Know your worth in the job market
Asking for a raise
TESS VIGELAND: This is Marketplace Money from American Public Media. I'm Tess Vigeland.
Would you ever buy a car without comparing prices?
You know, going on the Internet or at least looking through the paper? Of course not.
Then why would you -- as so many employees do -- walk into a salary or raise negotiation with no sense of your value or the market rate for your job?
Talking about salaries is one of the last taboos around, but the Internet makes it a little easier by affording you some anonymity. As Marketplace's Alisa Roth tells us, there are lots of reasons to use the web for your research -- but also some reasons not to.
ALISA ROTH: A couple of years ago, Douglas Karr was getting ready for his annual job review. He did the usual stuff: collect his accomplishments of the past year, create goals for the future, and he did some digging. He brought along a salary survey from the Internet.
DOUGLAS KARR: It was great walking into my annual review and having a little bit of information by my side about what my compensation should have been.
The survey showed Karr was being paid on the low-end of the scale for similar jobs. He told his employer, and:
KARR: They came back and made me a great offer.
A 10 percent raise. Which certainly covered what he paid the website for his salary survey.
These days, though, he can get some of that information for free. A bunch of new websites make it easy to collect information on salaries for an astonishing range of industries, jobs and locations.
Some give vague guidelines while others take into account everything from your education to the specifics of your job descriptions. Likewise, some are entirely free. Others charge more depending on the level of detail and personalization of the reports.
Joe Giordano is founder of Payscale.com. It's a website that takes an "I'll show you mine if you show me yours" approach. You plug in your information, including what you're paid, and get back a report showing how you match up to others.
JOE GIORDANO: A lot of ways, I think of it as a Kelley Blue Book for compensation, so you know just like a buyer and seller of a car would be foolish not to check market rate for that car before making a transaction, same is true now in the job market with pay scale.
He says the anonymity afforded by his website encourages honesty. Why lie if you're not really trying to impress anyone? He says he also gets better information than other sites because he goes directly to the source: the employees themselves.
Carol Frohlinger works with Negotiating Women Inc., a training and consulting company that tries to advance women in the workplace. She says getting the most money you can get isn't just about being to afford a nice vacation or those shoes you just can't live without. Your salary has all kinds of consequences for your future -- consequences that you might not think about.
CAROL FROHLINGER: Some of the peripheral damage or collateral damage around that includes how much you're able to contribute to your 401k, it also of course is the 3 percent on top of whatever that small number was originally. And on top of all of that, you often have a problem when you go for your next opportunity, because the question is inevitably "What were you making at your last job?"
But not everybody is a fan of the Web. Ken Cardinal is with the compensation consulting firm, Pearl Meyer and Partners. He says he doesn't trust the numbers.
KEN CARDINAL: You wouldn't use it if you were an engineer and trying to develop a new formula, you wouldn't go on the internet and say I'll use this, you would use academic textbooks or other experts. And so in similar fashion, compensation professionals have to rely on data that we can verify and understand and on the Internet that's often very very hard to do.
What is often easier is to start with a range of salaries for your own company. Ask the HR department for the salary ranges and where you fit in. Then, go on the Internet -- but as with anything you find in the big bad cyberworld, use your common sense. Be suspicious if the Web tells you that half a million is the average salary for your job in your city, but you're only earning 50,000. Cross-reference different sites as much as possible, and try to find out how they collect their information.
But remember that having more information is always in your best interest. Douglas Karr thinks it's important. He now hires new employees, and he occasionally rejects prospective employees who haven't done their salary homework -- you don't want to have to say the dog ate it.
In New York, I'm Alisa Roth for Marketplace Money.