I have recently unintentionally learnt that a colleague of mine who is just few months out of university is making more money than I do with my 5 years of experience, while both of us hold Software Engineer titles. At the time when I was hired, the offer seemed extremely competitive and I felt very happy with everything the company had to offer (I have provided the expected salary). One thing I did not realize was that I have highly underestimated the potential of the company in terms of the pay. The information on the Glassdoor turned out to have some highly misleading and outdated salary statistics. Regardless of the fact that I am in a very friendly relationship with this colleague, my knowledge of the situation affects my mood and overall morale. How should I personally deal with this?
The fact of the matter is that salaries are rarely "fair" and based solely on individual merit such as education, experience, or skill level.
Other factors are:
- how well you bargain;
- whether there happened to be other good candidates;
- how badly the position needed to be filled at the time of hiring;
- financial status of the company at the time of hiring;
- how well you got along with the HR person;
- whether the HR person was in a good mood that day;
- planetary alignments;
You'll note that many of these factors are not in your control. Such is life :-/ Personally, I wouldn't be too bothered by it or take it personal as long as my current salary would be reasonable. Your friend got lucky at this job; you might get lucky at your next job.
At any rate, the way forward is to request a general review with your manager, where your status in the company can be discussed. Salary negotiations are often a part of this, no one will think it's strange if you bring it up.
There is no "one good way" to negotiate your salary; but in general point out the value you bring, especially if you bring skills or insights no one else does. It might be a good idea to think of some concrete examples of excellent things you've done beforehand: solves a particularly difficult problem, worked overtime, helped another department out, etc. You can browse the salary tag for some other hints.
I wouldn't bring up salaries of other people. "But he earns €10k more than I do!" will not be a very convincing argument. It doesn't really matter what other people earn; it matters what you earn.
I would recommend finding another job and then re-negotiating the salary with them when you say you found another job that pays more. If you goal is to progress and increase in wages then you need to hold the cards.
Optionally you could just ask them for a wage increase without mentioning the other persons salary, but from my experience that is harder to do than forcing them to prove your worth to them by having another situation available to you and they need to compete for your talents and abilities.
If you mention the other persons salary you could jeopardize that persons job and career as well, since usually companies prohibit salary discussions among employees.
Your salary is a reflection of how competitive the company thinks your are. It might not have anything to do with your 5-years experience.
- What was your university grades when you joined? The new programmer might have done better than you.
- How good is your problem solving skills? The new programmer might write a program faster and better than you.
- Why do you think your 5-year experience matters? Why do you think your company cares? Are just just like writing for-loops everyday for the last 5-years?
- Where is your competitive advantage? 5-years experience? What new skills can you bring to the company? Nothing. Your new programmer has new skills, you don't.
- Can you offer anything that the company doesn't already have? You can't. The new programmer could.
From the company perspective, you have nothing exciting to offer thus your salary should be lower than a new potential intelligent junior developer.
You shouldn't be sad but take it as an opportunity. Now, you know there is someone in your team understand software development better than you. You can learn from the new developer and absorb the new skills into your your works.
This situation you described is commonplace. A few points:
I ... learnt that a colleague of mine who is just few months out of university is making more money than I do
This is very common. Companies very rigorously revise salaries that are given out to college freshers for they have to compete neck-to-neck with other similar paying companies for potential employees who are smart, do not hold strong preferences for job families and mostly care about high salaries only.
One thing I did not realize was that I have highly underestimated the potential of the company in terms of the pay. The information on the Glassdoor turned out to have some highly misleading.
First off, almost any company can make a few exceptional offers that aren't the norm. May be your colleague is one such. Another factor could be that over the past few years your company has focused more on higher renumeration to new employees. Who is to tell that other new hires (freshers or experienced) aren't earning way more than you too.
Regardless of the fact that I am in a very friendly relationship with this colleague, my knowledge of the situation affects my mood and overall morale.
This is the tricky bit. This is why organizations try to maintain strict secrecy of compensation details. But again, what has happened is common. Know that salary is not the best measure for talent. Your work will speak for itself. More so if you work hand-in-hand with your colleague and may be even mentor him in the process to ultimately deliver fantastic results, that will go a longer way. The other alternative is not very good.
How should I personally deal with this?
I would urge you to not go ahead and figure out ways to trying to deal with it right away. You have in your possession a knowledge that can come in handy at a later stage. The stage being promotion (vertical growth).
Given that you know
a. company can pay higher,
b. you are not among the ones who get the most,
c. you have performed as well as others until the time of your promotion; you shouldn't have any apprehensions of asking a huge and well-deserved hike.
Good companies try their best to smooth out the differences overtime. And if you stay long enough you should be able to see it too.
Hope that answers your questions.