Pay Discrepancies in Corporate America

[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]

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]

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]

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]

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]

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

 

[copyright1997reloaded]

Hi ER Community!

However, I am starting to become really down based on the pay discrepancies I am learning about in my company. Some background: I have 5 years of progressive Finance and Accounting experience. I currently make $73k base, and just found out that our Admin makes $60k base. Additionally, a coworker who is two "titles" higher than me, makes $130k base. I have basically been told that I will be promoted this year by my bosses, which is great. However, I am starting to feel that, since I started at such a low base, I will never catch up to my coworker making the $130k that is only two "titles" higher than me. When I get promoted, at which point I will be one "title" lower than her, in theory, I would expect to be bumped up to about $100k base. That would be around a 40% raise, and you and I know that both won't happen.

As others have mentioned, you should always know your worth in the job market place. Otherwise, you are flying blind and subject to your own emotions.

A wise man once told his practice as a mid level manager in a mega corp was to always try to have those working for him with higher pay than himself whenever possible.

 

[ERD50]

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.

I don't think this 'dogma' is any different for a machine than a human. And I would find it hard to believe it is actually a common viewpoint.

Employees (and machines) are most certainly value creators (or maybe value protectors, depending on the job), or they would not be employed (or purchased).

Yes, the salary, benefits and all other elements of total compensation for employees is a cost, and a reduction in value. The same for machines, just a different set of costs.

For a profitable company, all costs are to be managed and minimized because costs reduce profits. Machines have costs too. A machine will only replace a human when the total cost of the machine is lower (and that can include some hard to quantify costs, like a machine won't go to HR and file a grievance against their sup).

-ERD50

 

[Lakewood90712]

You're certainly not going to see any 40% raise with a promotion in most companies..

I know my old MegaCorp had a cap of 10% to 12% max. when someone went to one pay grade higher. No more.

I would agree with this view. I was at a megacorp employer for 19 years and a megacity civil serv. job for 14 years. At megacorp, it would take at least 5 years to get to the mid/upper pay levels after a promotion.

Totally different at megacity. Promotions were treated like a new employee , 2 years max time to top scale , and previous pay in the city was irrevelent.

As others have suggested, talk with a headhunter.

Are your skills something transferrable to a civil sevice job ?

 

[brett]

This is not difficult.

Understand the compensation in your field. If you feel that you are underpaid, underappreciated, or overworked then get your resume up to date and start looking around AND be prepared to make the change.

There is no use moaning and complaining about your situation. Decide to do something about it or make peace with yourself.

 

[BeachOrCity]

My own experience with 25 plus years at mega Corp was that at times I suffered from new employees from outside being overpaid relative to me in terms of comp. But over time that was muted and in the end my own comp was actually better than had I left. Plus I got the benefit of having a great network in mega Corp to position myself well for advancement.
One point in here that does ring true. You have to have your facts on value and tell them you expect to be paid what you are worth.

 

[ecowtent]

As easy as it sounds to manage salaries, it isn’t easy and there are more factors involved than position and years of service. I am the Controller of a small company and I do HR. You need to be happy with your salary for your role. Are you going above and beyond? Do you have your CPA? Even our junior staff are encouraged for bench strength and rewarded for increased education. I have my CPA and went back for my MBA to better myself.


I see everyone’s salary. It doesn’t matter what someone else earns. Your salary is about what you bring to the table. Do not bring in the discussion of what you need to survive or what someone else earns. Learn about your market and fight for the salary deserved for all of your accomplishments. Also explain you want to know the goals and challenges to move to the next level in XX number of years and XX salary.

 

[brett]

^+1

Great advice.

Leave emotion at the door. The past has gone. Move forward with your future. It is entirely up to you.

 

[convergent]

I worked for a mega company (IT field) for 30 years and then left and have worked for two other companies since then. I held many different jobs in the first company. I've worked in upper management and seen how salaries are handled.

