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.