Pay Discrepancies in Corporate America

[sengsational]

Quote:

Originally Posted by ESRwannabe My observation is that the best way to make more money is to switch employers every 3 years. Unfortunately, I have stuck with the same employer for 15+ years. So I am probably one of the poorest people on this message board. Not that I'm complaining.

If they're underpaying you at a megacorp, it's my thinking that the only way to get what your worth is to go for another job, or at minimum have an offer from another company and be willing to walk unless they match. The only time you have leverage is if there's a position to fill and you're a fit for it.

I worked in the finance department at one time, and if you knew what you were doing, with a lot of effort and squinting at microfiche, you could figure out what anyone made. Highly against the rules, of course. What I, um, was told was that there's not that much of a spread between "levels", and not that much of a spread on performance differences. Specific only for the one megacorp, but I imagine it's similar elsewhere. I just remember the "rock star" workers, a level above me and top rated were probably making less per hour than I was because I left work at quitting time.

Megacorps know that if you talk about what you make, then that will tend to push-up rates. They try to make it about privacy, but that's BS. They just don't want the discussion to cause more people to feel short changed, and have to pay them on par to keep them happy.

[younginvestor2013]

Thanks for all of the insight everybody. I am talking to a headhunter tomorrow just to get a feel for the job market in my city and want to also pick her brain about compensation and if she thinks I'm fairly paid.



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[Totoro]

Yeah, wake up call: figure out what you're worth first before making any move.

To give a counterweight for mega-corp: I worked at a premium consulting firm where promotions do entail a 40% raise. Promotions happened every two years roughly (Yes: the up or out thingy). Every one on the same level was on the same base salary, so total transparency there.

Base salary level went roughly like this:
40 => 60 => 80 => 110 => 130

Bonus ranges went up alot more, so in practice it could be more than 50%.

I don't see the issue with asking for a 40% raise if that's what your market value is. Just make sure that that's the real reason, not sour grapes ...

[ESRwannabe]

Quote:

Originally Posted by younginvestor2013 Thanks for all of the insight everybody. I am talking to a headhunter tomorrow just to get a feel for the job market in my city and want to also pick her brain about compensation and if she thinks I'm fairly paid. Sent from my iPhone using Early Retirement Forum

Good move, and I'm completely serious when I say that my observation is if you want to maximize your money as an employee you should plan on switching employers every 3 years. Don't stay more than 5 for sure.

When you find your next job to hop to I would not even bother considering a counter offer from your current employer. My observation is that is too risky. Some places just want you to stick around long enough for them to find your replacement and then can you.

The other *huge* benefit of leaving every three years is that you don't stick around long enough for things to blow up. When your an idiot like me that sticks around 15+ years, you have to actually live with choices made. If I do a crap job I just end up hurting myself. The professional job hopper just needs to get the timing down so they can bail out on time.

Good luck!

[Big_Hitter]

Quote:

Originally Posted by ESRwannabe Good move, and I'm completely serious when I say that my observation is if you want to maximize your money as an employee you should plan on switching employers every 3 years. Don't stay more than 5 for sure.

that may be true until you flatline

[younginvestor2013]

I guess I don't really see the long term value or stability in constantly job hopping, though. In my opinion, it takes a good 1 to 2 years to really become fully engrained in a job, get to know your coworkers, etc.

Yes you can catch on way faster than that, but I feel like things don't get "cozy" until after you've really done things multiple times.

Plus as I've mentioned, other than this pay issue, I am very satisfied with my current "job set up". So I would prefer not to leave.

Lastly, it will be a tough argument to say that the "market pay" is $XYZ for my role because our industry is very small and niche. In my own head, because I know what my coworkers make, that to me, is the market and what my employer is willing to pay. But I can't tell my employer that. So I'm not sure if I should just keep it vague and say that the market is in fact $XYZ without any substantial proof (other than my coworkers pay) or if I should try and find concrete evidence. I suppose my convo with the recruiter tomorrow will give me some clarity on market pay and I could always drop a casual line to my manager like ".....based on my conversations with recruiters, the market pay for my role is such and such"?






