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Background:

I was hired 3 years ago as a developer with an average salary, last year I was promoted to Lead Developer with lots of new responsibilities but without a pay increase. I didn’t have too much choice in the matter but did go along with it as I wanted the position. It now goes me, Head of Dev, CTO.

A few months ago our company was purchased by a larger company, one that puts significant emphasis on how well it treats staff. The new company has in place salary bands for job roles. They aim to pay you in the middle of the band as they see this as market rate.

I have been campaigning for a pay rise for about 12 months with both the Head of Dev and CTO - both believe I should get it. A couple of months ago a company wide salary review came around and I was put in for a 15% pay increase (I am 30% below the middle of my band). I was awarded a 10% pay increase, neither the HoD nor the CTO knew why I was declined the higher increase.

Question:

As the Lead I am now hiring for a new developer to join my team. The role is for a less experienced developer than I, with less responsibility. The company has given me a salary to offer for the role, which is over 15% higher than my own salary. I understand people in my team can be paid higher than me, I have no qualms with this if they are specialists, or more experienced in a field they are hired for. Thats not the case here.

Is it a good idea to leverage this to have my company reconsider paying me market rate for my own role? If not, is there a better way.

Is it inappropriate to go above CTO to the CEO for an explanation as to why I was declined a larger pay increase and why he feels its appropriate to pay me so significantly below market rate?

I like my job, it gives me a lot of flexibility to learn and is an ideal location. Therefore I would prefer not to leave but feel very undervalued and taken advantage off when it comes to salary.

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    I believe the CEO would be able to get the answer yes. We have a very stupid, but maybe common scenario. Our company is owned by a larger company, which in turn is own by a larger company. The CEO at the top approves the pay increases above 10%. – Starbuck Jun 22 '17 at 12:24
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    Had same thing happen to me, two new guys cam in with a third of my experience right out of uni and got the same salary as me. Same day I contacted a recruiter and withing 2 weeks I had a new job. \ – Snowlockk Jun 22 '17 at 12:27
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    I guess it would be wrong to hire yourself for the more junior role :) – davidsheldon Jun 22 '17 at 13:56
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    @davidsheldon better yet, absorb the role, and both salaries. I did miss a trick here though, which was to get my company to create the role i know have, with a salary set which i then applied for. Ok I may have been bettered by a external candidate, but at least we would have all knew where we stood. Lessons learnt. – Starbuck Jun 22 '17 at 14:31
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    I would definitely hire myself for the new position and then quit my old position. – Barry Franklin Jun 22 '17 at 16:07
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Sooner or later, the final answer on salary is what the company will do when the employee hands in their resignation. Anything in between is a debate, but also a little bit of a bluff - you haven't quit, so no one really knows what will make you quit. But - being a smart self-interested person, you're not likely to quit until you have an opportunity worth quitting over.

So my recommendations are degrees along the way towards agitation that - at their furthest extreme are you truly threatening to leave and backing that up with a job offer.

1 - Escalate to someone with budgetary insight and, ideally, responsibility

Even if you did this before. Do it again, you have new information now.

Your immediate supervisor should be in the loop, but if he/she doesn't have any insight into the budget, ask who does, and escalate with them. In this case, that may put you back in the HoD or CTO's office, but at least now they have new ammunition to fight on your behalf.

2 - Apply for the position yourself and/or agitate for a transfer.

After all, this job is less work and less responsibility and you're obviously well-qualified. And more money! Don't just threaten, put together whatever HR paperwork you need to do to publicly apply for a job transfer.

It will raise some really weird red flags - if this is any kind of decent corporate structure, some kind of alert should go off saying "why is this guy applying for a demotion" - and someone will pop out of the woodwork asking, and you can rightfully point out how you see this as a great way to get a raise.

If you have a good relationship with your immediate supervisor, let him know of this, so he's not surprised. But don't let him stop you.

3 - Actually get a counter offer

It's true that the more senior you are, the harder it is to get a new place (most of the time). So start the search. Even if the position is not as great as your current job, but the pay is better - use it to agitate with the tact "I love you guys, I want to stay here, but I won't keep getting under paid for the privilege"

There's always the case where the company says "sorry, we can't" but then you have an exit, or you can choose to stay. At that point, you know you're beat - they don't choose paying you well and they won't - even when faced with the ultimate threat. So really do consider a job search for the job that pays you what you really want, or accept that there are non-monetary benefits that prevent you from looking.

  • I am writing the job description, is that a conflict of interest? – Starbuck Jun 22 '17 at 14:43
  • Maybe - but I say let the company sort that out. If they paid you appropriately, there would be no conflict. They started this conflict of interest by paying more for a subset of your skills (the junior position) than for the comprehensive suite of your skills (your current position). So you didn't create the game, you're just stuck in it. If I had a boss with a sense of humor, I'd write myself a referral too just to make the point (some companies may not find that funny, so that's not my official recommendation) – bethlakshmi Jun 26 '17 at 15:28
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Is it inappropriate to go above CTO to the CEO for an explanation as to why I was declined a larger pay increase and why he feels its appropriate to pay me so significantly below market rate?

I would not suggest this course of action. Skipping a link in the chain of command rarely works out in your favor.

I would recommend you do a bit of research that can be verified and present the data to your manager. There are many searchable trusted sources for salary information available online.

If that does not go well, you may want to consider applying for other lead positions and use an offer from another company as leverage. If you take this approach, be prepared to leave if your current company doesn't make any adjustments on your behalf.

