, I'd have given you 5%, but since you just got a 33% raise this year, your raise will only be 0.5%." (or, in my case, zero) I was in the same situation and getting a new job was the only way I could get a clean slate. – afrazier May 15 '15 at 15:33
  • @SteveJessop 25% of people are willing... that begs the question: are we talking local, national, global "quartile"? $100k in San Franciso is different than $100k in Alabama. ... Are we talking entry level or senior? I took a bottom 10 job to get experience... ended up with over twice the pay in 3 years and just left for a 20% raise at a state job... I was willing to hit that lower quartile - to get experience - but that only goes so far. I also had minimal expenses (Living with fiance & family) and could afford the low pay during that period... – WernerCD May 15 '15 at 16:44
  • @WernerCD: well, the questioner leaves that open in the question. There may be some reason why he shouldn't be in the bottom quartile (perhaps he lives in New York and is comparing with global wages, perhaps he's better than average at his job). His boss doesn't seem to agree with his assessment. Whoever's right, saying that you're looking for a job challenges your boss to re-assess that opinion, and finding a new job proves the matter. – Steve Jessop May 15 '15 at 17:07
46

DO NOT TELL YOUR BOSS.

  1. If you're hoping to nudge him into giving you that raise, you're going about it the wrong way. What you are doing is poisoning the well with you threat to leave "or else...". You will never get another raise and your boss will start looking for your replacement soon, if not immediately.

  2. Your boss might fire you on the spot (I've personally seen it happen several times), especially if you work with sensitive data and/or money.

  3. If your boss finds out where you are applying, he could potentially torpedo your chances by calling them and bad-mouthing you.

  4. You're burning your bridge. People talk.

Instead

  • Win-win: Tell your boss you are looking for additional/increased job responsibilities. If you can swing a promotion or "sidemotion" to a different position, this may justify a salary increase.

  • Stop chasing the dragon: When you took the job, the deal was good. You and your boss both agreed on your salary. You say "both the statistics and the job offers I had in the last 6-12 months tell me..." The fact is that salary surveys are garbage: they group different jobs with different responsibilities under one bucket ("Web developer" - what does that even mean?), and people lie about their salaries.

  • Consider the intangibles: What kind of benefits do you get? Vacation? Casual dress? Flexible hours? Perks like free lunches, powerful and new computers, an office with a door? If you were offered a job that paid 3x what you're making now, but your desk was on a noisy, smoky factory floor, your computer was 10 years old and you were only allowed two 5-minute bathroom breaks a day, would you take it?

  • Finally, if you're going to jump, jump: Don't look back, don't explain, don't negotiate. Don't participate in any exit interviews, don't tell them where you're going, and turn in your resignation letter:

Effective (date), I hereby resign my position at (company).

(signed) Your name

Finally, remember that it is only business and your real life is spent out of the office.

edit: A few commenters have mentioned the resignation letter. The reason why you only put in the bare essential information is because that letter is a business record and will be retained. Anything and everything you put in there will be used against you if you ever need to take action after your employment period ends.

For example, if your last check never comes or is incorrect and the company refuses to fix it, what will you do? Hire a lawyer, of course! Guess what the company is going to present as part of its defense? Why, your resignation letter, the notes/forms from your exit interview, your evaluations, etc!

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    Is that all for the resign. letter? cool! I like brevity ;) – Adel May 16 '15 at 0:19
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    Great answer! I agree 100% - if they know you're looking, they will look as well. And the job surveys are indeed garbage. Generic job titles that companies LOVE to cling onto when offering below average salaries. – Mark C. May 16 '15 at 19:56
  • Well, I you're friends with your boss, it might do to not be so brief and abrupt -- maybe add a sentence about how "It's been a pleasure to work with you all." or something to that effect. Maybe make it sound less sarcastic. – Nic Hartley May 16 '15 at 23:58
9

These seem like they're your biggest points in my mind.

  • According to every salary statistic I've been able to find my salary is in the lower 25%
  • I really like my job
  • I like my boss and I like my co-workers

Should I tell my boss as a way to gain leverage in salary negotiations?

What are you hoping to accomplish with this? It sounds like you're putting them in an awkward position. Your boss will most likely read it as "If you don't give me a substantial raise I am going to find a new job."

If you're willing to approach your boss to try and get a better salary you should be honest with them, but also justify your case. Perhaps put together your portfolio and prove that you're worth more than you're being paid. I have a gut feeling nothing good will come of saying you're on the job hunt due to salary. On the contrary, be very clear that you enjoy your job and want to get more out of it. Hopefully they will provide you with some insight on maybe why your salary is where it is. If you put in a good case for yourself it might not get you a raise right now, but it will let your boss know that you care and build loyalty to them.

Put some time down on their calendar for a lunch or a 30 minute meeting, and if you're still feeling hopeless after the meeting that is when you should start looking for a new job. Below I have included some information to help with this.

