Underpaid? 6 Ways to Play Salary Catch-Up

If you stay at one company for too long, or accept a low salary to break into a new specialty, it’s easy to find yourself in a situation where you are paid below market value.

In fact, companies frequently pay new hires more than current employees, resulting in a situation called salary inversion or pay compression.

Since many companies are unlikely to dole out big raises, and a future employer may base an offer on what you made at your last job, the only viable solution is to play salary catch-up in your current position. Here are some ways to get your compensation back up to market value (or even beyond).

Request a ‘Hot Skills’ Bonus

Many employers are willing to pay cash premiums to tech professionals for specific hot skills and certifications. These payments typically range between 5 percent and 15 percent of base salary and last for a period of one to two years.

Having the latest skills will also grab the attention of recruiters and competing firms. If you decide to test the market, you’ll be able to leverage your higher pay when negotiating a new offer.

Reinvent Your Personal Brand

Updating your brand and online profiles increases your perceived value, and proves that you’re in high demand. This psychological phenomenon is referred to as social proof.

“When your boss sees your updated profile, he will become more aware of what it would cost to replace you and worry that that a rival company may try to recruit you away,” explained Karen Huller, chief career strategist and founder of Epic Careering.

Until you update your brand and profiles, your boss may not realize that you’ve taken on tasks or responsibilities that entitle you to a higher-level position or pay grade. Using social proof to showcase your skills and contributions can make your employer more receptive to a pay or position change.

Ask for Supplemental Wages

Because worker wages are a fixed cost, many companies cap cost-of-living raises and monitor salaries closely. However, variable compensation receives less scrutiny, and there are many ways to earn extra money in addition to your base salary. Examples include performance or tenure bonuses based on cash or stock, project completion bonuses, payments for accumulated sick leave or comp time, retroactive pay increases or discretionary bonuses and salary supplements.

While incentive pay isn’t guaranteed, it can more closely align pay with market-competitive levels. And you can always leverage your total cash compensation to negotiate a better deal with another company.

Lay the Groundwork for Your Next Job

Some 42 percent of employers expect their tech employees to job-hop, so they’re building turnover into their hiring plans. If you work for one of these firms, your manager may be willing to help you prepare for the next step in your career by tapping discretionary budgets to pay for employee training and development, mentoring, tuition assistance and professional education such as bootcamps and conferences.

“If you can’t get more salary, ask your company to pay for skills training or other things that will raise your profile and your long-term earning power,” advised Caroline Ceniza-Levine, a career expert with SixFigureStart.

Request More Frequent Reviews

Sometimes the best way to deal with a salary deficit is to chip away at it, especially when your boss is constrained by the organization’s salary structure. Some 23 percent of companies say they review the salaries of underpaid but highly skilled employees more than once a year to alleviate salary inversion.

Agree on a target salary with your boss, as well as a series of raises or salary premiums over the next six to 12 months to get you there. Just be sure to confirm any oral salary agreements in writing.

Leverage Another Job Offer

Although this option can be risky, leveraging another job offer may be the most effective way to raise your salary. If you want to try a subtler approach, mention during any salary discussions how you’ve been talking to recruiters to validate your market value. Having other options may increase your perceived desirability—as well as your manager’s sense of urgency.

19 Responses to “Underpaid? 6 Ways to Play Salary Catch-Up”

  1. Heywood Jablome

    Another job offer, and then taking that job, is the only idea here that works. No employer cares about more reviews, “hot skills” or personal brand in social media, or much else…except results. And even then, extra effort/results isn’t rewarded, it just becomes expected. Getting another job offer and then taking it is the only realistic maneuver here.

    • Billy Kidd

      for the most part, except in the rarest circumstances, employees are expendible. I don’t know anyone who has gotten a raise that more than offsets, maybe, healthcare premiums and deductions, if that.

      You must be willing to change jobs if you want a raise.

    • KarenKaren Huller

      Having negotiated my own 50% salary increase, I beg to differ. These aren’t just theoretical tactics. I’ve either applied them myself with success or had clients successfully catch up on their salary using them, so they are not only realistic, they are proven. If you want to boil it down to dollars and cents, it is definitely more cost-effective for a company to retain the talent that they have then to have to hire someone else.

    • irala damodara reddy

      Agreed with John and this correct point and prevailed every where in the Job market.

      Further Loyalty will not yield any pay increase in the present business Market conditions except One man business.

  2. David Ruggles

    I agree with Heywood. In fact, the author makes the same point in paragraph 2 of the story. Asking for or expecting a raise, “for a job well done” only goes so far. The best way to raise your salary is to become a “new employee”.

  3. The company has not pledged a lifelong commitment to us as we have not committed a life of indentured servitude. If you are not happy, go elsewhere and do something your happy with.

  4. I recently read an article that said staying at a company for more than two years assures that you will be underpaid. But when you leave a job after a year or two and the next job’s interviewer asks why you stayed at your previous company for such a brief time, how do you explain that you left because you were underpaid without turning the interviewer off?

    • Jeff Frost


      The correct answer is the truth. Tell them you are changing positions to better yourself and challenge yourself in an ever changing technological environment.

      The truth of the matter is anyone interested in going places must take care of number one, you and your family. Make sure you negotiate not only salary but vacation time and moving expenses. You can lose a lot of money if you own a home in this process.

      I personally move and purchase immediately to gain as much “equity” without paying to live in someone else’s property. Then again I have a family and a couple of fur babies to take care of.

      Good luck, go in swinging.

  5. Red White and Blue

    Request a “hot-skills” bonus. Request more frequent reviews. Request this; request that. I have never worked anywhere that didn’t have policies fixed. You can request all you want, but most companies will tell you to put your request where the sun doesn’t shine. It simply isn’t an employees’ market. If you “request” too much they can replace you with someone from India, for 40% less if it’s an H-1B person, for 80% less if the person is working in India.

  6. Tech-Wienie

    My first IT job out of school was a company which hired mostly right out of school; when I worked there I was told that the average person lasted only 18 months. (This was the early 1980s.) I was amazed. But I found out why. They would periodically freeze the salaries of employees, but continue to increase the pay of new hires, so you had people who had been there 2, 3 or 4 years making LESS than the person right out of school. No wonder there was all that turnover! I don’t know why I stayed 4 years…young and dumb, I guess. The company barely exists today.

  7. Older and Wiser

    Don’t forget to balance benefits with salary. Where I work, not only is there a 401K with match, but there is also a real pension. So I might be making less because I’ve been there over 20 years, but when I retire in 2 years, I’m going to get a nice pension check along with my Social Security. Plus when you stay somewhere a long time you get more vacation…more important to me than pay at this point in my life (over 60).

  8. Older and Wiser

    You can try this stuff when you are young and mobile. When you are older and that can be as young as 55, they can’t wait to get rid of you. Age discrimination is rampant.

    • Why would employers want to get rid of a young productive 55 year old? Too much money? Too much vacation time? Not as productive as a younger worker with less experience? Not willing to put in extra hours? Higher health insurance premiums? Just looking for a pay check and on autopilot?