This effort, finding another job and getting an offer, has worked several times for me when attempting to negotiate a higher salary. YMMV

In our field, it is common, at least in my experience to at some point be forced to job hop to keep up with industry compensation averages. Sometimes the competitive offer will result in an adjustment by your current company and other times it will not. ( experience as a Sr. Software Developer )

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    In other circumstances I would agree with your research suggestion, but the company has already performed this action for me, by setting pay bands, they are just paying me ~20% below it. – Starbuck Jun 22 '17 at 14:27
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Is it possible to leverage this to have my company reconsider paying me market rate for my own role?

No, it is not possible. Successful salary negotiations are based on your value to a company, not on the salaries of other people.

If you try to leverage the salary differential, you are unlikely to get a pay rise and are likely to look unprofessional.

Is it inappropriate to go above CTO to the CEO for an explanation as to why I was declined a larger pay increase and why he feels its appropriate to pay me so significantly below market rate?

Yes, it is inappropriate. The CEO has put the CTO in a position of responsibility to manage their department as they see fit. Going over a superior's head is usually unprofessional, unless it is in exceptional circumstances (e.g. legal breaches, contract breaches, absence of the CTO etc.)

I like my job, it gives me a lot of flexibility to learn and is an ideal location. Therefore I would prefer not to leave but feel very undervalued and taken advantage off when it comes to salary.

You have 4 options regarding your salary:

  1. Stay where you are without an increase in salary
  2. Stay where you are and negotiate your salary based on your value added to the company
  3. Leave to find a more competitive salary
  4. Gain a second source of income (e.g. offering freelance work), if this is permitted in your locale and under your contract
  • On your first point, surely by stating my higher level experience and responsibility shows an increase in value to the company than that of the new hire. Therefore warranting a higher salary. Im not suggesting saying "but he gets paid more than me" is a professional approach. On your second point. Though the CTO has been placed as you say, he is unable to provide the explanation as he doesn't know, and is not responsible for deciding the salary and agreed the 15% increase - expecting me to get it. – Starbuck Jun 22 '17 at 12:19
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    @WorkerWithoutACause if your first point were true, salaries would be pegged to performance, i.e. the value an employee provides to the company. The OP, who with years of experience and a proven track record would never be paid less than an unproven new hire with less experience. – DLS3141 Jun 22 '17 at 13:41
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    the company has payscales defined for each position, and the OP is 20% below the COMPANY's figure for where he "should" be. IE, the company has already defined the salary differentials between the positions. Why on earth should he have to do research on external pay ranges for his position or argue that he is now "worth more" when the company already has this scale in place, but are for some reason unwilling to apply that scale to him? I think this is pretty kooky. – user71765 Jun 22 '17 at 13:48
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    @JoeStrazzere I'm not, but the OP is. And it's not always necessary to be directly involved to see that a new hire's "value to the company" is often oversold. Personally, I've seen engineers hired right out of school, as green as grass, for higher starting salaries than top performers in the same department. Once the more senior employees discover this they will a) resent the new hire, b) lose morale – DLS3141 Jun 22 '17 at 13:56
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    and hopefully c) quit – user71765 Jun 22 '17 at 13:58
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Jumping chain is inappropriate.

As I see it you have one option: Talk to your direct supervisor regarding your concern. If they are not interested in perusing the issue, start looking for another job.

When you find something tell them you have just received and offer from another company with X salary and that in order to stay, they would have to offer you the same, or at least something close to that. Alternatively you could just leave, the choice is yours.

One thing I can tell you is jumping the chain of command about pay will not end well

  • The reason for suggestion of jumping chain is neither of those mentioned have any power in regard to salary. My direct supervisor and CTO clearly know my concern but are unable to do anything about it. Which I guess leads me to your alternative as the only option. I just hoped there was way I had not thought of. – Starbuck Jun 22 '17 at 12:30
  • @Starbuck Unfortunately, jumping the chain will not help. I would start looking, but if you really want to stay try to convince you supervisor to escalate this issue higher and higher until it is resolved, but don't go there yourself – SaggingRufus Jun 22 '17 at 12:32
0

Your problem is your solution.

You have 3 years plus 1 supervisory and your making 20% less than you think you should.

Apply elsewhere (be the new hire), ask for 40% more (assuming that's market rate), be prepared to only get 30%, and not be a supervisor (maybe next year).

Reason for leaving is that you were promoted and shortly after the company was bought; you have enough change and miss how it was - don't mention the big pay boost you will reap.

You gave the new owners a fair shot but the previous direction has changed. Etc.

Now you're the new hire, making the money, with the new exciting future.

When a really good reason/excuse/chance comes up to improve your position you can take or leave it - it doesn't sound like next year everything will be OK, more like you'll be at least 10-20K short and not scheduled for another big (insignificant) raise.

Decades ago I jumped ship from one of the largest computer companies in the country only to go to one of the smallest for a 20% pay increase and a 75% decrease in work load. Worked there for years and made it busy, but no increase in pay.

With all that experience and skill I left for a busy place paying way more. A year later the work went offshore and everyone had finished school (flooding the market with unemployed).

With all that money I could afford to return to school and swap careers for the next lucrative thing. And so it went.

Leapfrog skillfully when the time is right, read the writing on the wall regularly.

Many businesses are stuck in that if they really want to hire new people they must pay. They distill employees who stay for what the company pays and whom accept that's how it works.

The best percolate out and decades later the owners are left with the grounds and a dry pot - they don't put in enough to leverage (leapfrog) the company and year after year fall behind.

All the go getters may well distill elsewhere but there's brain, brawn, and bucks to level the bumps - and they only have to compete with the places that fall behind.

Loyalty and comfort, not chasing work/money, is a noble pursuit - money pays the bills.

Accumulating a big savings for retraining and a family can be a noble pursuit too.

Please leave feedback about which advice you followed and how it worked out.

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