My advise is to stay where you are through the promotion cycle to see what that does for you. It wouldn't hurt to also softly job hunt to see what you an find about your value in the market. Typically, (and this is from both a managers perspective and an employees perspective), if you are way below your value, you are going to much more easily get parity by going to a different company. It is difficult for a manager to give an employee a huge percentage raise at one time, because it would likely set off alarms and or exceed their annual budget increase, and most managers don't want to deal with that. When hiring someone, there is usually more latitude and a target range that is market aligned.

I had a situation years ago where we were discussing hiring someone that was to work for me, and be two levels below me. While discussing the offer being made with my boss, he shared with me the salary he wanted to offer. We talked about it and agreed on a plan. At the end of the meeting, I pulled him aside and simply said, "you realize we are offering him more than I make, right?". That's all I said. A week later during a 1:1, he told me he had reviewed my salary and I was way below where I should be. He told me he would fix it, but it would take a couple of years to get me where I needed to be. He honored his word, and I eventually caught up. Its unfortunate that it happened that way, but I had been promoted twice in a short time and even with 10% raises each time I was still about 30-40% below my peers. Once I got to parity, I also was fairly flat for the next 10 years or so at that company. In fact, my net went down over a period of years. That is when I decided to look elsewhere and I did very well with the move to a different company.

From the management side, I had employees in my department that were fresh out of college and others that had been with the company for over 10 years. The compensation was about double for the more experienced folks. The productivity in some cases was double in the reverse. One of the newer employees got to talking to his buddies and found that he could go to work for another company and get a raise of about 40%. He then shared this with a lot of his coworkers. So we had a "situation" to say the least. As a management team, we sat down and determined which of the "fresh out of college" workers we really wanted to keep. It was about 5-6 of them out of about twice that many. We came up with a very aggressive raise for each of them. None of them left, and they were much happier. We did have a couple of the ones that didn't get the raise that left, but that was OK with us. In the end it worked out. Thankfully the first guy had the relationship with management to say, "hey, I wasn't looking but this company is offering me this salary. I want to stay here, but I also have to think about my family and this is too much for me to ignore. Is there anything you can do to help me stay.".

 

[Big_Hitter]

"hey, I wasn't looking but this company is offering me this salary. I want to stay here, but I also have to think about my family and this is too much for me to ignore. Is there anything you can do to help me stay.".

The problem with saying that is the relationship between you and the employer will never change. Everyone I've ever talked out of quitting (and there were several) eventually quit, usually within a year. The ship has sailed; that's why I've always just submitted my resignation and let it be.

I never understood why a full court press is put on when someone quits or threatens to leave. The last job I quit, 5 years ago, it was a hard full court press.

 

[convergent]

"hey, I wasn't looking but this company is offering me this salary. I want to stay here, but I also have to think about my family and this is too much for me to ignore. Is there anything you can do to help me stay.".

The problem with saying that is the relationship between you and the employer will never change. Everyone I've ever talked out of quitting (and there were several) eventually quit, usually within a year. The ship has sailed; that's why I've always just submitted my resignation and let it be.

I never understood why a full court press is put on when someone quits or threatens to leave. The last job I quit, 5 years ago, it was a hard full court press.

In just depends. In this case, the guy was genuine about wanting to keep working for us. From management's perspective, we were in the middle of a $45M contract and if we lost a half dozen of our top developers, we'd have been in big trouble. By him bringing this up, we realized that we hadn't properly valued these employees and were going to lose them. Our recruiter told us that there were over 800 open positions in the area for this role we were competing with, and we had heavy security requirements that made it more difficult to hire. These folks were the future of the company and it would have literally taken a minimum of 6-9 months to replace them (recruiting, hiring, training).

But often, it is like you say and if someone is going to leave they are going to leave. When I left both jobs I've left in recent years, my mind was made up. The big difference here was in my case the reason I was leaving wasn't money. In the case of the example I gave from management's perspective, this guy was leaving solely because the money was so far off. I believe this has a correlation with the OP's situation which is why I posted it.