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[Big_Hitter]

Quote:

Originally Posted by younginvestor2013 I guess I don't really see the long term value or stability in constantly job hopping, though. In my opinion, it takes a good 1 to 2 years to really become fully engrained in a job, get to know your coworkers, etc. Yes you can catch on way faster than that, but I feel like things don't get "cozy" until after you've really done things multiple times. Plus as I've mentioned, other than this pay issue, I am very satisfied with my current "job set up". So I would prefer not to leave. Lastly, it will be a tough argument to say that the "market pay" is $XYZ for my role because our industry is very small and niche. In my own head, because I know what my coworkers make, that to me, is the market and what my employer is willing to pay. But I can't tell my employer that. So I'm not sure if I should just keep it vague and say that the market is in fact $XYZ without any substantial proof (other than my coworkers pay) or if I should try and find concrete evidence. I suppose my convo with the recruiter tomorrow will give me some clarity on market pay and I could always drop a casual line to my manager like ".....based on my conversations with recruiters, the market pay for my role is such and such"?

you don't have to constantly job hop if you are in a niche field - a few times maybe - I think I've had to quit 3 times in 30 years (94 but it was a transfer), 95 (25% raise), 99 (huge office more vacay bigger clients) and then 11 (GTFO) and it sucked (well the quitting part sucked cause it's unpleasant and sometimes people take it personally).

yes the headhunter can tell you IF there is a MV to your job - I'm in a very niche field but there are published salary surveys etc that headhunters use and we get called, a LOT. Glad I took that last call though. Got the blank out of Houston....that was 5 years ago.

[Al in Ohio]

How much older or how many more years experience does the co-worker who makes $130k have compared to yourself.


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[laurence]

I suddenly found myself in charge of my department for an entire business unit, a dozen sites across the nation, many employees under me. I was given an "acting" title - for 2 years. Meanwhile I was signing off the reviews/time cards/raises for an employee out on the other side of the country with a cheaper cost of living, no direct reports and one very small site to manage, that was making 25k more than me (125k vs 150k). It happens. On the flip side, I'd love to drop back to 120k (I now make 130k plus incentive comp) and just manage my small IT security team of four people again. Fortunately I had my sites spread over more managers and now only have to manage San Diego and Hawaii (of course I have to visit Hawaii annually to ensure smooth operations) but my footprint is still ten times larger than that guy making more than me who manages to have a side business building outdoor fireplaces...I wonder what he charges his time to...?

But he's a miner's canary for me. My management views me as a bargain for what they get, and I stay under the radar. What's enough? If the salary will allow you to reach your target ER date, stop climbing, I say!

[target2019]

Most of us have but one card to play. That is, find a better salary elsewhere. Staying 3-5 years at a job sounds about right.

[sengsational]

Quote:

Originally Posted by laurence My management views me as a bargain for what they get, and I stay under the radar.

Good point that I don't recall seeing in this thread yet. I was pulled into a company to solve a crisis one time. I didn't really want the job, so kept walking away. They finally sweetened the offer to the point I couldn't ignore it. But not a day went by (after the crisis was resolved) that I didn't wonder if I was next on the chopping block. Sort of disconcerting. If your current situation is comfortable and you're not far away from what you think is fair compensation, nothing wrong with enjoying life instead of learning to tread in some other briar patch.

[Shanky]

Often the number of employees in your span of control play a pretty big role in comp, but this career growth takes time, talent, hard work and luck.

As you go from Supervising a few dozen ,to Managing a few hundred, to Running a segment of the business with a few thousand employees, your pay can grow 10 to 20 fold. But this might be over a 10-15 year period. Also at some point, your equity and variable comp will far outstrip your base salary rate.

[NW-Bound]

Earlier posters have covered the topic very well, and I have nothing much of value to add. I just want to say that compensation never seems fair to the individuals, and everybody thinks that he should get more. At some point, if the disagreement cannot be resolved, the employee has to walk away, and works for somebody who values him more. It's about the only thing he can do.

Recently I read The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World's Most Important Company. This excellent book describes how Andy Grove, being younger than the other two founders, was treated more as an employee than a true founder, and given much lower level of stock options, etc... Andy was not happy about this and throughout his life strived to prove that he was as good and smart as his bosses. Grove ended up writing and publishing more books than Noyce and Moore. Grove often expressed resentment of Noyce who was known as a Silicon Valley de facto high-tech leader, and not of Moore who was more laid-back and reserved. So, there's some jealousy going on.