Know Your Options

Personally I would look for a new job if I could meet the following conditions:

  1. I can find a job that makes me more valuable.
  2. The social atmosphere feels a lot like my current job.
  3. The entire package (benefits and salary) are better than currently.

I can find a job that makes me more valuable.

At this job you can learn more technologies, maybe it means you now manage a team as a leader, maybe this role enables you to work in a different sub-field of your current career that you enjoy. This is what will drive your career long term.

On the other hand you don't want to end up at a bank writing Cobol applications for a ton of money, to find out three years from then they're going to upgrade to a new technology and you're very experienced with a dying technology.

The social atmosphere feels a lot like my current job.

It sounds like you have a great current job! I bet Sunday nights aren't a drag, you're not upset on Monday. You enjoy talking to coworkers and doing projects with them. I have been in this sweet spot before, and much like yourself, took another job in hopes of a higher pay. I made a big mistake. I make more money, but some weeks are just plain tough. A good team can enable to go much further at the end of the day.

This aspect doesn't make a difference in your salary, but a job that has the right social environment is invaluable.

The entire package (benefits and salary) are better than currently.

Sure, a high base salary is nice at the end of the day, but what about the other things? What if you earn 10% more at another job, but have to pay a premium for your health insurance and the company doesn't match contributions to a retirement fund. You mention that your salary is low, but how do the benefits compare to these other offers you have received? Can you quantify them? Is it still very low with these factored in?

  • This seems like a good answer, did you accidentally delete it? – enderland May 15 '15 at 15:21
  • I deleted it because it answers part of the question about the job hunt, but doesn't answer the question about his boss. @enderland – Daniel Siebert May 15 '15 at 15:24
7

Telling him in advance gives him a chance to do something about it.

You already established the fact the he does not change anything despite knowing. Maybe because he cannot. Maybe because he does not want to. Either way, this won't change. So there really is nothing to gain.

Without any point left on the Pro side, why bother. That would be taking a risk for no gain at all. Don't tell anyone and get a new job at your own speed.

5

I would not tell him. Something I learned while on the other side of this story: as a manager you should assume that one or more of your employees is looking for a new job at any given time. If you've brought a concern like this up multiple times, then he must realize that he's risking losing you without you being explicit.

Often in a situation like this, a manager's hands are tied by employee retention policies that don't make sense, and the manager is personally happy for the employee who leaves for a better situation.

  • The last paragraph is insightful! – Volker Siegel May 17 '15 at 10:55
2

each department gets a fixed increase (in percent) which my boss then divides among the employees.

This may be how they do things, but it is by choice. It's not a valid reason for denying you a salary increase. If it is, what difference does it make if you have another offer?

It may be more appropriate to have a conversation about your salary during an evaluation meeting. That's up to you to decide. Get some positive feedback from your boss about your performance. Based on the quality of the feedback, ask for a raise. This will be good practice for your next job interview. If your boss gives you any indication that it is impossible to increase your salary substantially, you need to let him know that it appears you have no choice but to look for another job. Maybe then, he'll come up with a better solution if he wants to keep you bad enough.

2

Even though they don't sound like the type of place that fires people who look for other jobs, I still don't see any outcome from doing so that is going to be beneficial to you. Like others have said, they would have already increased your pay if they were ever going to. Telling them you are seriously considering leaving simply gives them more time to plan ahead to hire your next underpaid replacement, or maybe start training a less discontented coworker to transition to your position for a much smaller increase than you're asking for.

The best way to increase your pay is to find a new job with a higher starting salary.

0

You're negotiating, and the most powerful negotiation tactic there is, is to walk away. Whoever is prepared to walk has the most power. You aren't prepared to walk if you don't find another job first.

0

My personal opinion is that you shouldn't tell him in advance, because you've basically already told him multiple times and nothing came of it. Telling him you're looking for another job pretty much seals your fate unless they really consider you invaluable to the company.

Now, what you should do is go out and find another job you'd be happy with. Get the offer, then take it into your boss and lay everything out on the table. "I've got an opportunity with another company, but I'd really like to stay here in my current role. Unfortunately, I can't afford to do that at my current salary. If you can meet their offer then I'm happy to turn them down right now, otherwise I have to walk."

You probably don't need to show proof of your other offer, but it would probably help your negotiation as it proves you aren't bluffing. Also have a target figure in mind that you're willing to accept (which is presumably less than your other offer, but could be more) and don't waver. They may not meet all you're requesting, but if they meet you 95% of the way there it might be worth staying. All depends on the circumstances.

That said, if you really want to drastically increase your salary, you're better off switching jobs. You'll be coming in at a higher base, raises won't be as contentious, etc. Money isn't everything though, and it sounds like you prefer the "devil you know" over the one you don't... so long as you can afford it.

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