A person needs ambition to drive him to success, but it can also prevent him from achieving happiness.

Enough of a detour. I hope that the OP will find a happy resolution.

[Cobra9777]

Quote:

Originally Posted by Shanky Often the number of employees in your span of control play a pretty big role in comp, but this career growth takes time, talent, hard work and luck. As you go from Supervising a few dozen ,to Managing a few hundred, to Running a segment of the business with a few thousand employees, your pay can grow 10 to 20 fold. But this might be over a 10-15 year period. Also at some point, your equity and variable comp will far outstrip your base salary rate.

I agree, but I don't think it takes managing a few hundred or a few thousand. I managed about 25-30 on average last 10 years before ER, and bonus+equity was about 60% of my total comp.

I guess I take exception to the job hopping sentiment here. Seems to me that real, differentiated compensation comes in the form of bonus and stock. Chasing base salary increases by job hopping every 3 years is the perfect way to be excluded from the pool of employees who get substantial bonuses and stock grants. And it's certainly not a requirement that you be a manager.

The key is building your value, which takes time, patience, and persistence. It has to be obvious to everyone that you are a consistent contributor to the company's success. Once you're there, they'll go to extraordinary lengths to make sure you don't go to a competitor. That's been my observation anyway, both as an employee and an employer.

[FreeBear]

Quote:

Originally Posted by bclover I also agree with "About Steve". we had many "old timers" who were with the company during the very flush years before 9/11. they were recipients of 20 and 30% raises along with serious bonus much in part to very good years. someone who has been with my company say only 7 years has only seen raises of 4,5 maybe 6%

Wow! So 4-7% is considered just so-so?? I guess I was doing it all wrong. Folks seemed to get 0-3% raises most years, even for better performers. The best I ever got was about a 9% promotion plus and 3% COL raise... So, without promotions, inflation would have eaten me alive. To be fair though, a great year could bring a 10%-20% bonus, but we didn't have very many great years with most of my career after 9/11...

Still, the pay was decent enough to FIRE in 2015

[Aerides]

In my MC, yes if you started "entry" and worked your way up to the middle, you were going to always get paid less than the person who came in externally to middle. Because that person had a proven market value of the salary.

Similarly, those who stayed in place for years eventually made more than their managers, especially top performers. Between Bonus+Raise+Tenure, it was not uncommon for me to have an employee reporting to me that made slightly more than I did. But MC also had a program in "flush" years to review under-comped folks outside the normal annual raise cycle, and do extra bumps to level things out a bit. I was in a larger MC, so I job hopped every 3-4 years internally, often laterally, but received extra bumps with each move which added up after a few of these.

What OP describes happens everywhere. While you may know someone else's salary, you don't know their performance, tenure, price when they came in, etc. Chances are if you do find somewhere else where you are higher paid, then someone working up the totem pole and the new place will complain about you eventually too.

[dallas27]

Current economic theory, i.e. MBA dogma, teaches that employees are value competitors of the firm, not value creators. Their costs are to be managed and minimized because employees very existence reduces profits, until we can replace them with machines.


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[aggie76]

reading this make me sooooooooo damn glad that I am no longer part of the insanity.

[Sojourner]

While I agree with the suggestion to talk to some headhunters around town to see what your true market value is, I also think a key to maximizing your salary is to become invaluable to your current employer. Unless you are switching jobs every 3-5 years, this is the only really effective way to maximize your salary. You've got to be in a position where, when push comes to shove and you are negotiating for a higher salary and/or bonus, you know deep down that your employer would be very reluctant to see you go due to your unique (or very hard to replace) value to the company. If the employer thinks your being unhappy and maybe walking will lead to less money in his pocket, you will get the compensation you ask for. This has been my experience. It's not enough to just be "good at what you do" or an "excellent performer". There are other people out there who could be hired that would perform similarly well. The key is to have skills or abilities that can't easily be hired in or recreated.

[FreeBear]

Quote:

Originally Posted by aggie76 reading this make me sooooooooo damn glad that I am no longer part of the insanity.

++1

Yep, what a pain. This stuff and all the BS related to absolutely nothing had made me so thankful to be Free